IBM acquires Blue Box, moves into private cloud

Private managed clouds are an attractive alternative for CIOs hesitant to move to public clouds.
Written by Holger Mueller, Analyst

The need to manage private clouds is heating up. Last week EMC announced plans to acquire Virtustream. A few days ago Cisco announced its intent to purchase Piston Cloud. IBM is also getting in the game--a few days ago it announced the purchase of Blue Box.

See also:IBM buys Blue Box, adds OpenStack private cloud as a service

Here I dissect IBM's announcement of its acquisition of Blue Box:

ARMONK, N.Y - 03 Jun 2015: IBM (NYSE: IBM) today announced it has acquired Blue Box Group, Inc., a managed private cloud provider built on OpenStack.

Blue Box is a privately held company based in Seattle that provides businesses with a simple, private cloud as a service platform, based on OpenStack. Customers benefit from the ability to more easily deploy workloads across hybrid cloud environments. Financial details were not disclosed.

MyPOV - Blue Box originally started as a website hosting provider and has evolved to a OpenStack managed private cloud provider.

Enterprises are seeking ways to embrace all types of cloud to address a wide range of workloads. Today's announcement reinforces IBM's commitment to deliver flexible cloud computing models that make it easier for customers to move to data and applications across clouds and meets their needs across public, private and hybrid cloud environments. With Gartner forecasting that 72 percent of enterprises will be pursuing a hybrid cloud strategy this year [1], it is increasingly important for companies to leverage multiple models while maintaining consistent management across their cloud platforms.

MyPOV - For the longest time the cloud wars were fought over the public cloud. It looks like enterprises are ready to move to cloud, but in a more conservative fashion.

Through Blue Box, IBM will help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud. Blue Box also strengthens IBM Cloud's existing OpenStack portfolio, with the introduction of a remotely managed OpenStack offering to provide clients with a local cloud and increased visibility, control and security.

MyPOV - This is the most important outcome of this acquisition - the capability to manage an OpenStack system deployed remotely. Enterprises may still want to utilize their data centers and see their servers, but are more open to have them managed remotely.

This move further accelerates IBM's commitment to open technologies and OpenStack. IBM has 500 developers dedicated to working on open cloud projects to bring new cloud innovations to market. With Forrester Research recently finding that more than twice as many firms use or plan to use IBM Cloud as their primary hosted private cloud platform than the next closest vendor [2], Blue Box is a strategic fit into the IBM Cloud portfolio.

Blue Box can enhance and complement developer productivity by:

Speeding delivery of applications and data through simplified and consistent access to public, dedicated and local cloud infrastructures

Supporting managed infrastructure services across hybrid cloud environments and IBM's digital innovation platform, Bluemix

Offering a single management tool for OpenStack-based private clouds regardless of location

MyPOV - Blue Box partnered with small PaaS vendor Mendix, the mention here of Bluemix may make the fulfillment of those deployments uncertain. In my view it may be fruitful for IBM to look at the Mendix capabilities.

This acquisition will enable IBM to deliver a public cloud-like experience within the client's own data center, relieving organizations of the burden of traditional private cloud deployments.

"IBM is dedicated to helping our clients migrate to the cloud in an open, secure, data rich environment that meet their current and future business needs," said IBM General Manager of Cloud Services Jim Comfort. "The acquisition of Blue Box accelerates IBM's open cloud strategy making it easier for our clients to move to data and applications across clouds and adopt hybrid cloud environments."

"No brand is more respected in IT than IBM," said Blue Box Founder and CTO Jesse Proudman. "Blue Box is building a similarly respected brand in OpenStack. Together, we will deliver the technology and products businesses need to give their application developers an agile, responsive infrastructure across public and private clouds. This acquisition signals the beginning of new OpenStack options delivered by IBM. Now is the time to arm customers with more efficient development, delivery and lower cost solutions than they've seen thus far in the market."

IBM currently plans to continue to support Blue Box clients and enhance their technologies while allowing these organizations to take advantage of the broader IBM portfolio. [...]

MyPOV - Key statement. Blue Box customers should contact IBM asap to ensure they can retain the services that matter to them.

Overall POV

It's a good move for IBM, as the acquisition opens new service offerings in the IBM Cloud portfolio. Given the recent acquisitions at EMC and Cisco, it looks like the private cloud is alive and well. The popularity of private cloud signals a failure of 'pure' public cloud players like AWS and Google, to move all their load to a public cloud setup. It will be interesting to see the final mix of of private cloud - e.g. the ones managed with BlueBox - vs public cloud when the market matures in a few years. IBM listens to customers, wants more cloud revenue, so expect it to extract all it can out of private cloud.

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