IBM to Acquire SoftLayer | Hacker News Reader

IBM to Acquire SoftLayer

www-03.ibm.com

213 pointsporker112 comments

Worth observing that for all the excitement about the recent crop of billion-dollar Silicon Valley startups, SoftLayer is based in Dallas, TX (and founded only in 2005).

I suspect, and this will be easy enough to prove one way or the other after a few years so feel free to call me on it, that we'll see a disproportionate number of successful exits come from /outside/ the valley.

My gut tells me that high-cost of living and inter-company cannibalization are going to make it difficult for companies to sustain long-term growth in the Bay Area (once the data-skewing, one-off, billion-dollar Instagram-esque deals are factored out over time).

Whereas talent will tend to stick to the one or two success stories in less saturated geographies, adding a natural doubling down effect when something is working out well. Sort of a healthy survivorship bias, in a good way.

Edit: And while two anecdotes are still hardly data, I just now noticed that Indianapolis, Indiana based ExactTarget sold today for $2.5B.

If you take a worldview of the last five minutes, this is true, but if you look at silicon valley over time, it is demonstrable that many companies in the Bay Area have built holistic and scalable enterprises. Look no further than box.com for a recent example or Intel for an old one.

SoftLayer is in Dallas because The Planet, a company dating back to the late 90s, was in Dallas and SL was founded by TP's stupidly-fired COO Lance Crosby.

SL ultimately merged with/took over TP after TP had merged with EV1 (another company dating to the late 90s), Crosby continuing as CEO.

None of these were startups in the ordinary Silicon Valley sense. They were, fundamentally, managed datacenters (something their geographical location was well-suited for). The companies were built to survive and turn a profit, not achieve a massive exit in the startup lottery.

You say that as like turning a profit is a bad thing. Are only lottery exit aspires allowed to call themselves startups?

> You say that as like turning a profit is a bad thing.

This claim has no basis in any reality I am familiar with.

Tone is difficult to convey via the written word, and there is a tendency for the mind to supply it when reading. Read the parent paragraph aloud, and play with the inflection of key words. Your initial tonal interpretation was one of many possibilities.

It's almost as if you replied to the wrong comment.

The term "startup" does have the connotation of aspiring to high levels of growth rather than steady, possibly mediocre profitability.

Curious, what is the term for a new business that looks to establish steady long-term profitability instead of the grow and cashout model?

Knowing would make googling for the profit focused version of HN much easier.

"Business".

The most common term to denote a small business that emphasizes steady profits over outsized growth is "lifestyle business."

Meredith Whitney's book is about exactly this, that U.S. economic gravity is shifting "away from the coasts" for a bit. (It just came out today, so I can't say I've read it, just that I've really been looking forward to it.) For those who aren't from the world of finance: Meredith Whitney was one of the first people on wall street to predict the mortgage crisis. The book: (not an affiliate link) http://www.amazon.com/Fate-States-Geography-American-Prosper...

Gotta call BS on her...she was one of the first BANK analysts [1] to say on CNBC that banks were effed... when it was pretty obvious to anyone not in a bank or not on cheerleading CNBC.

Then she said munis were effed... went on 60 Minutes and scared a lot of people into losing a lot of money since there have been few defaults, bonds have performed well, and taxes have gone up.

A genius is someone who makes the right call in the right media at the right time.

http://www.bloomberg.com/news/2013-06-03/meredith-whitney-of...

http://blogs.reuters.com/muniland/2013/06/04/meredith-whitne...

[1] and not even the first - Ivy Zelman made a great case and got herself fired from Credit Suisse in 2007

http://www.calculatedriskblog.com/2007/06/ivy-zelman-departs...

The Dallas startup scene is exploding right now, especially for B2B companies.

Geographic convenience to both coasts, low taxes, low living costs, high concentration of Fortune 500s and a lot of good talent itching to leave their cubicles.

http://launchdfw.com/

I love seeing more and more online blogs/publications/hubs like Launch DFW popping up for startup activity in cities across the US. A great way to connect people locally and share the happenings with those all over.

Perhaps I should have put a disclaimer in my original comment that I'm the founder of Launch DFW (though now am only slightly involved)... the long term vision is to find people passionate about their own communities and create a network of these types of blogs.

