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<div class="image-container float_right" style="width:458px"><div class="image"></div>AP<keyword id="10875" type="CITY" weightage="60" keywordseo="IBM">IBM</keyword> CEO Ginni Rometty sees a prize in SoftLayer.</div>A bunch of big <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword> companies are lining up to buy a <keyword id="6373689" type="ORGANIZATION" weightage="60" keywordseo="Cloud-computing">cloud computing</keyword> company called SoftLayer Technologies, <a href="http://www.reuters.com/article/2013/03/15/us-softlayer-sale-idUSBRE92D18M20130315">Reuters' Nadia Damouni reports</a>.
IBM and <keyword id="148679" type="CITY" weightage="60" keywordseo="EMC">EMC</keyword> are reportedly in talks right now to buy the company in a deal that could be worth more than $2 billion. The sales process is being handled by Morgan Stanley and Credit Suisse.
Dallas, Texas-based SoftLayer is privately held, with the majority of shares owned by GI Partners. It has reportedly turned down other suitors before, like AT&amp;T.
SoftLayer is a cloud-computing and Web-hosting provider with about 25,000 customers, mostly small and mid-sized customers, making it the world's largest privately held website hoster, Damouni reports.
EMC most likely wants this company to boost its brand new cloud-computing initiative. EMC owns a majority stake in <keyword id="141089" type="CITY" weightage="60" keywordseo="VMware">VMware</keyword>, a maker of cloud-computing software. Last week the two announced details for a new <a href="http://www.businessinsider.com/paul-maritz-vmware-emc-pivotal-initiative-2012-12">spinout called Pivotal</a>, which offers a cloud-computing service that lets developers write and host applications without having to configure hardware.
The purchase of SoftLayer could provide EMC with a ready-made infrastructure to use for Pivotal.
More importantly, one of SoftLayer's big customers is Citrix. Citrix competes with VMware, with both advancing their own architectures for cloud computing.
IBM recently became a champion of <keyword id="1664678" type="UNKNOWN" weightage="60" keywordseo="OpenStack">OpenStack</keyword>, an open-source cloud-computing architecture that competes with both VMware's and Citrix's. Citrix prefers a technology called <keyword id="1756833" type="UNKNOWN" weightage="60" keywordseo="CloudStack">CloudStack</keyword>.
SoftLayer currently <a href="http://redmondmag.com/blogs/the-schwartz-cloud-report/2012/06/rackspace-to-citrix-on-cloudstack-what-were-you-thinking.aspx">uses both OpenStack and CloudStack</a>.
So control of SoftLayer would put the buyer in an interesting position in this complicated competitive dance.

IBM, EMC, And Others Are All Trying To Buy The Same $2 Billion Cloud-Computing Company

<div class="image-container float_right click-to-enlarge" style="width:425px"><div class="image"><a title_source="Flickr/andi.vs.zf" title_caption="IBM CEO Virginia Rometty " class="zoomin" href="http://static5.businessinsider.com/image/4f7a1e226bb3f7616c000029-960/rometty-punch.jpg"></a></div><a href="http://www.flickr.com/photos/andivszf/4937321550/sizes/l/in/photostream/">Flickr/andi.vs.zf</a><keyword id="10875" type="CITY" weightage="60" keywordseo="IBM">IBM</keyword> CEO Virginia Rometty </div>IBM <a href="http://www-03.ibm.com/press/us/en/pressrelease/40519.wss">last week said</a> that it was going to use a cloud technology called <keyword id="1664678" type="UNKNOWN" weightage="60" keywordseo="OpenStack">OpenStack</keyword> in a big, big way.
This has major implications for the cloud industry and could really hurt one player in particularly—VMware.
All of the cloud infrastructure IBM builds for itself and for customers will now run on OpenStack. This includes its own public "smart clouds" and every "private cloud" it installs for its enormous base of <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword> customers.
<keyword id="6373689" type="ORGANIZATION" weightage="60" keywordseo="Cloud-computing">Cloud computing</keyword> involves delivering computing power, storage, and other resources over the Internet, so developers don't have to worry about maintaining their own hardware. Private clouds use similar technology, but run inside a company's own data centers and hence aren't shared by multiple customers.
IBM's influence could turn OpenStack into the immediate frontrunner for cloud technologies, both public and private.
OpenStack isn't owned by anyone. It's an open-source project with contributions from more than 8,000 people at 1,000 companies, led by Rackspace. It was based on a project that originated at NASA.
Anyone can use it for free, though they usually pay some vendor for consulting services and maintenance.
With IBM pushing OpenStack, this encourages more enterprises and service providers to use OpenStack, too, instead of <keyword id="141089" type="CITY" weightage="60" keywordseo="VMware">VMware</keyword>'s vCloud or Citrix's CloudStack.
"We dreamed that one day IBM might get involved and do for OpenStack what they've done for Linux and other open-source communities in the past," Mark Collier, COO of the OpenStack Foundation, <a href="http://www.infoworld.com/t/cloud-computing/what-ibms-embrace-of-openstack-really-means-214238">told Infoworld editor Eric Knorr</a>.
Now IBM is doing just that.
Until IBM threw its weight behind OpenStack, VMware's vCloud had a big advantage. Most big companies are already using VMware's flagship "server virtualization" technology which lets multiple operating systems and applications share the same physical server.
It's a smooth leap to a VMware vCloud private cloud from there.
But now, enterprises might think twice about vCloud. And once they bring OpenStack in the door, they may not stick with VMware's flagship server technology either.
VMware is fighting back. It is rumored to be working on its own public cloud service, which would compete with IBM, Rackspace, and, of course Amazon, reports <a href="http://www.crn.com/news/cloud/240150435/vmware-confirms-public-cloud-project-on-twitter-then-backtracks.htm">CRN's Kevin McLaughlin</a>.
That's a risky move for VMware. It has built vCloud into a success by selling it just to enterprises and service providers. More than 200 service providers offer vCloud. Now VMware will be competing with them, which could drive them into the arms of rivals running OpenStack or CloudStack.
At stake is every vendor's piece in a market some are calling "the next Internet." The public cloud market <a href="http://www.gartner.com/newsroom/id/2163616">will hit $206.6 billion in 2016</a>, Gartner predicts. And that doesn't even include the billions that will be made from applications that run on those clouds.
We reached out to VMware for comment on IBM's move but haven't heard back.

