Softlayer Buyout by IBM?

H

hostmything

New member
(Reuters) - International Business Machines said on Tuesday it would acquire Web hosting company SoftLayer Technologies and create a new division for clients interested in so-called cloud services, a move to better compete with larger rivals in the space.

Executives with IBM and SoftLayer declined to comment on the terms of the deal on a call with reporters.

Reuters reported in March that IBM, among others, had been in talks to buy SoftLayer in a deal that could fetch more than $2 billion.

Dallas-based SoftLayer, which leases online storage space to companies, was founded in 2005 and has become what it says is the world's largest privately held website hosting service. The company provides its 25,000 customers, including AT&T Inc and Citrix Systems Inc, with cloud infrastructure.

The company competes with Amazon.com Inc's Web services business and Rackspace Hosting Inc.

Like rivals Hewlett Packard Co and Microsoft Corp, IBM has increasingly invested in cloud services as corporate users move away from costly internal information technology infrastructure.

IBM has traditionally specialized in assisting large corporate and government users but has been trying in recent years to expand into smaller businesses.

AIMING BIG

But Erich Clementi, senior vice president of IBM Global Technology Services, said on a call with reporters that IBM is shooting squarely for the large business segment with this acquisition.

"We are the largest infrastructure provider to the enterprise world on the planet," he said "That is our focus."

Over the last few years, Web hosting companies have been considered attractive takeover candidates as technology and telecom companies look to improve the performance and cost efficiencies of their cloud computing services for businesses.

Wells Fargo analyst Gray Powell estimated that the transaction was worth 11.1 times SoftLayer's projected 2013 earnings before interest, taxes, depreciation, and amortization.

That compares with Rackspace, which is currently trading at 11 times 2013 estimated EBITDA, Powell noted.

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. An EMC spokesman said on Tuesday, "EMC was initially approached, uninterested and decided not to bid."

IBM said it expected the deal to close in the third quarter.

Shares of IBM were down about 1 percent at $206.78.

(Reporting by Jennifer Saba in New York; Editing by Lisa Von Ahn and Carol Bishopric)
Click to expand...

WOW. This was all over my Google News Feed.
 
Good luck to the future of Softlayer - Does anyone know if the current management team will remain or if they are being replaced?

Will see how this plays out :).
 
Alex - Arvixe said:
Good luck to the future of Softlayer - Does anyone know if the current management team will remain or if they are being replaced?

Will see how this plays out :).
Click to expand...

hope they are replaced with a team that understands how to act on phishing and spam reports as the current team just ignore such reports.
 
easyhostmedia said:
hope they are replaced with a team that understands how to act on phishing and spam reports as the current team just ignore such reports.
Click to expand...

I'd have thought a company as reputable and as large as Softlayer would have proper policies and procedures for such events. How many times have you had to contact them? How many times have they not provided such a great response / not responded?
 
Alex - Arvixe said:
I'd have thought a company as reputable and as large as Softlayer would have proper policies and procedures for such events.
Click to expand...

That what i would have thought, but having the policies may be fine, but if staff dont follow these policies, then whats the point of the policies

Alex - Arvixe said:
How many times have you had to contact them? How many times have they not provided such a great response / not responded?
Click to expand...

in a 2 month period 24 times where attempted hacks into our server, phishing emails and spam emails and all coming from the same softlayer IP range. got the same reply each time i reported the issue that they have noted the issue and will investigate.
after the 24th time i sent then a very strong email stating that i have all the copies of the issues and their responses and that if they dont do anything this time they will be reported to UK authorities with my expression to get their IPs and servers taken down or have them banned in the UK, this seems to do the trick as since then had no further problems from their network, but why does it take threats like this for them to take simple actions against hackers on their network
 
Definitely good news for Softlayer, it will be interesting to see how IBM incorporates Softlayer's current Cloud infrastructure into their own as well as Softlayer's Data Centers.

Good news for other hosts (big and small). It will be interesting to see if Softlayer slowly disappears as it's merged into IBM or if IBM keeps them as is but utilizes the resources. Sort of doubt IBM will keep Softlayer in their current position with hosting and focus more on their enterprise clients.

Interesting though regardless!
 
Interesting -- most likely they will move away from small / mid sized biz and focus on their corporate clients (if they follow established business practices). This should setup to be a decent opportunity for those of us focused on this market segment.
 
And the face of the hosting industry shifts once again. :) This should be interesting. Wall Street doesn't seem impressed.
 
Surprised to see IBM enter the hosting market but its just to position them better to sell their enterprise cloud solutions so it makes sense.
 
SenseiSteve said:
And the face of the hosting industry shifts once again. :) This should be interesting. Wall Street doesn't seem impressed.
Click to expand...

Every few years lately has seen quite a big shift ha! :)

Should be beneficial for a lot of the hosts out there, small and large...even more so if IBM does slowly move Softlayer's hosting business out.
 
Dedispec said:
Every few years lately has seen quite a big shift ha! :)

Should be beneficial for a lot of the hosts out there, small and large...even more so if IBM does slowly move Softlayer's hosting business out.
Click to expand...

Not really considering many hosts small to large utilize Softlayers infrastructure.
 
Alex - Arvixe said:
Not really considering many hosts small to large utilize Softlayers infrastructure.
Click to expand...

If you want to use that perspective, then of course I'll agree with you. I will correct myself and state for the hosts not utilizing any of the Softlayer enterprise infrastructure.

There will be a lot of movement regardless over the next year for clients though just like every other time there has been a big acquisition or move in companies in the industry.

Thanks for noting that :D
 
You must log in or register to reply here.

Supporters

Back
Top