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IBM Acquires Cloud Computing Expert Firm, Taos To Boost Service Portfolio

International Business Machines Corp. (IBM) said Thursday announced entering into an agreement to acquire cloud-focused Taos Mountain LLC, an IT firm that helps companies shift software and data online. Terms of the transaction, expected to close this quarter, were not disclosed.

The deal marks the ninth acquisition since Arvind Krishna became IBM’s chief executive in April, spelling out the company’s focus on hybrid cloud and artificial intelligence, the company said.

Taos, founded in 1989, is a consulting firm that helps companies migrate their applications and data from in-house servers they manage to remote computing infrastructure, known as the cloud. IBM said Taos has helped clients including Target Corp., Netflix Inc., and Sephora migrate to and manage their cloud environments.

Taos has partnerships with major cloud providers–Amazon.com Inc.’s Amazon Web Services, Alphabet Inc.’s Google Cloud Platform, and Microsoft Corp.’s Azure, according to IBM.

Adding Taos, IBM said, would further its cloud migration and transformation capabilities, which it touted is an important aspect of its hybrid cloud platform growth strategy.

“Taos adds the deep expertise, public cloud partnerships, and innovative solutions needed to drive growth and adoption of IBM’s hybrid cloud platform throughout the Americas,” Senior Vice President of the company’s cloud application innovation business, as well as IBM Global Business Services chief operating officer, John Granger, said.

Granger emphasised that IBM already had similar consulting services, but acquired Taos partly because of the strength of Taos’s partnerships with major public cloud service providers, and that Taos brings technical expertise with respect to data center migration and platform engineering.

“It’s really that combination of those skills with these very strong partnerships,” Mr. Granger said. He later added: “We have some capability in this space, but these are, for us in Global Business Services, a significant strengthening of our capability in this space with these cloud providers.”

Taos has nearly 600 employees in the U.S. and Canada, IBM said. Privately held Taos is a majority-owned portfolio company of Bunker Hill Capital. Bunker Hill, with offices in Boston and San Diego, invests in lower-middle market companies with revenues between $5 million and $100 million, according to its website.

Following the acquisition Taos will operate as an independent business unit “for the next couple of years,” Mr. Granger said, and integrate it with IBM’s offerings over time. Taos CEO Hamilton Yu will remain with the company, he added.

At IBM, Mr. Krishna has been trying to boost company growth partly through a greater focus on hybrid cloud computing. In that vision, thousands of companies will migrate to the cloud in the coming years, but they will keep some equipment in-house. They also are expected to use multiple cloud providers and data centers, creating opportunities for IBM to manage the complexities of that setup.

AI is also a major focus for IBM, as it envisions companies will strive to make their business processes and workflows more intelligent. “It’s not the journey to the cloud that matters; it’s what you do when you get there,” Mr. Granger iterated. “And what you do when you get there is the business transformation services.”

IBM announced acquisitions of several firms to help meet those ambitions. It announced in November its acquisition of Instana, a Chicago-based software company that helps clients use AI to manage and automate their cloud applications. IBM also announced it was acquiring Helsinki-based Nordcloud, which has similar capabilities as Taos, in December.

The acquisitions follow IBM’s move last fall to spin off a large part of its managed services business into a separate company.

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