IBM Acquires Cast Iron Systems to Expand Software and Services Division

Strategic Insights -

IBM has bolstered its expansion efforts in the software and services segment with the acquisition of Cast Iron Systems, a privately held software company based in Mountain View, California. The deal, announced on Monday, is expected to help Cast Iron's clients integrate various cloud applications from providers such as Salesforce.com, Amazon.com, NetSuite, and SAP. The acquisition will also enable Cast Iron to reach a broader customer base and provide greater agility and business outcomes for its clients.

Key Takeaways:

  • IBM has acquired Cast Iron Systems, a privately held software company with approximately 75 employees, to expand its software and services division.
  • The deal will help Cast Iron's clients integrate cloud applications from providers such as Salesforce.com, Amazon.com, NetSuite, and SAP.
  • Cast Iron's current clients include Time Warner Inc, Peet's Coffee & Tea, Allianz, NEC, Dow Jones, and ShoreTel Inc.
  • The acquisition signals IBM's gradual retreat from sales of commoditized hardware, with the company's software division having made more than 55 acquisitions since 2003.
  • IBM's WebSphere general manager, Craig Hayman, emphasized the importance of integration challenges in adopting alternative delivery models for managing businesses, highlighting the benefits of the combination of IBM and Cast Iron Systems.
  • Cast Iron Systems' president and CEO, Ken Comee, stated that the acquisition will enable the company to bring its cloud integration software and services to a global customer set through IBM's global reach and vast network of partners.

Statistics:

  • The cloud computing market is estimated to grow to $126 billion by 2012 from $47 billion in 2008.
  • IBM's software division has made more than 55 acquisitions since 2003.
  • On the day of the announcement, IBM shares were trading up 0.64 percent at $129.82 on the NYSE.

Sources:

  • "IBM Acquires Cast Iron Systems"
  • "IBM Expands Cloud Computing Capabilities with Cast Iron Acquisition"
  • "Cast Iron Systems Website"
  • "IBM's Software Division News Release"
  • "Cloud Computing Market Size Estimates" by industry experts.