It’s been an interesting week for hosted services given IBM’s purchase of SoftLayer for $2 billion and Salesforce’s $2.6 billion acquisition of ExactTarget. While there are few naysayers regarding the trend towards cloud computing and hosted services, it was the timing of these two moves that caught my attention. IBM is a bell weather company in that it adjusts to new directions in technology and IT services better than any other high tech company. I have never worked for IBM but I have had the opportunity to partner with them on various projects during my career. With their purchase of SoftLayer they have projected annual revenues related to cloud services at $7 billion by 2015.
SoftLayer is a Dallas start up begun in 2005 that now has revenues of $400 million per year. It began as a company servicing small technology businesses with a prebuilt hosting platform that could be deployed in a matter of hours. The company sold to social media, gaming and other Internet related sites. However, it apparently garnered IBM’s interest when it developed solutions for enterprises. This expansion beyond SMBs has been a trend noted with nearly every cloud based application.
The acquisition of ExactTarget by Salesforce is an example of a cloud computing company expanding by adding other cloud services. Salesforce.com is well known for offering a hosted service to manage marketing campaigns, lead management, sales activity and customer information. ExactTarget is lesser known but rather influential in providing digital marketing tools to over 6000 companies. Salesforce states the objective of the acquisition is to provide “a world-class marketing platform across email, social, mobile and the Web”.
Both of these acquisitions reinforce ANPI’s decision to deliver an innovative hosted communications platform complemented by hosted IT services to SMBs. Cloud services is a difficult market to estimate since it has many definitions and is measured by various analysts in different ways. However, even the most conservative estimates project growth rates at nearly 20% per year. Gartner predicts cloud computing spending to increase by 100% in 2016 to $207 billion.
The takeaway is that cloud computing in its many forms offers a solution or application for every business. Therefore, you can benefit from subscribing to, promoting or selling hosted services. Cloud computing allows you to leverage the IT infrastructure and application innovation built by others while you and your business can focus on growing revenues and delivering value.