IBM feeds its hybrid cloud ambitions with deal to buy Nordcloud

IBM
IBM is buying European cloud startup Nordcloud to add public cloud consulting talent to its roster of employees. (IBM)

IBM continues to march forward on executing its hybrid cloud plan with a deal to buy European cloud startup Nordcloud. Financial terms of the deal, which is slated to close in the first quarter of next year, weren't disclosed.

Helsinki, Finland-based Nordcloud is the latest in a series of deals this year by IBM CEO Arvind Krishna to make IBM a prime-time player in the hybrid cloud space.

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When IBM announced in October it was cleaving the 109-year company into two separate companies in order to better serve the hybrid cloud sector, Big Blue said it saw hybrid cloud as a $1 trillion market opportunity.

IBM has been honing its focus on the cloud ever since it bought open source vendor Red Hat for $34 billion last year. As part of that deal, Red Hat CEO James Whitehurst came over to IBM after which he was later named president.

Krishna, who led IBM's cloud computing business prior to his promotion, led IBM's charge to buy Red Hat. Krishna replaced former CEO Ginni Rometty, who is now IBM's executive chairman, in April.

Nordcloud, which was founded in 2011, is a public cloud provider to enterprises in Europe. Nordcloud claims to be one of the few cloud providers to be triple certified by Amazon Web Services, Google Cloud Platform and Microsoft Azure.

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While IBM has spent a ton of money and energy on its hybrid cloud platform this year, former Optiva CEO Danielle Royston was critical of IBM's cloud approach for telcos in her year-end predictions last week. She provided her take on the Nordcloud deal.

"IBM's acquisition of Nordcloud is focused on acquiring public cloud talent, specifically talent that knows the hyperscaler clouds well to help jump-start their new cloud consulting services business," Royston said Monday morning. "I'm sure they are under pressure to ebb the tsunami of public cloud adoption amongst their customers, and so they either need to catch the wave and capitalize on it themselves or try to do a last ditch effort to influence what movement they can to stay on their hybrid cloud."

According to Crunchbase, Nordcloud has raised a total of $25 million in Series A funding. Once the deal closes, Nordcloud will become an IBM company.

"IBM's hybrid cloud approach is very complementary with our cloud-native approach to helping clients migrate, manage and modernize in the cloud," said Nordcloud's Fernando Herrera, chairman and founder, in a statement. "As an experienced partner in today's cloud ecosystems, we work with all of the public cloud providers for the good of our clients throughout Europe. I am very excited to embrace IBM's open innovation mindset and help grow its global footprint."

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For telcos, Big Blue has cloud deals in place with AT&T and Verizon, among others, which include AI and edge compute elements. While IBM has made strides in the cloud sector, it still trails Amazon Web Services and Microsoft Azure by a wide margin.