More power to ya! I hope to see the network of these types of blogs continue to grow.

I always forget about TechWildcatters even though I live 3 blocks away from them (Softlayer is 6 blocks in the other direction from my apt.)

I wonder why TWC's most recent class has so many concert related businesses (2-3 on quick inspection.) That's something I'd expect from a city like Nashville (a past home.)

Anyways, go Dallas!

TWC focuses on more of the enterprise/b2b side of things. They also recently opened up a new incubator dedicated solely to healthcare, which could turn into a HUGE market. It seems like many of the accelerators (TechStars, even YCombinator) go through phases where there will be 2-3 similar companies at a time.

How about the weather? I hear it is really hot in summer. Is it comparable to Pheonix?

I believe it was last year that we had 100 days straight of 100+ degree weather. It's a beating... Pretty much Juneish - October are unbearable. The rest of the year is lovely.

The record of days over 100F (not consecutive days, but number of days in the year) was set in 2011, and it was 71 days http://www.srh.noaa.gov/fwd/?n=danncon10

For what it's worth, I wasn't seeking out info to disprove you, rather I was trying to make the argument that no humans should exist in Phoenix so I was collecting data on that. I thought you might like to have the measured figures.

I appreciate the correction. It only felt like 100 days straight. That's what I get trying to go from memory.

It's comparable to Phoenix, if your point of reference is somewhere very mild like SF. While Dallas may have had a hot year, they only average 18 days > 99F[1], whereas Phoenix averages 109 days[2]. When you look at just the last handful of years, Phoenix has been having more than 30 days with a high above 110.

[1]: http://www.srh.noaa.gov/fwd/?n=d100info [2]: http://www.nws.noaa.gov/climate/xmacis.php?wfo=psr

All that said, yes it is typically quite dry in Phoenix. No, that does not make the heat somehow less significant. The sun scars the land and kills most life. It's a rough place to be.

Also, the tech scene there is quite meh. There's a few big data centers and some little companies hosting things in them, and there's GoDaddy, but there isn't much else. Don't even think about Phoenix over Dallas unless you really like hiking (that scene is amazing in PHX).

I'd thought I'd add a bit about the Phoenix heat as someone who lived in Phoenix until moving to Austin for university.

Saying Phoenix is a 'rough place to be' is an exaggeration. Yeah it gets pretty hot in the dead of summer, however the low humidity makes being outdoors far more tolerable (on average) compared to most places in the southern United States (such as Texas). Even then, I wouldn't think of it as a big deal other than the larger-than-average electricity bill for air conditioning.

You're definitely right about the tech scene though, it's why I came to Austin.

Quite so. Add to that list an increasing willingness of the SV venture community to invest outside the Valley - alot of that money is finding a home in the DFW area. Used to be that only companies that could exist independent of venture funding for most of their life cycle could get going here, but that's starting to change.

And tons of oil money flowing around Texas right now and into venture capital, courtesy of the fracking boom.

There is no shortage of money in Dallas, that's for sure. The problem is that currently a lot of that oil/gas & real estate money isn't really comfortable with the high risk nature of tech investments (no hard assets, etc).

The local accelerators (Tech Wildcatters, Health Wildcatters, VentureSpur) are starting to change that by getting those money guys involved, but it's been a very slow process 5 years in the making.

Normally I would agree. But with regards to Dallas, we are a large corporation (and usually energy-focused) first town. The Dallas Morning News, our largest rag here locally, isn't even covering this acquisition:

http://www.dallasnews.com/business/

Hard to unseat or even compete with SV if you can't even get local attention or coverage for a big tech/startup win.

DFW has much more than energy. Corporate HQs, semiconductor, banking, technology, etc... (Although the traffic is starting to suck worse than ever with all the folks from the coasts being lost and construction going on...)

There's a large number corporate data jobs in the area needing to be filled. (Analyst, programmer, DBA, warehouse, BIG DATA superstars, whatever...)

The Dallas Morning Snooze is not exactly a great source of any business info or news in North Texas. There's a variety of other sources that try to fill the voids.

