Samsung enters the cloud market

Mega M&A week continues as mobile kingpin scoops up Joyent

20160427 samsung developer conference sdc sign

At its 2016 developer conference in San Francisco this week, the company worked to get developers excited about its software and services as well as its hardware platforms.

Credit: Stephen Lawson

For years those who track the cloud computing market have predicted consolidation. The market is young enough, promising enough, and the barriers to entry for companies that want a slice of this market are high enough that mergers and acquisitions are to be expected.

20160427 samsung developer conference sdc sign Stephen Lawson

At its 2016 developer conference in San Francisco this week, the company worked to get developers excited about its software and services as well as its hardware platforms.

Today, electronics, appliance, TV, tablet and smartphone heavyweight Samsung bought IaaS cloud computing provider Joyent. The move immediately puts Samsung into the competitive IaaS cloud market while simultaneously boosting the mid-sized provider Joyent’s potential go-to-market scale.

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Samsung has come to realize that it needs a cloud. Building one is difficult and expensive. In an interview with ZD Net, Samsung CTO Injong Rhee said the South Korean company wants to expand the functionality of services its able to provide to customers outside of devices they sell. The cloud is the natural answer. In buying Joyent, Samsung is buying a proven cloud platform that works out of the box and is ready for use.

The acquisition by Samsung comes as its chief rival, Apple, is also reportedly developing new capabilities for its iCloud. The Information reports that those efforts have been stymied by political infighting within the company, however.

For Joyent, the company gets a cash infusion to help it grow. “Until today, we lacked one thing,” says Joyent CEO Scott Hammond in a blog post. “We lacked the scale required to compete effectively in the large, rapidly growing and fiercely competitive cloud computing market. Now, that changes.” Joyent is perceived by those who track the cloud market as a technically-savvy and proven vendor. It’s also one of the smaller providers in a market dominated by big names such as Amazon Web Services, Microsoft, Google, IBM, Rackspace and others.

Moves like this are not unprecedented. CenturyLink bought IaaS vendor Savvis, and later Tier 3 to build out IaaS capacity and cloud smarts. Verizon bought Terremark; IBM bought SoftLayer.

Stay tuned to see what exactly how Samsung’s devices evolve now they have a powerful cloud back-end at their disposal. And watch out to see if Joyent takes a step up in the cloud market, flush with a new investment and vote of confidence.

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