IBM acquires SoftLayer Technologies

Infotech Lead India: IBM has acquired SoftLayer Technologies.

The technology giant did not disclose the size of the deal. Earlier, Reuters reported that IBM will invest $2 billion in SoftLayer.

By acquiring SoftLayer, which leases online storage space to companies, IBM will seek to strengthen its cloud business.

Founded in 2005, SoftLayer is the world’s largest privately held website hosting service. The company provides its 25,000 customers, including AT&T and Citrix Systems, with cloud infrastructure.

The company competes with Amazon.com’s web services business and Rackspace Hosting.

IBM will be in a better position to compete with HP and Microsoft by investing in cloud services as corporate users move away from costly internal information technology infrastructure.

“We are the largest infrastructure provider to the enterprise world on the planet,” said Erich Clementi, senior vice president of IBM Global Technology Services.

IBM said it expected to gain $7 billion annually in revenue from cloud services by the end of 2015. It created a new division called Cloud Services, which will combine SoftLayer and IBM’s existing offerings into a global platform.

SoftLayer is majority held by GI Partners, which purchased all of the equity in partnership with the company’s management in August 2010.

Data storage equipment maker EMC had been approached about SoftLayer as well.

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