Verizon exits Cloud

Verizon Enterprise Solutions on Tuesday (5/2) said it had reached a deal for IBM to buy its cloud and managed hosting services. No value of the sales price was indicated.

Verizon says it will still sell services to “securely and reliably connect to their cloud resources” – this is presumably Verizon carrier and transport security services which will allow customers to “connect” to the various cloud providers in the industry.   With this sale to IBM, Verizon just won’t be hosting applications on its cloud infrastructure, which it gained by acquiring Terramark in 2011 for $1.4bn.

This news with IBM follows the earlier announcement where Equinix announced it would pay $3.6bn for Verizon’s 29 datacenter locations.

Verizon had ambitions of moving into the cloud back in 2011 when it acquired Terremark.

The acquisition by IBM is expected to close later this year.

As George Fischer, SVP and group president of Verizon Enterprise Solutions, notes in the announcement, IBM and Verizon will work together on a number of “strategic initiatives” that will involve networking and cloud services. “This agreement presents a great opportunity for Verizon Enterprise Solutions (VES) and our customers,” Fischer writes. “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.”

It appears Verizon never reached the scale to compete with other infrastructure cloud providers like Amazon, IBM and Microsoft.

With this move, IBM bolsters its position in the private cloud and managed hosting space to help them better compete.