IBM Buys Online Database Provider Cloudant as Cloud Wars March On

2/24/14Follow @curtwoodward

IBM is taking another bite out of the cloud software world as it tries to keep up with much younger technology companies.

Today, IBM announced it was buying Boston-based Cloudant, an online database software provider. The price wasn’t revealed. Cloudant had raised about $15 million in private investment since it was founded in 2008.

Cloudant’s service handles large, complex sets of data for mobile and Web software developers, essentially outsourcing some of the behind-the-scenes processing work and freeing customers to work on their applications.

The purchase comes just as IBM is once again touting its investments in cloud computing, which represents a huge shift for the traditional software market as software applications—and the digital infrastructure to keep them running—move to the Internet.

Also this morning, the company said it was planning to shift $1 billion in spending toward cloud projects, including an effort to move its business-focused software online. Last summer, IBM spent a reported $2 billion on SoftLayer, a Dallas-based cloud software infrastructure company.

After that purchase, it may have only been a matter of time before IBM gobbled up a provider like Cloudant, which built its online database software on top of SoftLayer’s technology.

“Our joint customers benefit from a tight coupling of our respective services,” Cloudant CEO Derek Schoettle wrote this fall. “As such, some of Cloudant’s biggest and most important accounts are on SoftLayer infrastructure. Now, they’ll be on IBM Cloud Services.”

Cloudant’s three founders are former MIT particle physicists, and the startup was part of the Y Combinator accelerator program, back when it still had a branch in Boston. It also has offices in Seattle, San Francisco, and in the U.K.

Cloudant recently said it had topped 20,000 customers, and reported that its annual revenue grew 175 percent in 2013, although no actual figures were provided. The company’s most recent $12 million Series B investment was led by new investors Devonshire Investors, Rackspace Hosting, and Toba Capital. Previous investors Avalon Ventures, In-Q-Tel, and Samsung’s venture arm also participated.

The acquisition adds to IBM’s longstanding penchant for software acquisitions in the Bay State: since 2003, it’s now snapped up at least 22 companies with headquarters or major operations in Massachusetts. The last was Trusteer, a security firm that sold in August for a reported $800 million.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

By posting a comment, you agree to our terms and conditions.