The news of IBM buying SoftLayer in a recently announced deal was not a big surprise as it was rumored for some time, but it does mean some big new things for IBM. IBM was among the names that included EMC that were rumored for weeks to be courting the company to the tune of some $2 Billion. it turns out that IBM’s strategy made the most sense in the end however, but it does mark a decidedly different new venture for them.

First off, SoftLayer is a significant web host provider based in Dallas with worldwide cloud service data centers. It also serves some 25,000 customers, most of which are small and medium-sized businesses – a sweet spot for cloud providers as relationships, ease of use, and support are part of a winning formula against the likes of the services provided by Amazon and others. Their most compelling offerings focus on hybrid cloud and dedicated solutions due to the performance and cost benefits that they espouse. IBM is ostensibly going to transform this into a major public cloud competitor, and by some reports will be taking on the giants in this business. Still, it’s a wide-scope proposition that will take a lot to maintain in terms of focus, messaging, support, and so on. They begin this effort with the establishment of a new distinctly-operating division called Cloud Services, that creates a global platform combining SoftLayer and IBM offerings.

OpenStack – Where are you?

Taking this news in it is obvious that the acquisition of SoftLayer quickly gives IBM the strategic and global assets and expertise to deliver a public cloud offering. Another interesting fact is that SoftLayer is not really a major OpenStack player. Their support for the standard has been present, but they are not generally considered to be a major backer. This is a pretty significant element that makes sense for IBM. It gives them a platform through which they can continue to support and build off of OpenStack without encroaching or dominating it.

If you look at the big picture it’s still very early in the cloud game – that becomes clear when you look at all the elements that have changed in the last handful of months. Everything from OpenStack to Pivotal, to vCloud – all these things are harbingers that we are in the first inning of a long, long game. The appropriate nurturing of OpenStack is something a lot of people are watching. I would expect that IBM will now continue to provide a high-quality IBM branded breed of OpenStack-based hybrid cloud computing as their major cloud offering. In doing so, they can leverage their services, continue to tell their enterprise story because the hybrid aspect fits into that well. Hybrid says security, performance, control, flexibility and cost advantages. IBM had to shift into a different gear to make this move, but it presented a business opportunity that positions them well to take advantage of enterprise cloud adoption with the abilities, offerings and experience to reach out into SMB and mid-sized business that Softlayer provides. The question is whether IBM will execute this in such a way that they can maintain this approach well. Until now these have been somewhat separate in nature.