IBM in mega-deal to buy cloud computing firm SoftLayer Technologies

Armonk, N.Y. -- IBM on Tuesday strengthened its position in the fast-growing market for cloud-computing services with the news that it has entered into an agreement to acquire SoftLayer Technologies Inc. The Dallas-based firm is the world's largest privately held cloud computing infrastructure provider, according to IBM.

The financial terms of the deal were not disclosed. But reports, including one by the New York Times, valued it at approximately $2 billion,

The acquisition is expected to close in the third quarter. Once the transaction is completed, SoftLayer and IBM's existing SmartCloud unit will be combined in a new Cloud Services division. The division will report to Erich Clementi, senior VP, IBM global technology services.

“As businesses add public cloud capabilities to their on-premise IT systems, they need enterprise-grade reliability, security and management. To address this opportunity, IBM has built a portfolio of high-value private public and hybrid cloud offerings, as well as software-as-a-service business solutions,” said Clementi. “With SoftLayer, IBM will accelerate the build-out of our public cloud infrastructure to give clients the broadest choice of cloud offerings to drive business innovation.”

SoftLayer serves roughly 21,000 customers with a global cloud infrastructure platform spanning 13 data centers in the U.S., Europe and Asia. Among its many cloud infrastructure services, the company allows clients to buy enterprise-class cloud services on dedicated or shared servers, offering clients a choice of where to deploy their applications.