Report: IBM and EMC eye SoftLayer

It is certainly interesting times in the cloud computing world. Not one, but two IT behemoths — IBM (s ibm) and EMC (s emc) — are reportedly considering a buyout of SoftLayer, the Dallas-based cloud services provider. Reuters, citing unnamed sources, reported that any deal could be worth $2 billion. All three of the companies issued their standard “no comment” when contacted.
softlayerIf IBM and EMC are pursuing SoftLayer, it’s interesting for a few reasons. First, IBM has spent billions building its own cloud computing business cobbling together technologies from Tivoli, WebSphere and other sources from the last decade. Last week, it just started rolling out pieces of its OpenStack-based cloud. If it’s really going all out to buy a cloud provider of Softlayer’s size, it shows that time is of the essence for big blue.
As forEMC, the storage giant owns about 80 percent of VMware (s vmw), which yesterday confirmed that it is building its own public Infrastructure-as-a-Service cloud to take on Amazon Web Services. SoftLayer competes with AWS for many workloads.
SoftLayer is a big cloud services provider with a flair for innovation and choice. It offers managed services, private and public cloud infrastructure as needed. It has lots of startup and enterprise customers including Path, SendGrid, SlideShare, Cloudant, Citrix (s ctrx), ZipServers and AT&T (s t).
If IBM and EMC are considering this deal it means they see the need to buy a fully established cloud player with real customers and not a ton of reliance on older technologies. And that is the name of the game as legacy tech players see that they need to compete better with Amazon, and increasingly Google(s goog) and Microsoft(s msft) which are all building out massive scale-out cloud infrastructure for enterprise as well as startup workloads. Enterprise customers, as we know, are the lifeblood of IBM and EMC alike.
Because of its cloud experience, its customer list, and its size, SoftLayer could make an attractive target for an older, bigger company wanting to boast of a state-of-the-art, modern cloud. To put things in context, Rackspace (s rax), based in San Antonio, Texas, is also a rumored buyout target every month or so.