Only a few days after announcing that it was selling 29 of its data centers to Equinix, Verizon today announced that it is selling its cloud and managed hosting business to IBM. The acquisition is expected to close later this year.
This move pretty much puts an end to Verizon’s loftier ambitions in the cloud — an area it started pursuing in earnest back in 2011 when it acquired Terremark. With Terremark, it acquired both some of the most valuable data centers it then sold to Equinix earlier this week as well as the foundation for its private cloud businesses.
Disclosure: Verizon is the parent company of AOL, which owns TechCrunch.
As George Fischer, SVP and group president of Verizon Enterprise Solutions, notes in today’s announcement, IBM and Verizon will work together on a number of unspecified “strategic initiatives” that will involve networking and cloud services. “This agreement presents a great opportunity for Verizon Enterprise Solutions (VES) and our customers,” Fischer writes. “It is the latest development in an ongoing IT strategy aimed at allowing us to focus on helping our customers securely and reliably connect to their cloud resources and utilize cloud-enabled applications.”
It’s worth noting that Verizon also shut down its public cloud service last year. Verizon, it seems, never reached the scale to compete with the likes of Amazon, Google and Microsoft in the public cloud and it also wasn’t quite able to scale its private cloud business to the point where it was worth pursuing this strategy in the long run, especially given the strong competition there, too.
IBM’s cloud business, on the other hand, is growing quickly (unlike other parts of its business). With this move, it’s bolstering its position in the private cloud and managed hosting space for Verizon’s enterprise customers. Verizon says its current customers won’t see any immediate impact from this move, though it’s probably a fair guess that somebody from IBM will be reaching out to them soon.
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