With the news Friday, Loudcloud completes its transition from a managed services business to an enterprise software company focused on its Opsware IT automation technology. The transition brings Loudcloud co-founder Marc Andreessen, a former NetScape exec, back to his software roots.
Loudcloud, which launched in 1999, used the Opsware technology in its service business to manage applications and hardware automatically, rather than manually. The company says the software, which it is now licensing for use behind corporate firewalls, reduces operational costs and improves efficiencies.
Despite its automated approach, Loudcloud struggled along with the rest of the Web hosting sector as the economy sputtered and its original dot-com customer based disappeared. In June, Loudcloud announced that it was divesting itself of its services business. EDS agreed to acquire Loudcloud's 50 managed hosting customers for $63.5 million. The deal is closing early; it was slated to be completed next month.
In addition to bringing on the hosting customers, EDS also is hiring about 140 former Loudcloud employees. Further, EDS has agreed to a $52 million, three-year licensing agreement for the Opsware automation software and will begin deploying the technology to provide automated management of servers and hosted applications within its managed Web hosting business. Eventually, EDS plans to use the technology to service more than 50,000 servers in 14 data centers and 140 client-owned and regional data centers worldwide.
Loudcloud announced the enterprise version of its IT automation technology, Opsware System 3, in June and last month announced MetLife as a pilot customer.
The company's Nasdaq ticker symbol has changed from LDCL to OPSW.
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