The Analysts’ Take: The IBM-SoftLayer Deal

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What’s the significance of IBM’s acquisition of SoftLayer Technologies? Analysts, bloggers and pundits all weighed in on the deal, which rumored to be a $2 billion transaction and is designed to boost IBM’s cloud computing offerings. Here’s our roundup of noteworthy analysis and commentary from around the web:

Gartner – From Lydia Leong at the CloudPundit blog: “SoftLayer’s secret sauce is its automation platform, which handles virtualized and non-virtualized servers with largely equal ease. One of their value propositions has been to bring the kinds of things you expect from cloud VMs, to bare metal — paid by the hour, fully-automated provisioning, API as well as GUI, provisioning from image, and so forth. So the value proposition is often “get the performance of bare metal, in exactly the configuration you want, with the advantages and security of single-tenancy, without giving up the advantages of the cloud.” And, of course, if you want virtualization, you can do that — or SoftLayer will be happy to sell you VMs in their cloud.”

GigaOm - From Barb Darrow: “IBM’s issue: It says it has a public cloud presence in SmartCloud but most of the world doesn’t know about it. Granted, IBM can sell SmartCloud to its existing (and large) customer base of Fortune 500 companies, but if it wants to be relevant at all to newer, nimbler and more innovative customer accounts, it needed to do something. And, despite IBM’s claims to the contrary, many of those big existing enterprise customers are also either thinking about or actually putting more of their work on AWS. As a recent Morgan Stanley report put it, AWS is a very real threat to IBM and the rest of the legacy IT superstars”

The Register is skeptical: “What we see no evidence for is a plan by IBM to standardize all of its systems around SoftLayer – or vice versa – and in the cloud, that’s what matters. Unless you can use truly massive scale, we find it hard to believe you can truly deliver low-cost cloud computing infrastructure. That’s not to say that you can’t make some decent cash by offering customers a reliable hosting solution with a bit of scalability, but could you become a home for Netflix as is Amazon? Not likely.”

WSJ.com – “Before the deal, IBM had found more traction offering large companies and governments so-called private clouds, systems that the companies typically own and maintain. The acquisition could help IBM compete more aggressively for small and medium-size businesses, and offer a broader range of Amazon-like ‘public cloud’ options to large enterprises.”

ReadWrite – “IBM has its own servers that seem likely to displace those from Supermicro. The cloud controller software that SoftLayer uses now will be a little harder to parse out. The cloud controller and APIs are how administrators and developers connect to the cloud servers and get them to deliver the performance and storage that an application needs. SoftLayer’s customers connect and control their cloud instances via this very software.”

NYTimes – “Beyond the acquisitions, I.B.M. hopes to offer the company’s homegrown technology as cloud services, like its Watson artificial intelligence software, which I.B.M. announced last month was being tailored as a smart customer service assistant. ‘Watson has a lot more potential because of the cloud delivery model,’ IBM’s Ric Telford said.”

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.