Verizon has announced it is selling its cloud and managed hosting service to IBM, alongside working with the Armonk giant on a ‘number of strategic initiatives involving networking and cloud services’.
“This is a unique cooperation between two tech leaders to support global organisations as they look to fully realise the benefits of their cloud computing investments,” said George Fischer, SVP and group president of Verizon Enterprise Solutions (VES) in a statement.
Last February, Verizon told customers in an email that it was shutting down ‘any virtual servers running on Public Cloud or Reserved Performance Cloud Spaces’ on April 12. The company clarified in a statement to CloudTech that it was ‘discontinuing its cloud service that accepts credit card payments’, however John Dinsdale, a chief analyst at Synergy Research, saw things differently.
“Telcos generally are having to take a back seat on cloud and especially on public cloud services,” he told this publication last year. “They do not have the focus and the data centre footprint to compete effectively with the hyperscale cloud providers, so they are tending to drop back into subsidiary roles as partners or on-ramps to the leading cloud companies.”
How prescient that statement is now. IBM would certainly be classified as one of the hyperscale operators; alongside Amazon Web Services (AWS), Microsoft and Google, the four leading players continue to grow more quickly than the overall market, according to Synergy’s figures.
What’s more, various links between the two companies means this move makes sense. John Considine, general manager at IBM Cloud Infrastructure Services, was previously CTO of Verizon Terremark. The companies have also partnered on various initiatives, including in the creation of Verizon’s cognitive customer experience platform, built using IBM’s cloud and infrastructure as a service offerings.
“Our customers want to improve application performance while streamlining operations and securing information in the cloud,” Fischer added. “VES is now well positioned to provide those solutions through intelligent networking, managed IT services and business communications.”
Verizon said it was notifying affected customers directly, though adding it did not expect any immediate impact to their services. The transaction is expected to close later this year.