SEC Investigating IBM's Cloud Revenue Reporting - Page 2

Meanwhile, IBM has been beefing up its cloud infrastructure technology, acquiring resources to better compete with more-established players in the cloud space, such as Amazon Web Services (AWS).

Earlier this month, IBM announced a definitive agreement to acquire CSL International, a provider of virtualization management technology for IBM's zEnterprise system. CSL is a privately held company headquartered in Herzliya Pituach, Israel. A strategic investment in the System z portfolio, the acquisition deepens the consolidation and cloud capabilities by offering simplified management of the virtualization environment.

And on the IBM Q2 2013 earnings call, Loughridge spoke of IBM's recent acquisition of SoftLayer. "Last week we closed the acquisition of SoftLayer Technologies, the world's largest privately held cloud computing infrastructure provider," he said. "As businesses add public cloud capabilities to their on-premise IT systems, they need enterprise-grade reliability, security and management. IBM has built a portfolio of high-value private, public and hybrid cloud offerings. With SoftLayer, IBM will accelerate the build-out of our public cloud infrastructure to give clients the broadest choice of cloud offerings to drive business innovation."

In June, IBM announced an agreement to acquire SoftLayer in a deal reported to be worth around $2 billion. Big Blue announced the close of the acquisition on July 8.

IBM's new cloud services division combines SoftLayer with IBM SmartCloud into a global platform. The new division, led by general manager James Comfort will provide a broad range of choices to both IBM and SoftLayer clients, ISVs, and channel and technology partners.

"Cloud computing provides a profound and transformative change in business and government," Comfort said in a statement. "With SoftLayer in IBM's portfolio, it will be easier and faster for organizations to adopt game-changing cloud services."

SoftLayer joins the more than a dozen strategic cloud acquisitions IBM has made since 2007 designed to accelerate its cloud initiatives.

IBM said its cloud revenue grew by 80 percent in 2012. Moreover, IBM officials said the company expects to reach $7 billion annually in cloud revenue by the end of 2015. Big Blue is committed to driving open cloud standards and is a key backer of the OpenStack open cloud platform.