I'm by no means arguing that the DMN is a great source for any tech or business news. I am arguing that it is the most read publication in the area and it is representative of what is deemed important by our populous. And what is deemed important by our populous is not startup and tech information. Now if you want to vote for the best burger/margarita/whogivesafuck in town, then you are in luck. There is not enough interest/understanding of the startup world in DFW to even be remotely considered a startup/technology hub or up and coming scene.

There's plenty resources, (people, money, schools, tech, etc) in DFW/Austin for startups. Mark Cuban made his beans here almost two decades ago. It's just that the majority of the vultures and technically hip decided that the Valley was place to be. The main issues with North Texas are lack of decent climate/geology, political and cultural issues.

> There's a large number corporate data jobs in the area needing to be filled. (Analyst, programmer, DBA, warehouse, BIG DATA superstars, whatever...)

Curious, how are you hearing about these jobs needing to be filled? Asking as I am also based in Dallas and looking to move my career that direction.

I'm on the mailing list for a bunch of user groups/Meetup groups that get a ton of positions posted and recuiter traffic. Lots of SQL DBA/Developer/.NET jobs and stuff of that ilk.

They are covering it now.

Fellow Dallasite here.

The problem is that DMN doesn't cover/isn't aware of the scene. I think they might do one piece on TWC once every other year as a 'human interest' story rather than 'hey, look at all this cool shit happening in our front yard!' story.

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply.

Very few places in the world can feed the labor needs of a fast growing tech company. Even the largest companies in the Bay Area have to go to New York, LA, and elsewhere to hire more people.

What that means is that you are welcome to start a company wherever you like, but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place.

If your management structure can deal with remote workers, chances might improve.

But it's normally not a good idea to grow by "hiring a lot of people fast". Startups outside of SV aren't really interested in the rocket growth. What happens usually is that companies with that hockey-stick growth generally just have a lot of layoffs down the road, e.g. Zynga (if they're not bought out for way too much money before this can occur).

The navel-gazing doesn't really occur outside of that environment, and the "need to scale" is really just a pissing contest that amateurs crow about while the real men and women get shit done by growing organically, turning a solid profit quarter after quarter and not caring what SV hipsters that don't know what the word profit means say they need to do.

Our company (FoundationDB) is based in the DC Metro area and we have tons of success hiring and retaining top tier engineering talent. The stories we hear about how hard it is to hire while we're out in SV sound really bad.

I can only speak for DC, but there is a huge labor force here of highly skilled engineers that have been working on (mostly top secret) defense / intel projects at huge government contractors. They know their jobs are there for them again if they leave and decide to come back, and often they are happy to jump ship and work in a startup if the team and product are compelling.

I imagine DC isn't alone in having a niche industry of highly skilled engineers that would be open to startups. Often they're not involved in the startup culture though so it takes some effort to find them.

Difficulty hiring is one of the best reasons to start a company anywhere else. Sure, the labor supply in SV is high, but so is the competition for those workers - including competition from extremely rich and aggressive companies like Google and Facebook who will deliberately lure away your top people with offers you can't match. There are several other places where the labor supply is 80% and the competition is 10%. Lower cost of living doesn't hurt either, and if you can handle remote workers that's even better. Living in the shadow of tech giants seems like a distinctly bad idea unless your goal is to get aquihired by one of them.

It's a bigger deal for VC backed companies that need to grow faster.

I know of a few small, profitable companies that acquire talent by luring them away from major metro areas. Also, lots of big companies are attracting talent from people who are not in an urban cluster like SF, NYC, etc. IBM is a great example of that.

If the largest bay area companies have to go outside the bay area to hire, then why start in the bay area?

There is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply.

Isn't this THE problem everyone is complaining about in the Bay Area right now?

but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place.

I can name so many other places in the world that I could hire way more developers elsewhere.

There's different types of technically capably labor supply. The one your talking about is most likely the people who are writing very complex algorithms, NLP, or the "hackers" who are writing rails apps over the weekend. The other 90% is writing Java, .NET, SAP (ABAP), etc for big co. These resources are not in short supply and can be found virtually anywhere in the world.

"Disproportionate" to what though? People might tend to overestimate the ratio of companies like this inside the valley versus outside the valley.

Texas has been a magnet for data centers for years.

Interesting. I wonder what the factors are that lead to that? Cheap energy? Absence of severe weather? Something else?

