While officially the price IBM is paying has not been released,details of deals like this always leak like a sieve and the New York Times, citing unofficial sources close to the deal, says the going price is US$ 2 billion.
With the current interest in cloud computing these kind of prices are not exactly unexpected. In a related statement attached to the SoftLayer news almost as an addendum, was the announcement that IBM is creating a new Cloud Services Division.
But to the SoftLayer deal first. According to IBM the deal will position Big Blue as a leader in cloud computing -- maybe even the leader, but that won’t become apparent until we see what SoftLayer adds -- and help businesses move towards public, private or hybrid cloud solutions depending on their needs.
As businesses add public cloud capabilities to their on-premise IT systems, they need enterprise-grade reliability, security and management … With SoftLayer, IBM will accelerate the build-out of our public cloud infrastructure to give clients the broadest choice of cloud offerings to drive business innovation,” said Erich Clementi, Senior Vice President, IBM Global Technology Services.
IBM’s Cloud Portfolio
The result is that IBM aims to able to offer businesses cloud computing by combining SoftLayer’s public cloud services with the enterprise grade reliability, security and openness of the IBM SmartCloud portfolio.
IBM has been building out its cloud portfolio for a number of years through the development of indigenous technology and the acquisition of other cloud companies supported by 13 massive data centers strategically located around the world.
By the end of 2015 it expects to be marking up revenues of close to US$ 7 billion from cloud business through both its cloud technologies and its 100+ SaaS offerings.
SoftLayer will be an important addition to this. In fact, according to IBM, it is so important thatonce the deal is closed, which is expected to happen sometime in Q3 this year,SoftLayer will join the IBM SmartCloud in a new division calledIBM Cloud Services division.
The new division will continue to offer SoftLayer services to its existing clients, but will also offer IBM services once it has been set up.
Without going into the specifics,IBM says that in the future it intends to expand the SoftLayer cloud offering by adding OpenStack capabilities andsays it will honor historic commitment to open standards such as Linux. More from IBM soon.
Title image courtesy of Nemanja Cosovic (Shutterstock)