IBM has confirmed its intent to acquire SoftLayer, a cloud computing infrastructure provider, for approximately $2 billion.  The acquisition looks to aid IBM in its public cloud offerings, as well as compete with other public cloud service providers like Amazon.

This acquisition would bolster IBM’s cloud computing efforts by creating a new cloud services division within its Global Services unit, where SoftLayer will continue to operate independently.  The acquisition will also help the company “beef up its ability to integrate public and private clouds for its clients, enabling significant performance and security benefits for SMBs.”

Many are questioning IBM’s intention in acquiring a cloud service provider since it already has SmartCloud.  Some are beginning to question its existing cloud offering.

According to Wikibon Chief Analyst Dave Vellante, IBM’s current offering is not considered a “true cloud” while SoftLayer is, having been built from the ground up much like Amazon’s web service, and it’s growing very nicely.  SoftLayer does a lot of dedicated hosting that’s highly automated and offers greater degree of granularity.  IBM could leverage SoftLayer’s platform to build out its own cloud service.

Another question being raised is why IBM wants to participate in the infrastructure as a service market when it is being looked at as a “race to zero”?

“There’s real opportunities to make money here.  I think IBM is all about value add what IBM’s gonna do is really take that SoftLayer platform and really build out services on top of it and accelerate the pace in which it can deliver those services.  It will bring, much in the same way that Oracle does, a lot of its own software technology to that cloud and add value to that cloud and sell that value very hard,” Vellante stated.

Gor more of Vellante’s Breaking Analysis on IBM’s acquisition of SoftLayer by watching the NewsDesk video below: