IBM to Buy Verizon’s Private Cloud, Managed Hosting Business

Cloud computing

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in February and March.**

Verizon is selling its private cloud and managed hosting services to IBM.

Verizon's George FischerGeorge Fischer, senior vice president and group president of Verizon Enterprise Solutions, wrote in a blog Wednesday that the carrier will partner with IBM for “strategic initiatives” in cloud and networking.

“This is a unique cooperation between two tech leaders to support global organizations as they look to fully realize the benefits of their cloud computing investments,” Fischer said.

The companies have not disclosed the terms of the deal, but it is expected to close later this year.

Fischer says Verizon Enterprise Solutions is set up to provide customers intelligent networking, business communications and managed IT services.

“It is the latest development in an ongoing IT strategy aimed at allowing us to focus on helping our customers securely and reliably connect to their cloud resources and utilize cloud-enabled applications,” he said. “Our goal is to become one of the world’s leading managed services providers enabled by an ecosystem of best-in-class technology solutions from Verizon and a network of other leading providers.”{ad}

Fischer said he does not expect end users to experience any changes in their services.

“We will formally notify and update customers as appropriate with additional information nearer the close of the deal,” he wrote.

Verizon closed two of its public cloud offerings – Verizon Public Cloud and Reserved Public Cloud – last April. The sale of its private cloud business follows Verizon’s decision to pass off 29 of its data centers to Equinix for $3.6 billion. Much of Verizon’s data center and cloud services stemmed from the Terremark business that it acquired in 2011.

Frederic Lardinois of TechCrunch says the sale to IBM signals the end to Verizon’s “loftier ambitions in the cloud.”

“Verizon, it seems, never reached the scale to compete with the likes of Amazon, Google and Microsoft in the public cloud and it also wasn’t quite able to scale its private cloud business to the point where it was worth pursuing this strategy in the long run, especially given the strong competition there, too,” he wrote Wednesday.

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