NC is now becoming know as something of a magnet for data centers[1], and the "cheap energy" part is one of the reasons that's often cited here.

[1]: http://www.datacenterknowledge.com/archives/2013/01/04/north...

Cheap and plentiful land with very good infrastructure for water and power.

That and it being kind of centrally located. We've also got a lot of talent coming out of local-ish (UTD, UT, UNT, SMU) universities to fill the labor demand.

I suppose if it's Valley vs The Field and quantity vs value, you might be right, but then you're not making that insightful of a comment. Off the top of my head, I see these getting bought or IPOing in the next few years: Twitter, Square, Eventbrite, Zendesk, Palantir, Pinterest, Stripe, AirBnB, Box, DropBox, Evernote, Practice Fusion, SurveyMonkey, Path, Twilio. And those are just the higher profile ones.

FireEye, New Relic, AppDynamics

The Valley conditions you to think startups either fail, get acquired up into one of the big players, or IPO itself. Everyone glosses over the idea of a company just being a going concern and making money. You continue to collect a salary, and your stock never sees a liquidity event.

SurveyMonkey will probably do well, but IPO? Only if they can convince some Wall Street types that they can cook the books in a Groupon type arrangement.

IBM is buying SoftLayer to try to go head up with AWS. It's not going to work.

Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment. Nothing wrong with that business model it's just not one I want to be involved with.

In other news, great job by SoftLayer to exit as pricing pressure from AWS and GoogleAppEngine was going to steadily erode their margins over time. I feel the same way about Rackspace which I think has to be in the sights for Oracle now.

So my opinion is: great job SoftLayer; questionable play by IBM.

Interested in your opinion as to why you don't think this acquisition will help gain market share on AWS.

IBM can't build a cloud of their own or they wouldn't have needed to buy SoftLayer. Since they don't have this expertise, they pay a ton of money for a company that their perceive as knowing "the cloud". This is doubly ironic because its IBM that introduced the mainframe to the world, but that's another story.

SoftLayer and everyone not named Google or Amazon can't drop their prices 40+ times every 5 years because this managed hosting is their core business. Google and Amazon are playing the ultra-thin margin long game and the result is that they hope to destroy the competition with an aggressive pricing floor.

When all you have is hosting, you can't lose money on hosting. Amazon and Google can lose money on infrastructure because its not their core business. The same cant be said about SoftLayer, and I don't think their ability to execute will increase as a result of this acquisition. If anything it's akin to Zynga's FUD middle management practices and the resulting layoffs yesterday.

I'm super bearish on IBM doing anything meaningful with SoftLayer. It's a pure revenue play from my perspective.

> Google and Amazon are playing the ultra-thin margin long game and the result is that they hope to destroy the competition with an aggressive pricing floor.

Could you explain this a bit? I found Amazon and Google overpriced and slow compared to other hosting solutions.

That bit is definitely wrong for EC2, which is notoriously slow in dropping the prices.

The web hosting business has always been cut-throat, where price cutting and overselling are the norm. And since we started to have fast enough CPUs several years ago, the price has been dropping ever faster, as the CPUs continue to work after the initial costs have been recouped. For example, nowadays there are a lot of deals for dedicated servers with Xeon L5420, a quad core 2.5Ghz processor released in Q1 2008, before EC2 went public.

The sad part about EC2 is that it doesn't shy away from overselling while keeping the same high price. The micro instance with its meager CPU allocation would be the poster child of overselling. There are some naive crowds here who believe EC2 doesn't oversell. Well, just ask Netflix: http://blog.sciencelogic.com/netflix-steals-time-in-the-clou...

IBM has had private clouds for a few years now. It's not like AWS where anyone can click and spin up an instance. It's geared towards very large companies. These companies have been reluctant to use AWS, or have specific requirements (hardware requirements, licensing issues, corporate policies). So it's incorrect to say IBM cant build a cloud. IBM's cloud isnt a public facing entity.

In 2000, Telia got a single IBM G6 mainframe hosting 1500 virtual Linux images. You'll note that's a tiny, "ancient" model.

IBM currently quotes ability to present "thousands" of virtual Linux images on a single current zSeries mainframe. These servers have virtualised storage IO, virtualised network interfaces etc. and management interfaces older than most of the developers on the hipper cloud platforms.

