IBM’s Blue Box Acquisition Fits with Its Open Cloud Initiatives



The OpenStack space is attracting a great deal of attention from technology players

As we have seen in the earlier part of the series, IBM (IBM) wants to expand its presence in the cloud space, especially the open cloud space. In the past, IBM stated that it plans to invest $1.2 billion to boost SoftLayer cloud services. Its Blue Box acquisition on June 3, 2015, clearly indicates this. IBM in early 2015 shared its plans to acquire more “as-a-service” companies and will focus less on buying companies that provide on-premise solutions to its portfolio.

Article continues below advertisement

IBM leads the hybrid cloud space

According to Synergy Research, the total market for cloud infrastructure services stood at $16 billion in revenues, an increase of 48% on a year-over-year basis. Amazon (AMZN) continues to lead this space with a 28% market share, followed by Microsoft (MSFT) and IBM with a 10% and 7% share, respectively. Google (GOOG) and Salesforce.com (CRM) were the other players who made it to the top five list of cloud players. The same report stated that IBM leads the hybrid cloud space. According to Gartner, 50% of all the enterprises are expected to deploy hybrid clouds by 2017.

IBM is aggressively pushing OpenStack services to SoftLayer public cloud

According to a CRN article, Synergy Research stated that IBM’s SoftLayer is the third-largest public cloud in the market. Also, the same article stated that a Forrester Research survey found that “twice as many firms use IBM as their hosted private cloud platform as use the next closest competitor.”

On May 19, 2015, at the OpenStack Summit in Vancouver, IBM announced that it is introducing “core capabilities from the OpenStack ecosystem to its SoftLayer public cloud.” This move is expected to further increase interoperability within those hybrid environments.

In June 2014, IBM’s SoftLayer introduced Direct Link, which was available only to a few customers before. Direct Link is a specialized content delivery network for creating hybrid clouds. Firms can connect their private IT infrastructure to public cloud resources by directly accessing the SoftLayer platform that streamlines the delivery over the network.

If you are bullish about IBM, you can invest in the Technology SPDR (XLK). XLK invests 3.51% of its holdings in IBM.


More From Market Realist