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IBM Acquires Hybrid Cloud Services Provider Blue Box, Places Big Bet On OpenStack

The Big Blue acquisition, combined with Cisco's buyout of Piston Cloud, accelerates the consolidation in the OpenStack arena.

IBM is doubling down on its bet on OpenStack: Wednesday the company disclosed that it has acquired Blue Box, a developer of managed private-cloud services based on OpenStack technology.

The move comes the same day Cisco struck a deal to acquire OpenStack specialist Piston Cloud Computing to accelerate its ambitious Intercloud strategy.

It also continues the wave of consolidation that's hit the OpenStack arena in the past year. In September, Cisco bought Metacloud, a company that deployed and managed private clouds based on OpenStack technology. And in October, EMC acquired Cloudscaling, a startup that developed OpenStack-based private cloud technology.

[Related: The Great OpenStack Debate: A Powerful Platform That Will Revolutionize The Data Center? Or A Dud?]

IBM has been pushing hard on its open-cloud initiatives for several years now. Just last month, at the OpenStack Summit in Vancouver, British Columbia, IBM executives introduced the IBM Cloud OpenStack Services to its SoftLayer public cloud operations.

Blue Box, based in Seattle, provides businesses with a simple Private Cloud-as-a-Service platform based on OpenStack.

IBM said the addition of Blue Box to its services portfolio strengthens its OpenStack lineup with a remotely managed OpenStack offering. Using Blue Box services, customers can integrate cloud-based applications and on-premise systems into OpenStack-managed clouds, simplifying the deployment of workloads across hybrid cloud environments, IBM said.

"These are some big validations of the OpenStack technology and strategy, and for the open source community," said Lief Morin, CEO of Key Information Systems, an IT infrastructure solutions provider based in Agoura Hills, Calif., that partners with IBM and Cisco, referring to both vendors' OpenStack-related acquisitions.

Morin wasn't familiar with Blue Box, but he is familiar with Piston Cloud and in an interview he said Cisco's acquisition of that company is significant. He said it's too soon to say what opportunities IBM's Blue Box buyout might create for his company -- noting that it can take months for such acquisitions to find their way into the acquiring company's product and services portfolio.

"But this gives IBM a platform in the OpenStack market and a voice in the open source community," he said.

IBM did not disclose how much it paid to acquire the privately held company. It said it would continue to support Blue Box clients while offering them the broader IBM cloud portfolio.


"IBM is dedicated to helping our clients migrate to the cloud in an open, secure, data rich environment that meets their current and future business needs," said Jim Comfort, IBM general manager of Cloud Services, in a statement. "The acquisition of Blue Box accelerates IBM's open cloud strategy, making it easier for our clients to move to data and applications across clouds and adopt hybrid cloud environments."

"This acquisition signals the beginning of new OpenStack options delivered by IBM," said Jesse Proudman, Blue Box founder and chief technology officer, in a statement. The combination of IBM and Blue Box, he said, will "arm customers with more efficient development, delivery and lower cost solutions than they've seen thus far in the market. Together, we will deliver the technology and products businesses need to give their application developers an agile, responsive infrastructure across public and private clouds."

IBM said its cloud revenue reached $7.7 billion over the 12 months ending in March and cloud-related sales grew 60 percent in the first quarter of 2015.

PUBLISHED JUNE 3, 2015

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