Big Names are Working to Acquire Cloud Computing Startups

The cloud computing marketplace is an evolving landscape filled with corporate giants, plucky startups, and creative innovators intent on launching the next big cloud breakthrough. In this constantly shifting environment, many cloud competitors are diligently working on ways to get an edge over their rivals. Part of this strategy, at least on the part of the larger cloud companies, involves acquiring cloud startups that feature unique services and products. This helps the larger companies diversify their offerings, increase their share of the market, and incorporate new ideas with the goal of moving their business forward. It’s a model that has been used in other industries, so it should come as little surprise that the cloud marketplace is pursuing it. Recent history shows the big names in cloud computing are eager to acquire promising startups. The following is just a brief look at acquisitions from the past few months.

Cisco and Piston Cloud Computing

In June, Cisco announced they would be acquiring the startup Piston Cloud Computing. While an acquisition such as this isn’t necessarily unusual, it’s important to note that this is part of a greater strategy for Cisco. The tech company and its partners have been hard at work on what they call the Intercloud. This work essentially aims at taking cloud networks all over the world and connecting them into one giant network. Intercloud services appears to be a major goal Cisco is shooting for, which is why the company jumped at the chance to acquire Piston. As Cisco explains, the knowledge of distributed systems and automated deployment offered by Piston will help in this effort by delivering added capabilities and products more quickly.

Microsoft and Adallom

Microsoft is one of the leading cloud providers in the world, so acquisitions of cloud startups shouldn’t be startling. Even so, Microsoft recently announced it bought Adallom, an Israel-based security startup that specializes in protecting content and programs found in the cloud. Microsoft has pursued an aggressive cloud strategy, with more of its data and software being offered over cloud computing networks. Security remains a top concern for businesses when it comes to cloud computing, so it makes sense for Microsoft to acquire a company that specializes in making sure everything on the cloud is well protected. Microsoft certainly thinks it’s a goal worth fighting for, as the purchase price is estimated to be around $250 million.

IBM and Blue Box

Also in June, on the same day Cisco announced the acquisition of Piston, competitor IBM revealed they had bought Blue Box. Blue Box is a managed private cloud provider built on OpenStack. They basically operate by helping customers easily deploy their workloads across hybrid cloud environments. The acquisition is a response to a growing trend of businesses using hybrid clouds -- a combination of public and private cloud environments. IBM has stated that the company wishes to help customers move data across different clouds, so making Blue Box part of the company will go a long way toward making that concept a reality. The acquisition means a simpler way to run clouds, and that ease may lead to more customers.

CenturyLink and Orchestrate

CenturyLink is also endorsing the acquisition strategy. The cloud and telecommunications provider announced in April that it had acquired Orchestrate for around $10 million. Orchestrate is a startup that sports a fully managed cloud database. It’s part of the Database-as-a-Service (DBaaS) market, which while still a small market, has been rapidly growing in recent years. This acquisition makes CenturyLink a more versatile company with the ability to participate in different types of cloud markets. The acquisition of Orchestrate is just the latest one that CenturyLink has pursued. Other acquisitions include DataGardens, Tier 3, and AppFog. This strategy is part of a larger effort to make CenturyLink a competitor in line with Amazon, Microsoft, and Google.

By now, it should be clear that acquisitions are just one way the cloud marketplace is changing. This constant state of flux is one reason the cloud is an exciting topic among tech experts. While there are certainly a number of cloud providers at the top of the marketplace, with so much change happening and a major push to acquire the startups with the best ideas, there is no guarantee that those on top will remain on top forever.