IBM and EMC show interest to buy SoftLayer for $2 billion

    Infotech Lead America: IBM and EMC are in talks with SoftLayer Technologies to buy the database web hosting company in a deal valued at $2 billion.

    Reuters reports that Dallas, Texas-based SoftLayer has hired Morgan Stanley and Credit Suisse to run the sale process.

    GPI is a majority stake holder in SoftLayer that provides internet infrastructure services including cloud computing, managed and unmanaged dedicated bare metal servers, and related services.

    Spanning 13 data centers in the United States, Asia and Europe and the company has a global footprint of network points of presence. With 100,000 servers under management, SoftLayer is the largest privately held infrastructure-as-a-service provider in the world with a portfolio of 25,000 customers from Web startups to global enterprises, according to SoftLayer.

    Recently, Duke Skarda, chief technology officer at SoftLayer. “The flexibility of SoftLayer’s platform enables these companies to take a hybrid approach to their cloud infrastructure needs. We make it possible for them to quickly deploy servers and storage across our global network of data centers and achieve the low latency communications they require to support their customers.”

    For IBM and EMC, buying SoftLayer makes sense as they are trying to enhance their Cloud offerings. There can be other players as well to show interest in buying SoftLayer. Revenue details of the privately held SoftLayer is not currently available.

    SoftLayer’s sale process was initially spurred by one of its customers, AT&T, which approached the company in recent months seeking exclusive talks. AT&T is no longer involved in the process.

    The global web hosting market is attracting several M&A deals.

    In 2011, CenturyLink bought managed hosting and colocation provider Savvis for $2.5 billion.

    In another deal, Verizon Communications spent $1.4 billion to buy IT services provider Terremark Worldwide.

    With 100,000 servers under management, SoftLayer counts VMware competitor Citrix Systems as one of its customers, making it more attractive to the current suite of buyers.

    Baburajan K
    [email protected]