IBM Acquisition of Cloudant Continues Cloud Capture Strategy

G00262777

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Summary

Cloudant’s NoSQL database platform as a service will help refocus IBM's mobile and cloud capabilities strategy. But it will also challenge customers who must choose among IBM’s diverse portfolio of data management solutions.

News Analysis

Event

On 24 February 2014, IBM announced that it has entered into a definitive agreement to acquire the privately held NoSQL database platform as a service (dbPaaS) provider Cloudant, for an undisclosed amount. Cloudant claims 20,000 freemium users and 260 paying customers in 34 countries. IBM expects the deal to close during 1Q14. Cloudant will join IBM's newly formed Information and Analytics Group, a business unit within the IBM Software & Systems Group.

Analysis

IBM's acquisition will help carry out CEO Ginni Rometty's strategy of refocusing IBM's portfolio, which included shedding its x86-based hardware assets and emphasizing the way the cloud and mobile elements within the Nexus of Forces are transforming enterprise IT through increased exploitation of big data. Cloudant is a distributed NoSQL document store dbPaaS, built on Apache CouchDB, with eventual consistency, multimaster replication and mobile synchronization capabilities. Cloudant supports MapReduce, GeoJSON geolocation services, and 2D and 3D query support; it also supports text search with Lucene. In addition, faceted search was on Cloudant's road map at the time of the acquisition.

The Cloudant acquisition is part of IBM's $1 billion plan, in which the vendor acknowledged it is “betting big” on mobile, cloud and Web development, and is addressing issues its customers face in dealing with the high volume and variety of data required for next-generation apps. This plan also includes:

  • Opening IBM's middleware portfolio to the cloud via Software Patterns that are portable across on-premises and cloud deployment.

  • BlueMix, a platform as a service (PaaS) for development in the cloud (see "BlueMix Refocuses IBM's Cloud Platform Strategy" ).

This deal follows IBM's January 17 announcement of its $1.2 billion investment in cloud data centers for the SoftLayer Technologies offering. About 70% of Cloudant's customers were deployed on SoftLayer. But adding Cloudant to IBM's diverse data management portfolio also poses challenges for IBM:

  • Clients will need to decide which product to use and where, choosing from among one of IBM's two document stores, or one of its relational database management systems (RDBMSs).

  • IBM must rationalize this new offering with its existing partnership with MongoDB, and its JavaScript Object Notation (JSON) support within DB2 and Informix. (BlueMix's JSON support, for example, is Informix-based.)

  • It raises questions regarding Cloudant's relationships with three hosting providers, including Amazon and Rackspace, which owned a piece of the firm. IBM has signaled that it intends to coexist with these providers, but it will also compete directly with Amazon DynamoDB, which runs only on Amazon Web Services, and Microsoft Azure. Competition will be fierce, as hosting makes up the greater part of SoftLayer's business today.

  • IBM still must build out the model for an elastic, multitenant PaaS business. By itself, Cloudant does not have all of the capabilities IBM will need to complete this offering.

Recommendations

Current and prospective IBM customers:

  • Choose among IBM's emerging RDBMSs and NoSQL document store offerings based on integration with other data sources and components, available skills, and support for mobile and cloud-based deployment.

  • Seek clarity from IBM about the direction and priority of its database management system (DBMS) road map investments.

  • Examine the multitenancy attributes of any cloud offering carefully before committing to it.

Cloudant customers:

  • Continue your current and planned use of the product and leverage IBM’s expertise to establish effective governance of cloud-based deployments.

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