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IBM sets sights on Amazon after sealing $2bn SoftLayer acquisition

IBM has acquired cloud-computing infrastructure provider SoftLayer Technologies in an effort to better compete with Amazon.

Terms of the deal were not disclosed, but the Wall Street Journal reported that it is worth an estimated $2 billion (£1.3 billion), according to a person "familiar with the matter." The acquisition will allow SoftLayer to stand as its own company within IBM's Global Services unit, and serve as a go-between for other IBM cloud services.

By marrying SoftLayer's public cloud services with the IBM SmartCloud portfolio, the computer manufacturer aims to make cloud computing easier and faster.

"As businesses add public cloud capabilities to their on-premise IT systems, they need enterprise-grade reliability, security and management," Erich Clementi, senior vice president of IBM Global Technology Services, said in a statement. "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."

Dallas-based SoftLayer, founded in 2005, serves 21,000 customers from 13 data centres operating in the US, Europe, and Asia. While Amazon is a front-runner in the public cloud ecosystem, IBM tends to work with large companies and government entities. Ideally, this acquisition will tip the scales in IBM's favour.

"SoftLayer has a strong track record with born-on-the-cloud companies, and our move today with IBM will rapidly expand that footprint globally as well as allow us to go deep into the large enterprise market," Lance Crosby, SoftLayer CEO, said in a statement. "The compelling opportunity is connecting IBM's geographic reach, industry expertise and IBM's SmartCloud breadth with our innovative technology."

According to IBM's announcement, SoftLayer caught the eye in part because it offers clients a choice of where to deploy their applications — on dedicated or shared servers. With the options provided by IBM and SoftLayer, businesses can tailor their privacy, data security, and overall computer performance to meet their own needs.