Cisco and IBM are deepening their commitments to the “cloud” – especially in the open source collaborative world of OpenStack where Red Hat is a big player – with acquisitions announced Wednesday. Here’s what insiders had to say about the deals.

Financial terms of either deal – Cisco buying Piston Cloud Computing and IBM acquiring Blue Box – weren’t disclosed. But both deals reflect the continuing growth of the “cloud” business and also a continuing consolidation of providers.

Both deals followup on previous major acquisitions in the cloud: SoftLayer for IBM and Metacloud for Cisco.

As noted by financial news website SeekingAlpha, IBM could top $3 billion in cloud revenue this year and is the No. 3 cloud provide behind Amazon (the dominator) and Microsoft, according to Synergy Research.

Cisco (Nasdaq: CSCO) has made two cloud-related deals within the past month. And IBM (NYSE: IBM) is betting heavily on the cloud through the Watson supercomputer initiative as well as others.

First, the IBM deal as discussed by Jesse Proudman, the founder and CTO of Blue Box:

  • IBM Acquires Blue Box to Bring Private Cloud to the Masses

“In 2012, Blue Box began down a transformative path to couple the DNA from our prior ten years of infrastructure operations with the unique infrastructure management platform we call Box Panel. Only a small number of organizations with dedicated focus have the resources and skill sets to design, deploy and operate private cloud infrastructure, yet we believed that combining these two unique elements would allow Blue Box to make private cloud available to every organization, anywhere in the world.

“It turns out, we were right.

“Today, I’m elated to announce the acquisition of Blue Box by IBM.

“Customers who recognize the power of cloud are doing their best to quickly develop a cloud strategy–this is often a moving target. In the 2015 RightScale State of the Cloud Survey, 97% of surveyed organizations are implementing a cloud strategy. 55% of those are seeking to do so using a Hybrid cloud design. There couldn’t be a better time to be building a solution for these customers.

“Blue Box Cloud was built with a vision that consuming cloud technology should be easy. But the reality is that from an operator perspective, cloud technology is anything but. One of the most attractive aspects of public cloud for the end user is that there is no operational burden of providing the service: it just works. Contrast that with private cloud, which has seen many cloud deployments take longer than expected, stall out or be abandoned completely. With the exception of the service provider market, almost every product on the market puts the onus of cloud operations square on the shoulder of the end user. Intuitively, this feels wrong, and frankly, it doesn’t have to be this way. There is a better way.

“IBM is in the midst of a massive transformation, placing the weight of its 400,000+ exceptional employees behind four strategic imperatives: Commerce, Analytics, Security and Cloud. For IBM, acquiring Blue Box is a way to turbo-charge their cloud strategy: Our technology and business model will become a formational kernel for the IBM Cloud organization to rally around for private cloud. Add SoftLayer’s global footprint and IBM’s OpenStack upstream capabilities, and I can’t think of an organization better suited to tackle this challenge.

“We’ve built a world-class product with a world-class team. We’re now matching big dreams with comparable resources. I couldn’t be more bullish for what’s to come…

“I want to give a big thank you to Eric Mandl and Vikram Rao from Guggenheim for helping get this deal done, and Bill McAleer from Voyager Capital and David Frankel from Founder Collective for the support over the years.”

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Next, the Cisco deal, via a blog written by Hilton Romanski, senior vice president and head of business development at Cisco:

  • Cisco Announces Intent to Acquire Piston Cloud Computing

“Cloud computing has fundamentally altered the IT landscape: dramatically boosting IT agility, while lowering costs. To realize the business advantages of cloud, organizations are shifting to a hybrid IT model—blending private cloud, public cloud, and on-premise applications.

“To help customers maintain control and compliance in this hyper-connected, hyper-distributed IT environment, Cisco and its partners are building the Intercloud—a globally connected network of clouds. Today, Cisco is taking another important step towards realizing our ambitious Intercloud vision. We are pleased to announce our intent to acquire Piston Cloud Computing, which will help accelerate the product, delivery, and operational capabilities of Cisco Intercloud Services.

“Paired with our recent acquisition of Metacloud, Piston’s distributed systems engineering and OpenStack talent will further enhance our capabilities around cloud automation, availability, and scale. The acquisition of Piston will complement our Intercloud strategy by bringing additional operational experience on the underlying infrastructure that powers Cisco OpenStack Private Cloud. Additionally, Piston’s deep knowledge of distributed systems and automated deployment will help further enhance our delivery capabilities for customers and partners.

“To bring the world of standalone clouds together, Cisco and our partners are building the Intercloud. The Intercloud is designed to deliver secure cloud services everywhere in the world. Our enterprise-class portfolio of technology and cloud services gives customers the choice to build their own private clouds or consume cloud services from a trusted Intercloud Provider. The Intercloud provides choice of services, all with compliance and control. In a nutshell: we’re delivering cloud the way our customers need it.

“Piston will join our Cloud Services team under the leadership of Faiyaz Shahpurwala, senior vice president, Cloud Infrastructure and Managed Services Organization.”


In a question posted to his blog, Romanski was asked:

“[Y]ou mention the professional services talent assets moving to Cisco, but Piston also is (was) a product company. Will their Piston CloudOS be part of the transaction?”

Romanski’s reply:

“CloudOS is part of the transaction, but it’s too early to discuss specific plans for how we will utilize the technology in the future”

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