IBM Pushes Forward With Its New Hybrid Cloud-First Strategy

IBM has announced that it is set to acquire Nordcloud, a Finland-based professional services provider that assists enterprises with their cloud projects. While the financial terms of the deal were not disclosed, the transaction is set to be finalized in the first quarter of 2021.

Established in 2011, Nordcloud, has annual revenues of more than $61 million. Nordcloud has AWS, Google Cloud Platform, and Microsoft Azure certifications, which it uses to set up enterprise IT infrastructure for cloud-native application development and deployment.

Nordcloud competes in a crowded cloud infrastructure managed services space. It competes with integrators such as Accenture, Wipro, Deloitte, and Cognizant as well as companies like Rackspace. Nordcloud's key industries are manufacturing, technology, and financial services and the company offers everything from tooling to application services as well as managed cloud offerings.

Once it becomes part of IBM, it will likely push its clients toward IBM’s solutions for managing their hybrid cloud environments. IBM is set to gain invaluable software engineering knowledge with this deal. In addition to assisting companies with cloud management tasks, Nordcloud also provides application development services which help customers move existing workloads to the cloud. The company is certified to take on projects across all three major infrastructure-as-a-service platforms.

The acquisition will advance IBM’s new hybrid cloud-first strategy. As part of achieving its new vision, IBM announced in 2020 that it has plans to spin off its $19 billion managed infrastructure services business, which mainly operates in lower-margin segments such as remote network administration. IBM earlier spent $34 billion to acquire Red Hat, whose OpenShift Kubernetes platform and RHEL distribution of Linux are widely used in enterprise hybrid cloud environments.

The acquisition comes about a month after IBM also announced the purchase of Instana, a company that creates software that makes it easier to detect malfunctioning applications.

“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,” said John Granger, Chief Operating Officer of IBM’s Global Business Services division. “Nordcloud’s cloud-native tools, methodologies and talent send a strong signal that IBM is committed to deliver our clients’ successful journey to cloud.”