Cloud Acquisitions, Consolidation Shows No Sign Of Slowing


Cloud computing mergers and acquisitions have been happening at a rapid clip and there is no sign that cloud consolidation will halt any time soon.

Whether it's solution providers looking to add cloud competency to their portfolios, like massive global integrator Dimension Data's acquisition of cloud infrastructure player OpSource, or a communications giant like Verizon nabbing a cloud software company like CloudSwitch, the pace of cloud consolidation could make your head spin.

Cloud solution providers see the break-neck mergers and acquisitions continuing as the cloud market continues to find its feet and computing giants look to round out their rosters with more cloud products and services.

"The key players are acquiring capabilities instead of companies," said John Shaw, CEO of New York-based Nimbo, a cloud solution provider.

Shaw pointed to recent acquisitions like Dell's buyout of Boomi and IBM's pickup of Cast Iron as the two tech titans look to beef up their integration capabilities.

And while Shaw said many solution providers aren't directly affected by the swift M&A activity, unless they're partnered with the acquirer or the acquired, it does change the market landscape.

Aric Bandy, CEO of Minneapolis-based cloud solution provider Agosto, agreed.

"There's a consolidation … It's a sign of the market maturing," he said, adding that cloud computing created a breeding ground for startups that were ripe for acquisition and large providers took note. It didn't take much to get up and running in the cloud.

"But in order to continue to grow you have to have a certain breadth, you have to have depth on your bench," Bandy added.

One of the biggest trends in cloud acquisition is traditional telecoms, carriers and cable companies spreading their cloud wings and scooping up cloud players, both established and up-and-coming. Verizon got the ball rolling when it bought Terremark for $1.4 billon, several months before the CloudSwitch buy. The charge was continued by Time Warner Cable, which bought cloud infrastructure player NaviSite shortly after. Then telecom giant CenturyLink added cloud provider Savvis to its roster through acquisition.

Major vendors, too, are taking note. Dell and IBM aside, HP bought Autonomy to raise its cloud profile and add information management capabilities. Salesforce.com has been on an acquisition hot streak, beefing up its cloud platforms and offerings. And Google has been on a non-stop buying spree.

Meanwhile, there are some cloud mainstays that have held pat saying they won't fall to acquisition. Rackspace has been vocal about not being for sale, and has gone to lengths to assure partners that it's not up on the auction block.

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