Solution Providers Cheer Samsung Acquisition Of Joyent As Key To Deeper Focus On Software And Services

Samsung will acquire U.S. cloud firm Joyent to bolster its software and services surrounding its mobile business, the company said Thursday.

Solution providers, for their part, say the acquisition will help the South Korean company reduce its focus on the struggling smartphone market while pushing internet-based services to customers more efficiently.

"Samsung's move to software and cloud services is an important point of progress for them as they continue to grapple with declining smartphone and tablet sales," said Jay Gordon, vice president of sales at Enterprise Mobile, a Plano, Texas-based Samsung partner. "As an industry giant, this acquisition positions them to compete with the likes of Microsoft and Amazon and tackle a billion-dollar industry."

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"Samsung has historically had high reliance on the ecosystem to deliver core elements of its device platform and this allows them to push these services to customers in a more direct way. This acquisition significantly accelerates their offering to the market and offsets the time and resources needed to build their own capability in this arena," he added.

Joyent, a San Francisco-based cloud company, competes with Amazon Web Services, Microsoft Azure and other cloud companies, selling products like its Containers-as-a-Service platform, application orchestration technology, and data center orchestration tools.

The acquisition will give Samsung access to its own cloud platform to support the company’s lineup of mobile and Internet of Things products, which demand cloud computing to run apps and software that process data.

While many companies rely on big remote data centers operated by such vendors as Amazon, Samsung will now be able control its own software and services. In addition, Samsung’s buyout of Joyent enables it to bolster its strategy with big data and computation for smart home devices.

’Samsung's acquisition of Joyent plays into their strategy to bolster their services business, and will become a strong component of their offerings in both the IoT and big data spaces,’ said Douglas Grosfield, the founder and CEO of Five Nines IT Solutions, a Kitchener, Ontario-based strategic service provider. ’It will afford Samsung more autonomy with regard to its consumption of, and reliance on, cloud services itself, in that they will not have to rely on purchasing cloud services from two of their largest competitors in this space, AWS and Azure.’

Samsung did not reveal the price of the acquisition, but said in a statement it will integrate Joyent into its mobile division, where it will serve as a standalone company under Samsung and continue providing cloud infrastructure and software services to its customers.

The purchase of Joyent follows a wave of acquisitions of independent cloud providers, including EMC's purchase of Virtustream for $1.2 billion in May and Datapipe's acquisition of multi-cloud firm GoGrid in early 2015.

Samsung, for its part, has been looking to acquire software developers as it attempts to reduce the company’s dependence on manufacturing hardware, including smartphones and memory chips. The South Korean company’s smartphone shipments fell 0.6 percent in the first quarter of 2016 from the same period a year ago.

’Samsung evaluated a wide range of potential companies in the public and private cloud infrastructure space with a focus on leading-edge scalable technology and talent. In Joyent, we saw an experienced management team with deep domain expertise and a robust cloud technology validated by some of the largest Fortune 500 customers,’ said Injong Rhee, CTO of the Mobile Communications Business at Samsung Electronics, in a statement.