IBM to snap up remnants of Verizon's cloud business

After bowing out of the public cloud last year, Verizon is now shedding its private cloud offerings.

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The sale to IBM marks the end of Verizon's venture into the cloud infrastructure business.

Image: IBM

After bowing out of the public cloud last year, Verizon is selling its private cloud business to IBM.

Verizon Enterprise Solutions on Tuesday said it had reached a deal for IBM to buy its cloud and managed hosting services. It has not revealed the value of the sale, but says it and IBM will be working on "strategic initiatives involving networking and cloud services".

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The sale to IBM marks the end of Verizon's venture into the cloud infrastructure business, and allows it to focus on reselling datacenter services in conjunction with its own managed network, security, and communications services.

Verizon says it will still sell customers services to "securely and reliably connect to their cloud resources and utilize cloud-enabled applications". It just won't be hosting anything on its cloud infrastructure, which it gained by acquiring Terramark in 2011 for $1.4bn.

Verizon officially launched its Cloud Compute and Cloud Storage in 2013, but by 2014 it was already looking for a way out. In December, Equinix announced it would pay $3.6bn for Verizon's 29 datacenter locations as the telecoms giant pursued its Yahoo deal to focus on video and advertising.

Equinix completed that acquisition on Monday, which also included an agreement for Verizon to resell Equinix's colocation and interconnection services bundled with its own managed security, network, and communications services. The companies aim to help customers manage hybrid and multi-cloud deployments.

Admitting defeat to Amazon, Google, and Microsoft, Verizon last February shut down its public cloud offerings and told customers to switch to the virtual private cloud, which will soon be transferred to IBM.

"This agreement presents a great opportunity for Verizon Enterprise Solutions and our customers," said George Fischer, SVP and group president of Verizon Enterprise Solutions.

"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."

Verizon will be notifying affected customers directly closer to the time the deal closes, although Fischer says the company does "not expect any immediate impact to their services as a result of this agreement".

Verizon expects the deal to close later this year.

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