So to claim IBM "can't build a cloud of their own" is quite ridiculous - they can deliver single mainframes with more capabilities than most smaller cloud providers entire infrastructure for many types of workloads, and have decades of experience aggregating workloads on collections of servers like this (and single system image clustering across up to 32 zSeries mainframes - some simple math should indicate you're then in the tens of thousands of VM images managed as one single system - this with software originally introduced in 1990....), as well as decades of experience building super-computing clusters with accompanying orchestration and management. Heck, they have a separate division doing integrated service management software.

Claiming they can't build a consumer level / low end cloud solution would be more believable, and would explain the SoftLayer acquisition. But there's far more to this market than going for startups who order a handful of vm's.

> When all you have is hosting, you can't lose money on hosting.

That might have become an issue for SoftLayer in the long run if they remained independent.

But IBM is a services company. And one that is an expert in extracting money from customers by building very deep and far reaching client relationships when you can afford them. They could lose money on hosting for the next century if they like, and still see it as a cheap foot in the door for their sales team if it helps them reach new customer segments.

> Google and Amazon are playing the ultra-thin margin long game and the result is that they hope to destroy the competition with an aggressive pricing floor.

Amazon at least is priced ludicrously high compared to providers like Softlayer that can offer hybrid "dedicated + cloud" solutions. If Amazon can compete on price in that market, they've so far not demonstrated any will to do so. Amazon is priced well for the batch "bring up ten servers for two hours" market, though.

Seems like Google and Amazon may not be interested in capturing the entire cloud market? I get the feeling that they offer these services to offset the cost of their data centers/operations.

Perhaps it was facetious to say that IBM can't build clouds. A more realistic viewpoint is that they don't have significant expertise building large commodity infrastructures.

There are definitely places where IBM plays well, but commodity clouds aren't one of them, at least to my mind. If you need a high-end computing cluster that's bigger than the max Amazon instances, that would definitely be a place where IBM could play, it's just not a place I see SoftLayer playing.

You're right though; There is more than one way to skin a cat or a cloud.

There's a lot that you're misunderstanding here. A z mainframe can support a ton of VMs as long as the VMs are completely idle. A VMware cluster could do the same thing. The performance of z is so "good" that it will never be disclosed publicly.

But that has nothing to do with the cloud, because the cloud is all about automation. Mainframes are about manual provisioning and management. IBM does have experience with automated provisioning of HPC clusters, but that's also fairly different from the cloud.

> The performance of z is so "good" that it will never be disclosed publicly.

Is that true? I know nothing about mainframes, so it's an honest question

Maybe he's referring to the way the mainframes are sold with performance-limiting logic. When you want more performance, you ring IBM and they remotely activate more cores or upclock them.

IBM often writes "performance test" periods into their contracts -- you get x weeks per year to trial the higher levels of performance. This is a sop that realises that mainframes are busiest at financial reporting times, especially at the end of financial year.

No, I mean the relative performance and price/performance between z and Power or z and x86 is not public and never will be, so any performance comparisons between mainframes and normal servers have to be treated as rumor or speculation. This is not relevant if you're actually buying a mainframe because IBM will probably let you try before you buy, but it makes armchair architecture (HN's favorite sport) difficult.

In fairness to IBM, that's how enterprise sales usually works. Try finding independent production data on Oracle DB, for example.

Oracle's contracts expressly forbid talking about it unless Oracle have signed off on it.

Which is a pity, because I look after a bunch of Oracle on zLinux and would like to share...

IBM have been running what we'd recognise as private clouds or private hosting for mainframe workloads for decades.

The thing is that they don't want to cannabalise their own business. If they made zSystem mainframe linux instances accessible with a credit card (~2-5 seconds to boot, RAM-speed local networking, 5-9s hardware availability) they'd risk severely cutting into some of their most lucrative lines of business.

So they won't do that. Not right now, anyhow.

> Personally I won't buy an IBM product because I know it's just like Oracle: software entrapment.

Nobody buys IBM or Oracle products, they become 'partners' and negotiate license agreements. The entrapment is different in that your software (and hardware!) decisions now involve lawyers.

