IBM, EMC, And Others Are All Trying To Buy The Same $2 Billion Cloud-Computing Company

Ginny RomettyIBM CEO Ginni Rometty sees a prize in SoftLayer.

Photo: AP

A bunch of big enterprise companies are lining up to buy a cloud computing company called SoftLayer Technologies, Reuters’ Nadia Damouni reports.IBM and EMC are reportedly in talks right now to buy the company in a deal that could be worth more than $2 billion. The sales process is being handled by Morgan Stanley and Credit Suisse.

Dallas, Texas-based SoftLayer is privately held, with the majority of shares owned by GI Partners. It has reportedly turned down other suitors before, like AT&T.

SoftLayer is a cloud-computing and Web-hosting provider with about 25,000 customers, mostly small and mid-sized customers, making it the world’s largest privately held website hoster, Damouni reports.

EMC most likely wants this company to boost its brand new cloud-computing initiative. EMC owns a majority stake in VMware, a maker of cloud-computing software. Last week the two announced details for a new spinout called Pivotal, which offers a cloud-computing service that lets developers write and host applications without having to configure hardware.

The purchase of SoftLayer could provide EMC with a ready-made infrastructure to use for Pivotal.

More importantly, one of SoftLayer’s big customers is Citrix. Citrix competes with VMware, with both advancing their own architectures for cloud computing.

IBM recently became a champion of OpenStack, an open-source cloud-computing architecture that competes with both VMware’s and Citrix’s. Citrix prefers a technology called CloudStack.

SoftLayer currently uses both OpenStack and CloudStack.

So control of SoftLayer would put the buyer in an interesting position in this complicated competitive dance.

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