IBM Advances Cloud Initiatives with Acquisition of Cast Iron Systems

IBM announced that it has acquired Cast Iron Systems to broaden the delivery of cloud computing services for clients.  Cast Iron Systems, a privately held company founded in 2001 and based in Mountain View, Calif., provides cloud integration software, appliances and services.  Cast Iron Systems' clients include Allianz, NEC, Peet's Coffee & Tea, Dow Jones, Schumacher Group, ShoreTel, Sports Authority, Time Warner, and Westmont University. 

"We recommended the acquisition because we're getting ready to come out with our public cloud offering," Walter Falk, global leader and executive in charge of IBM SOA Infrastructure, tells 5 Minute Briefing. The acquisition will expand IBM's process and integration software portfolio, which grew more than 20% in the first quarter of 2010.  "It will reside in our Websphere division because its an integration solution," Falk says. IBM says it expects the global cloud computing market to grow at a compounded annual rate of 28% from $47 billion in 2008 to $126 billion by 2012.

A key challenge businesses face in successfully adopting cloud delivery models is the integration of disparate systems running in their data centers with new cloud-based applications, and, in the past, this involved time-consuming and resource-draining coding work, says IBM.  Through Cast Iron Systems, IBM is gaining the ability to help businesses rapidly integrate their cloud-based applications and on-premise systems.  The acquisition also advances IBM's capabilities for a hybrid cloud model, which is attractive to enterprises because it allows them to blend data from on-premise applications with public and private cloud systems.

"We're working with hundreds of customers to help them build private clouds," Falk explains. "We understand enterprise customers are going to have hybrid cloud environments, and multiple cloud implementations. We understand the biggest challenge is migrating workloads into the enterprise is going to be integration between clouds and enterprises."

IBM says that by adding Cast Iron Systems to its portfolio, it will be able to now offer clients a complete platform to integrate cloud applications from providers including, Amazon, NetSuite and ADP with on-premise applications, such as SAP and JD Edwards.  Using Cast Iron Systems' hundreds of pre-built templates and services expertise, expensive custom coding can be eliminated, allowing cloud integrations to be completed in the space of days, rather than weeks or longer.  These results can be achieved using a physical appliance, a virtual appliance or a cloud service. "Our public cloud is focused on the enterprise," Falk explains. "We intend to have the best capabilities for public clouds in the enterprise."

IBM will continue to support and enhance Cast Iron Systems' technologies and clients while allowing them to take advantage of the broader IBM portfolio.  Cast Iron Systems' approximately 75 employees will be integrated into IBM. "We expect to see a lot more announcements in the next six to twelve months," Falk says.