Many of the extremely large east coast customers have directives to move away from licenses as fast as they can. The recent news of IBM's protest against Amazon is very related to this acquisition.

http://washingtontechnology.com/Articles/2013/05/31/amazon-p...

> Nobody buys IBM or Oracle products, they become 'partners' and negotiate license agreements.

A former employer bought IBM licenses without partnership. Boy, IBM software is lousy. :-/

I've used SL in the past and have had business associates use them as well. I experienced nothing but problems, and regularly hear complaints from those who still use it.

This may just be a case of IBM needing to acquire companies to add revenue to their financial statements.

I had the opposite experience. I used them for years and received prompt support, even getting direct to a sysadmin over the phone. I also regularly received up to 50% off their advertised prices just by doing a little negotiating.

Of course I say all this as an AWS customer, as the value flexibility far outweighed the value of support to me. Also, the last time I checked, You had to go through a standard server ordering form process to get a cloud server up and running.

When I explored using SL a year ago, you could already use their API to provision cloud servers. It took quite a bit more time than EC2 (10 minutes?) to have the server provisioned and running (back then) though.

Here's a counterdote: I've been using them since they were The Planet and have been very happy. I've wedged my machine a few times and their support is great, too.

That's strange. They're the #1 dedicated hosting provider used by YC-funded startups. They have a reputation as the best facilities, best private network, best control panel and best support staff you can get with rented hardware. They've swapped failed hardware for me in under an hour at 3AM their time, recovered data from a corrupt disk for me at no charge, their reliability and network is generally excellent... what are the complaints you hear?

I agree, SoftLayer seems to provide great performance for us at HealthPost.

I can't believe you're even talking about the same company. This runs contrary to everything I believe.

This mostly makes me sad; softlayer was my default choice for managed hosting, and I really don't think I'd want to use IBM for this.

I would be surprised if Rackspace sold out to Oracle, considering how Rackspace has a stated goal to fight patent trolls.

Well, you'll probably be surprised, then.

Every principle has its price.

EDIT: Thought I'd add a bit more here.

An entrepreneurial religious young man had set up a niche little bakery in my area, which was supposedly filled with pensioners and people nearing retirement. This bakery catered only to conservative Hindu beliefs (fully vegetarian, no egg or meat products or derivatives used in any of the goodies, images/idols gods and goddesses all over the place).

A couple of months later, he put up a sign that said "We don't sell egg puffs here" (a savoury pastry with a boiled egg at the centre). A couple more months later, the sign was gone, a new boy was hired to serve at the counter, and egg puffs were on the menu.

RackSpace also has a longstanding stated goal to make tons of money. Oracle is a quick way to meet that goal.

> It's not going to work.

Whether or not it really is an attempt to go up against AWS, it won't work. IBM has not been successful in slim-margin markets like low-end hardware (or in this case hosting).

I currently have a dedicated server with Softlayer (at one point I had three). I actually started with Rackshack which was consumed by EV1, then merged with The Planet, then eaten by SL. I've been looking to move elsewhere, but this seals the deal. I believe IBM can't help but screw it up.

Great play by IBM - do you have any experience in Enterprise, bc this statement isn't true? Unfortunately, I do (too much Big 4 consulting in my distant past).

This is a great acquisition for IBM strategically. Many big enterprises still use IBM/Oracle products because of existing sales relationships and the fact CTO"s want to point the finger when resrouces go down. IBM will sell a ton of this. Also, with the numerous outages on AWS (unacceptable to Fortune 500) - the "selling point" well be "we're not amazon - and we can scale". IMHO

Well done a Reuters reporter back in March :)

"Exclusive: EMC, IBM eye web hosting company SoftLayer- sources", suggests a $2 billion valuation.

http://www.reuters.com/article/2013/03/15/us-softlayer-sale-...

Seems a bit on the desperate side for IBM.

Softlayer customer profile (small to medium) seems the exact opposite of IBM (very large to huge). Does IBM take the Softlayer expertise and apply it to large accounts or do they try to service a class of customers they know nothing about.

On one hand IBM is selling dev-ops services to its customers. On the other, it finds itself without sufficient in-house expertise to build out its own cloud services. It's not like this is a new need for IBM. They've been talking cloud for years yet still found themselves needing to buy this capability.