IBM Just Threw What Could Be A Knockout Punch At VMware

<table class="image-container float_right" width="200"><tr><td><div class="image"></div><a href="https://twitter.com/zer0tweets">Twitter/@zer0tweets</a>Boris Renski, cofounder, Mirantis</td></tr></table>PayPal and eBay are yanking VMware software from some 80,000 servers and replacing it with the free and open-source alternative known as OpenStack, Boris Renski, OpenStack Foundation board member told Business Insider.
Renski is also a cofounder of Mirantis, an OpenStack consultant company <a href="http://www.businessinsider.com/dell-intel-invest-in-openstack-startup-2013-1">backed by Dell and Intel.</a> Mirantis worked with PayPal on the project, he says.
PayPal used a set of tools from Mirantis called Fuel, a PayPal spokesperson told us.
Today Mirantis released Fuel for free to the public. (In geek speak: it was released under the open source Apache 2.0 license). It's a collection of scripts and software that helps companies deploy OpenStack.
Initially, PayPal is replacing VMware on about 10,000 computer servers. Those servers will go live this summer, Renski said. "The grand vision for project is, over time, they will replace all of their virtual infrastructure with OpenStack, not just PayPal, but PayPal and eBay, together," Renski said. That's about 80,000 servers across their data centers, he said.
PayPal has been a big supporter of OpenStack for a while. But this project is still dangerous territory for VMware, as PayPal could become an example of how other <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword> can replace VMware with OpenStack, too.
To be sure, enterprises are not dying to get rid of VMware, even to save money on software license fees. Most of them really love VMware's software because it's a reliable way to run lots of different applications on the same computer server.
But cloud wars are coming between different so-called "cloud operating" systems: VMware is up against OpenStack (backed by IBM, HP, Rackspace, Red Hat, others) and CloudStack (another open source project, backed by Citrix). 
Think of this like the desktop operating system wars: Windows vs. Macs vs. Linux.
The ultimate goal for most enterprises is something called a "hybrid" cloud. This means that a company will run some of its apps in its own data center (a "private cloud") and some of them in a public cloud. They can easily move apps between the two.
More importantly, they can use multiple public clouds. If one provider has problems, they can quickly switch to another.
Enterprises will have to choose their cloud operating system and the stakes are high. Enterprises will spend <a href="http://resource.onlinetech.com/cloud-infrastructure-as-a-service-iaas-spending-to-exceed-72-billion-by-2016/">$80 billion on cloud computing by 2016, Gartner estimates</a>.
So where does the biggest cloud player, Amazon, fit into all of this? Amazon is the reason for it all. These cloud operating systems rose to compete with it. The idea is to reassure enterprises that they if they choose an alternative to Amazon, they will have lots of <keyword id="6373689" type="ORGANIZATION" weightage="60" keywordseo="Cloud-computing">cloud computing</keyword> vendors to choose from, not just one.
UPDATE: We have heard from Adrian Ionel, the CEO of Renski's company Mirantis, who says that Renski is "exaggerating the use case" of OpenStack at PayPal and that Renski's "knowledge of the project is second hand and therefore limited." Renski's title at Mirantis is <a href="http://www.mirantis.com/company/leadership/">executive vice president</a>. 
PayPal also sent us these comments to questions we had previously asked:
<div>
<div>BI: Are you using OpenStack in addition to other cloud tech like VMware's? Are you using it instead of VMware? </div>
PayPal: VMware provides important technologies for PayPal's platform. However, we do leverage a few cloud technologies including OpenStack, VMware and Red Hat so that we can architect our infrastructure to enable choice and deliver agility for our business.
BI: Is this an experiment or is it production? 
PayPal: PayPal's OpenStack project is already in production.
BI: How big a commitment have you made to OpenStack? Are you eventually using it on all your servers? Some of them? 
PayPal: PayPal’s strategy is to leverage open source products and provide meaningful insight and contribution to help advance the ecosystem. OpenStack is one of the key projects in this overall strategy. 
</div>

You Searched For "CloudStack" and got 3 results

IBM, EMC, And Others Are All Trying To Buy The Same $2 Billion Cloud-Computing Company

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IBM Just Threw What Could Be A Knockout Punch At VMware

Julie Bort

In A Dangerous Sign For VMware, PayPal Chooses Rival OpenStack

Julie Bort

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