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IBM Bought Gravitant to Boost Its Standing in Hybrid Cloud Space

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Jan. 8 2016, Updated 5:28 p.m. ET

IBM hybrid cloud gets a boost with Gravitant acquisition

Previously in the series, we discussed IBM’s (IBM) acquisition of Clearleap, which marked the company’s entry into the video space. Prior to Clearleap, in early November 2015, IBM announced the acquisition of Gravitant. Gravitant’s flagship offering, CloudMatrix, enables enterprises to have a hybrid approach that lets them compare and analyze varied cloud services offerings currently available. It thus aids in their subsequent decision to buy, manage, or monitor those cloud services.

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Gravitant will be IBM’s SaaS offering

Martin Jetter, senior vice president of IBM’s GTS (global technology services), shared that the addition of Gravitant’s technology to the company’s portfolio should help customers struggling with management challenges that arise from operating a hybrid cloud model. Gravitant will be a part of IBM’s GTS. It will be sold as a SaaS (software-as-a-service) offering. The company didn’t release financial details of the acquisition.

According to Cisco (CSCO) Global Cloud Index, SaaS is expected to be the fastest-growing cloud service through 2018. SaaS is expected to grow at a CAGR (compounded annual growth rate) of 33% while the cloud market as a whole is expected to grow at a CAGR of 24%. Later in the series, we will discuss IBM’s position in the hybrid cloud space as well as other dominant players like Amazon (AMZN), Microsoft (MSFT), and Salesforce (CRM).

Investors who wish to gain exposure to IBM can consider investing in the iShares U.S. Technology ETF (IYW). IYW has 46.7% exposure to application software and invests ~12.5% of its holdings in IBM.

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