Kyndryl Acquires Cloud Service Provider Skytap, Plans To Sell Canadian Securities Business

Kyndryl said that it will use the net proceeds from the two deals for ‘general corporate purposes.’

IT infrastructure services powerhouse Kyndryl said Monday that it acquired a Seattle firm to expand its hybrid cloud service offerings and help move and run more workloads in Microsoft Azure and IBM Cloud.

Seattle-based Skytap’s technologies combined with New York-based Kyndryl’s expertise will help customers utilize cloud native services to accelerate the adoption of advanced analytics, AI and development, security and operations (DevSecOps), the companies said in a press release.

“Many of our customers face challenges with unique technologies that do not easily migrate to public clouds,” a Kyndryl spokesperson told CRN in an email. “With Skytap, we can offer a seamless lift and shift of current applications into a Microsoft environment, using Azure's capabilities. This technology enables our customers to migrate, modernize and operate at their own pace with minimal change, which is a significant advantage in today's fast-paced technology landscape.”

Skytap also has strong capabilities for transitioning complex workloads to support hyperscaler environments and has the technology to enable customers to move and run mission-critical systems in the public cloud with minimum change.

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“Skytap’s unique relationship with Microsoft and its exclusive ability to move workloads into Azure datacenters were beneficial,” the spokesperson said. “The Skytap team brings a wealth of knowledge and expertise that complements Kyndryl's existing services, making it an ideal addition to Kyndryl’s hybrid cloud services portfolio.”

Kyndryl also announced that it has entered into an agreement to sell its transaction processing platform for the securities brokerage industry in Canada, known as Securities Industry Services (SIS), to Broadridge Financial Solutions Inc. Kyndryl intends to provide managed services and capabilities to Broadridge related to its SIS business following the divestiture.

Terms of the deals and the number of employees coming over in the acquisition were not disclosed.

“Since becoming an independent company, we’ve focused on building our business with a strategy aligned around six practice areas and alliance partnerships that enable us to co-innovate and deliver services that help our customers transform and grow,” the spokesperson said. “SIS was not aligned with our strategy and business model.”

Revenues generated by both Skytap and SIS over the last 12 months were less than one percent of Kyndryl’s annual revenue, Kyndryl said. The transactions have no impact on Kyndryl’s fiscal year 2025 outlook, the company said.

Kyndryl said that it will use the net proceeds from the two deals for “general corporate purposes.”

Going forward, the company is looking to help customers with their hybrid cloud adoption and helping with Microsoft cloud workloads.

“Skytap helps expand Kyndryl’s service offerings, allowing us to grow our business with Microsoft and assist customers with complex workload migrations,” the spokesperson said. “Kyndryl’s partnership with Microsoft will evolve to include a more comprehensive suite of services that uses both Kyndryl's and Microsoft's capabilities.”

Skytap last year received an $18 million financing package from Vistara Growth. Other investors in Skytap include Madrona, Insight Partners, and Goldman Sachs Growth. The company has raised a total amount of $127.5 million in funding, according to Crunchbase.