IBM Continues To Buy Up Cloud Expertise as Server Sales Continue to Plummet

As Yogi Berra once said “It’s like déjà vu all over again.”

To continue to bolster its cloud services, IBM yet again this past week said it acquired Cloudant, a provider of distributed cloud database platform for application developers. The move comes just two months after IBM said it entered into an agreement to buy Aspera, a provider of technology that advances the transfer of large files to securely speed the movement of massive data files.

IBM has made it crystal clear that intends to be a major player in the cloud computing environment and is backing it up with an aggressive acquisition strategy. Cloudant is considered a startup cloud database company but already has a top-tier customer base including Microsoft (MSFT), Samsung, Adobe (ADBE) and Fidelity.

The terms of the deal were not disclosed, but in the same breath IBM promised to invest another $1 billion to pump up its cloud software offerings. Just last month, again, IBM said it would spend $1.2 billion to build 15 new data centers for its SoftLayer cloud server arm. Here is where things get a bit sticky: SoftLayer’s main competitor is Rackspace (RAX), and Rackspace owns part of Cloudant.

In any event, IBM is serious about bolstering its cloud capabilities at a time when its traditional server sales continue to plummet. Solution providers are embracing these moves as they, too, are looking to get out of the lower margin businesses and push further into cloud services.

Following the Cloudant acquisition announcement, IDC came out with its fourth-quarter server sales research and the news was not good, specifically for IBM. Enterprise server sales continue to be under tremendous pressure as cheaper, white-label servers gain ground, according to the research firm.

Global server sales for the fourth quarter declined 4.4 percent from the year-earlier period, according to IDC. This is steeper than the 3.7 percent drop from the third quarter of 2013 vs. the third quarter of 2012. Similarly, Gartner has worldwide server sales dropping 4.5 percent for the fourth quarter of 2013.

While the worldwide server numbers are bad, IBM seems to be falling faster than its rivals. According to IDC, IBM saw its share drop 910 basis points to 26.8 percent for the fourth quarter, which traditionally has been a strong quarter for the company. By comparison, both market leader HP and Dell experienced a slight rise in basis points and market share.

IBM sees the writing on the wall and is doing something about it.

Knock ’em alive!