IBM To Acquire Cloud-Computing Company To Strengthen Its Cloud Service Offerings

International Business Machines Corp. (NYSE:IBM) announced Tuesday that it is acquiring the world's largest privately held cloud-computing infrastructure provider, SoftLayer Technologies Inc.

IBM expects the acquisition of the of the Dallas, Texas, cloud services company -- set to close in the third quarter of 2013 -- will give it the ability to provide clients with faster and more simple cloud solutions than it currently offers with its own SmartCloud service alone. Yet IBM intends to expand SoftLayer cloud offerings to include OpenStack capabilities.

"With SoftLayer, IBM will accelerate the build-out of our public cloud infrastructure to give clients the broadest choice of cloud offerings to drive business innovation," IBM Vice President of Global Technology Services Erich Clementi said.

In the last two quarters, more than 60 new gaming companies have moved to SoftLayer citing problems with cost, latency, availability and raw performance of other cloud platforms.

IBM also said Tuesday that it is forming a new cloud services division to oversee the new integrated service. The company expects to reach $7 billion annually in cloud revenue by the end of 2015. By acquiring SoftLayer, the company will have access to SoftLayer's 21,000 customers and its global cloud infrastructure platform managed across 13 data centers in the U.S., Asia and Europe.

"Our clients are telling us they want to realize the transformative benefits of cloud today -- not just for individual applications, but across their entire enterprise," Clementi said. "SoftLayer is a perfect fit for IBM."