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Technology companies pay big to seed their own computing clouds

Today, technology is spurring a high-stakes scramble to buy some of the early leaders in the cloud-computing movement.
By MICHAEL LIEDTKE Modified: June 4, 2013 at 9:45 pm •  Published: June 5, 2013
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A decade ago, the mere idea of cloud computing was a difficult concept to explain, let alone sell. Today, the technology is spurring a high-stakes scramble to buy some of the early leaders in the cloud-computing movement.

The latest examples of the trend emerged Tuesday as two major technology companies announced acquisitions aimed at seeding their own clouds.

Cloud-computing pioneer Salesforce.com Inc. said it will spend about $2.5 billion to buy ExactTarget Inc., a specialist in helping other companies manage marketing campaigns and other business functions through email, social networks and a variety of digital services that can be reached on any device with an Internet connection.

The more time-tested IBM Corp. is snapping up SoftLayer Technologies Inc., a privately held company that leases extra computing horsepower to startup companies and medium-size businesses that don't have the resources or desire to build their own data centers. IBM didn't disclose the financial terms of the deal, but The Wall Street Journal pegged the cost at about $2 billion. The Journal cited an unidentified person familiar with the matter.

Billion-dollar babies

ExactTarget, based in Indianapolis, and SoftLayer, based in Dallas, are just the latest in a batch of billion-dollar babies hatched by what was once viewed as a kooky craze.

Cloud computing refers to the practice of renting software and other computing accessories over the Internet, an approach that once seemed to out of step with the long-standing policies of corporate customers and government agencies who preferred to own their machines and the applications running on them.

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