It seems IBM has found out that after years of shedding higher priced operations staff they were nothing but a paper tiger when it came to cloud offerings.

> Softlayer customer profile (small to medium) seems the exact opposite of IBM (very large to huge). Does IBM take the Softlayer expertise and apply it to large accounts or do they try to service a class of customers they know nothing about.

Doesn't that make sense though? They are trying to use the people and experience of SL to enter the market of small businesses. It didn't work for Cisco/linksys, but it does make sense to broaden your market if you think you can make it work.

At the same time, if IBM came out with a decent ad campaign for a new IBM service targeted at the little guy, a lot of people would take notice I'm sure.

Coming soon to a managed hosting environment near you:

"Call now to arrange a visit from our team of consultants to allow you to launch and configure your new server".

I've been a customer of... +5 years of Softlayer. Their service has been always good/great, even on odd hours. Congrats to them.

Get ready for crappy service once the bean counters at IBM start outsourcing everything...

Nobody else here seeing the obvious reason?

Let me take you back a few years. Remember the SCO lawsuit? Their attempts to sell licenses? Well, only one company bought one -- EV1. Who are now part of SoftLayer (via ThePlanet). Clearly IBM is just after said license. :-)

Support will now be done through RETAIN and PMRs.

Guess that means HN is now hosted by IBM. :)

Does that mean we get a HN JCL API?

Rexx for everybody!

Or, even older

$ibftc

$execute ibjob

The purchase makes sense, though I would have thought they have all the cloud parts they need in house.

Is this more of an application play?

25k customers paying into this cloud is also pretty valuable for IBM

IBM had 104 billion in revenue and 16 billion in earnings last year. I'm not sure I see 25,000 SL customers, most of whom are quite small, as substantially more than noise on IBM's books.

this acquisition buys credibility for IBM in the 'cloudosphere'.

Fun stuff. Remember that IBM got its start by renting you a mainframe with software on it. I've always been struck by how similar IaaS/PaaS type companies are similar to that model. In many ways a data center becomes just a really big mainframe that you're renting out.

Remember that IBM got its start by renting you a mainframe with software on it. I've always been struck by how similar IaaS/PaaS type companies are similar to that model. In many ways a data center becomes just a really big mainframe that you're renting out.

Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on.

We just need to get Matt Smith (of Doctor Who fame) to be our spokesperson... I can just picture him standing there, adjusting his bow-tie and saying "Mainframes are cool."

"Good, maybe it's time for me to do something useful with this personalmainframe.com domain I've been sitting on."

A cloud of Hercules emulators that instantly spin up multiple MVS systems on demand for RJE? I donno what VTAM would think about that. Or a linux on S390 SaaS provider, I guess.

I actually have some ideas for a service to develop on that domain, but it's nothing to do with real mainframes. More like "Big Data Processing As A Service" where the "mainframe" bit is just an analogy. I don't have time to work on it right now though, so the idea is just kinda sitting on the backburner ATM.

I was with ThePlanet for many years before the merger with SoftLayer. Up to that point they were very reasonably priced and offered great service. After the merge the prices nearly doubled and when re-negotiating my contract they basically gave me the impression I'm not a worthy customer due to the prices I was used to. They're after enterprise clients now and this acquisition just furthers that goal. As a small business owner I'm happy to be out and won't be returning to this company again.

I'm not sure if I should start worrying or not... We've just moved our infrastructure to SoftLayer. I'd hate it if they start to change for the worst and I'd hate it even more if I had to move to yet another data centre.

I wonder what these means for all the resellers of Softlayer's infrastructure? Will they join the IBM business partner community or will they be phased out.

This is going to be very interesting...

If SoftLayer sold, I presume they were selling at below cost and couldn't keep up. How does SoftLayer's pricing compare with AWS?

This really only strengthens AWS, a self service cloud that anyone can manage.

IBM is chasing a dying consulting model "we know best". But they dont.

You yourself with the knowledge can outscale IBM using AWS.

IBM's business is profiting from enterprise ignorance.

Your mileage may vary...or be nonexistent.

Yeah, you're wrong. IBM--if you can afford them--can beat the everliving christ out of problems you throw their way.

Consider the Cell chip, or any number of e-commerce platforms they power.

Reply on news.ycombinator.com