IBM is making a deeper move in the cloud consulting sector, acquiring Finnish company Nordcloud for an undisclosed sum.
This is M&A deal number 527 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.
The deal will advance IBM’s cloud migration and transformation capabilities, an area where the tech giant has so far fallen behind many of its peers. In October 2020, IBM announced it was doubling down on its core hybrid cloud portfolio of products and services -- and spinning out its managed infrastructure business.
The market for cloud professional services will exceed $200 billion by 2024, according to many leading IT industry analysts.
This acquisition is an acknowledgment that IBM’s own cloud is holding back its ability to modernize legacy clients, according to Gordon McKenna, CTO of Public Cloud at Ensono, a massive MSP in its own right. Speaking with ChannelE2E, McKenna called the acquisition a “bet-the-business move” for IBM.
McKenna added:
“Over the next decade, we will likely see more businesses seek to modernize legacy operations, as the move to the cloud isn't showing signs of slowing down anytime soon. IBM is a major player for IT infrastructure and has relationships with many prominent organizations, so it's definitely something other vendors will want to keep an eye on.”
Headquartered in Helsinki, Finland, Nordcloud has offices in 10 European nations. The company has provided cloud transformation services for the better part of a decade and is one of few providers with the triple certification of Amazon Web Services, Google Cloud Platform, and Microsoft Azure.
IBM Acquires Nordcloud: Complementary Cloud Approaches
John Granger, senior vice president, cloud application innovation and chief operating officer, IBM Global Business Services, commented on the deal:
"Our clients are increasingly taking a more holistic approach to application modernization that allows them to operate across a traditional IT environment, private cloud, and public clouds. IBM's acquisition of Nordcloud adds the kind of deep expertise that will drive our clients' digital transformations as well as support the further adoption of IBM's hybrid cloud platform. Nordcloud's cloud-native tools, methodologies and talent send a strong signal that IBM is committed to deliver our clients' successful journey to cloud."
Fernando Herrera, chairman and founder, Nordcloud, said:
"IBM's hybrid cloud approach is very complementary with our cloud-native approach to helping clients migrate, manage, and modernize in the cloud. As an experienced partner in today's cloud ecosystems, we work with all of the public cloud providers for the good of our clients throughout Europe. I am very excited to embrace IBM's open innovation mindset and help grow its global footprint."
Following the close of the transaction, Nordcloud will become an IBM company, the company said. The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2021.
IBM Hybrid Cloud Acquisitions: Deal List Grows
IBM has been busy on the M&A front. Recent acquisitions in the cloud sector include:
- Instana for multi-cloud application performance monitoring (APM) software;
- WDG Automation for robotic process automation (RPA); and
- of course Red Hat for the massive cloud software bet spanning Linux, cloud containers, storage and more.
Still, IBM's business transformation toward cloud software and services remains a challenging one. The company recently confirmed plans for 10,000 job cuts in Europe.
