It’s official: IBM to buy SoftLayer


In one of the industry’s worst-kept secrets, IBM is buying SoftLayer, a respected cloud services provider.

This news, evidence that IBM CEO Ginny Rometty is continuing IBM’s M&A legacy, has been some time in coming. In March, Reuters reported that both IBM and EMC were interested in SoftLayer. GigaOM subsequently reported that while EMC was not going for SoftLayer, IBM most probably was. When the stories surfaced, folks estimated that this would be $2 billion deal but, of course, terms were not disclosed.

Dallas-based SoftLayer will become a foundation for a new IBM Cloud Service division, along with IBM’s SmartCloud franchise. The goal is to combine the two sets of IP and services into a “global platform,” IBM said in a statement.

The division will report to Erich Clementi, SVP of IBM Global Technology Services.

SoftLayer brings some key — and very satisfied — customers into IBM. ¬†They include Kixeye, the big gaming company, Cloudant and others. Many of these customers cite the company’s support and ability to run both dedicated hardware resources and shared virtualized infrastructure.

IBM has been an ardent supporter of the OpenStack open-source cloud project but it also fields an array of older — and by one former executive’s account — extremely messy legacy code underneath all that SmartCloud labeling. SoftLayer — which also backs OpenStack — could help bring order to all of that.

Stay tuned for updates.

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