IBM Snags Cloud Brokerage Software Company Gravitant

The world of cloud is changing yet again. IBM announced recently that it is acquiring Austin, Texas–based Gravitant. Financial details of the deal were not released.

With the release of its cloudMatrix product in 2011, Gravitant was one of the few companies to make a successful switch from being an IT consulting firm to becoming a product company. It plays in a very lucrative space in the cloud services arena, essentially allowing enterprises and service providers to be “service brokers” for cloud services. With hybrid cloud’s increasing traction as the “go to” strategy for the enterprise and for solution providers, Gravitant is positioned very well here.

The enterprise customers that I have worked with have either started down the path in fits and starts or are still trying to figure out their cloud strategy. I have used the graphic below to help them understand where and how cloud services can play into their overall IT strategy and that it will be a mix of solutions and infrastructure, both inside the firewall and out.

The beautiful thing about Gravitant is that it has produced an elegant software product to help enterprises and solution providers accomplish the tough work of trying to corral all of the moving pieces and parts, cost structures, etc. It has constructed a path to follow for reaching the goal of next-gen IT.

Now comes the interesting part: the IBM acquisition of Gravitant. From the press release:

IBM plans to integrate the Gravitant capabilities into the IBM Global Technology Services unit. In addition, IBM Cloud plans to integrate the capabilities into Software-as-a-Service offerings, extending the company’s growing hybrid cloud solutions and capabilities.

This spells a significant movement in how to drive bigger cloud revenue on top of its Softlayer business, which has really been the only bright spot in IBM earnings calls lately, per the latest earnings call on October 19:

Strategic imperatives revenue:

• Up 27 percent year-to-year, adjusting for currency and divested business; up 17 percent as reported;
• Up more than 30 percent year-to-date adjusting for currency and divested business; up 20 percent as reported:
• Cloud revenue up more than 65 percent year-to-date adjusting for currency and divested business; up more than 45 percent as reported;
  • Total cloud revenue of $9.4 billion over trailing 12 months;
  • For cloud delivered as a service, annual run rate of $4.5 billion vs. $3.1 billion in third-quarter 2014

The addition of Gravitant is a brilliant acquisition for IBM Cloud, but time will tell whether IBM will integrate it properly and not mess with the culture that made Gravitant so valuable.