IBM bought SoftLayer exactly one year ago, reportedly for $2 billion.

IBM bought SoftLayer exactly one year ago, reportedly for $2 billion.

IBM SoftLayer: One Year After the Acquisition

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IBM is one year into its SoftLayer acquisition, which has  transformed and helped form the backbone of its cloud offerings. IBM spent $2 billion to anchor its cloud portfolio and has racked up several clients, integrated numerous services and expanded its infrastructure footprint since. Today, on the deal’s anniversary, IBM is launching a range of new cloud services for the enterprise based on the SoftLayer infrastructure.

IBM also detailed some of the new services in the works, some that have been integrated since the acquisition and a few targets for the rest of its multi-billion-dollar investment in growth of the cloud business. The sum total of achievements for the 12 months shows good progress.

Thousands of companies have migrated to SoftLayer in the past year. “Cloud is mainstream, large organizations are using it,” said George Karidis, COO at SoftLayer. “A few years ago it was the three guys with the dream; now it’s the largest banks in the world. They want the credibility of an IBM with the very reliable combination of the SoftLayer platform.”

Nearly half of IBM’s top 100 strategic outsourcing clients — including some of the world’s largest enterprises — are already implementing cloud solutions with IBM as they transition to a hybrid cloud model.

The company’s hybrid proposition means clients can maintain on-premise control of key applications and data while moving other workloads, like systems of engagement, to the cloud for quick access to data, expansion of new services and cost reductions. It means keeping secure backend services alongside dynamic front-end services on the cloud, leveraging both security and agility.

New services on Bluemix and cloud marketplace

In addition to offering more than 300 services within the IBM cloud marketplace based on SoftLayer, IBM is releasing several new options via its Bluemix Platform-as-a-Service offering and the cloud marketplace:

  • Watson Engagement Advisor allows organizations to gain timely and actionable insights from Big Data, transforming the client experience through natural conversational interactions with the system, which get smarter the more it is used. Watson runs on IBM Power Systems, powered by its POWER8 processors,  integrated into SoftLayer’s cloud infrastructure.
  • Watson Developer Cloud on Softlayer allows access to Watson for third-party developers, entrepreneurs, academics and system integrators looking to harness Watson’s cognitive capabilities in the products and services they bring to market.
  • Aspera high-speed transfer technology is now also available on SoftLayer, enabling users to move large unstructured and structured data quickly and securely. IBM acquired Aspera to speed big data file transfers in December 2013.
  • Code name Elastic Storage is a new software-defined storage-as-a-service offering built on SoftLayer. It provides organizations with high-speed access to large volumes of data and seamless data management between their on-premises infrastructure and the cloud.
  • Jumpgate allows for interoperability between clouds by providing compatibility between the OpenStack API and a provider’s proprietary API.

On the marketplace, there are data and analytics offerings, as well as  SoftLayer services, such as multi-enterprise Relationship Management Software-as-a-Service that connects and manages shared business processes across a variety of communities, Time Series Database, which connects applications to the Internet of Things, and Analytics Warehouse, which provides an agile platform for data warehousing and analytics.

SoftLayer has expanded hourly billing for bare-metal servers, bringing the pay-as-you-go benefits of virtual server consumption to dedicated resources. Bare-metal servers provide the increased performance and privacy that many enterprises desire.

Another addition is Cloud Modular Management, a fully automated service management system to help companies to more easily govern new cloud application environments. It enables companies to pick the services they want to manage on their own or have IBM manage for them.

Billions of investment in cloud

In addition to the $2 billion SoftLayer acquisition, the company has devoted:

  • $1.2 billion investment to expand SoftLayer’s global data center footprint to 40 locations globally covering every major geography and financial center by 2015 and opening additional SoftLayer facilities in Melbourne, Toronto and Washington, D.C., in the third quarter of 2014.  London officially opened today and the company recently added a location in Hong Kong. Karidis said there’s more expansion coming in Europe, with Paris and Germany in the fall.  There’s also plans for Sydney, Brazil and China.“There’s great customer traction and they’ve invested more money than we could have,” said Karidis. “We have been expanding dramatically in the US, and adding  capacity in all our US markets. We’re adding capacity in Dallas, San Jose, Seattle and Virginia.”
  •  $1 billion to launch a Watson business unit, with Watson running on SoftLayer
  • $1 billion investment to establish a cloud PaaS (Bluemix) to help developers build cloud applications running on SoftLayer. IBM is extending its Bluemix developer platform on SoftLayer to more than 50 services and claims that the PaaS is now the largest deployment of Cloud Foundry — its open source foundation.
  •  The launch of the IBM Cloud marketplace and cloud acquisitions including Cloudant, Silverpop and Aspera.

The company says enterprises are moving core operations to IBM Cloud and SoftLayer. Some recent customers include Macy’s, Whirlpool, Daimler subsidiary moovel Gmbh and Sicoss Group.

In addition to new clients, more than 1,000 business partners have signed on to offer services on SoftLayer. They include global players, such as Avnet, Arrow Electronics and Ingram Micro, as well as cloud-based services and solution providers, such as Mirantis, Assimil8, Silverstring, Clipcard, SilverSky and Cnetric Enterprise Solutions.

“We are through all the hard parts of the integration,” said Karidis. “The team that’s here is excited and motivated. I don’t know if the integration will ever be done –we’re one of the few acquisitions that has not been gone away and has remained its own brand. We still wear SoftLayer t-shirts and business cards, the only difference is it now says ‘an IBM company’. The brand still exists, all of those pieces are still SoftLayer. We do what we have to do to build our business, and the rest of IBM works to make it work on our software. Watson is a great example.”

“In its first year, SoftLayer has proven to be a pivotal acquisition for IBM Cloud,” said Erich Clementi, senior vice president, IBM Global Technology Services. “SoftLayer has quickly become the foundation of IBM’s cloud portfolio, anchoring our infrastructure, platform and software-as-a-service offerings. “

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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