IBM acquires container services provider BoxBoat

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IBM today announced that it has acquired BoxBoat Technologies, a Bethesda, Maryland-based DevOps consultancy and enterprise Kubernetes service provider. The move, which comes the same week former Red Hat CEO Jim Whitehurst stepped down as president at IBM, will extend IBM’s container and data portfolio to advance the company’s hybrid cloud practice, IBM SVP John Granger said in a statement.

“Our clients require a cloud architecture that allows them to operate across a traditional IT environment, private cloud, and public clouds. That’s at the heart of our hybrid cloud approach,” Granger said. “No cloud modernization project can succeed without a containerization strategy, and BoxBoat is at the forefront of container services innovation.”

Founded in 2016, BoxBoat helps clients establish containers and Kubernetes — an orchestration system for app deployment — as enablers for hybrid cloud solutions. The startup delivers services including strategies for Kubernetes and enterprise container adoption, as well as app containerization, DevSecOps, training, enablement, and guides on DevOps tooling and workflows.

BoxBoat’s customers span the Fortune 100 and government agencies, and the company counts among its partners Amazon Web Services, Microsoft Azure, and Google Cloud Platform. It also has the distinction of being the first certified professional services partner with GitLab, according to BoxBoat CEO Tim Hohman.

Hohman says that BoxBoat will join IBM Global Business Services’ (GBS) Hybrid Cloud Services division. The transaction is expected to close this fiscal quarter, subject to customary closing conditions.

“We founded BoxBoat on the idea that containers and DevOps would become an industry standard with the potential to transform enterprise IT with lightning fast application deployment workflows,” Hohman said in a press release. “Joining IBM will allow us to realize a shared vision of helping clients innovate by successfully deploying container-based applications on-premises and to the cloud.”

A growing market

Containers and Kubernetes are two of the leading drivers of enterprise digital transformation. By 2025, it’s anticipated that more than 85% of global organizations will be running containerized apps in production, a significant increase from fewer than 35% in 2019.  At the same time, Kubernetes is becoming the preferred way to build digital services. StackRox found that 91% of organizations are leveraging Kubernetes to orchestrate containers, while 75%  of organizations are actively using Kubernetes in production.

Since Arvind Krishna took over as IBM chairman last year, he’s spearheaded a remaking of the company, focusing on revenue growth and investing in cloud and AI technologies. Over the past five quarters, IBM spent over $1.7 billion on 11 acquisitions — a strategy that’s paid dividends. For every dollar of platform spend, clients spend $3 to $5 in software and $6 to $8 in services, according to IBM.

IBM’s GBS is a profitable enterprise, with approximately $6 billion revenue in the cloud consulting services market in 2020. In the first quarter of 2021, GBS doubled the number of Red Hat client engagements from the prior year to over 150. And to date, IBM says it’s signed $2 billion of business from its Red Hat practice.

The BoxBoat purchase caps off a wave of IBM IT service deals dating back to 2020. In April, IBM bought Taos, a provider of managed and professional IT services with a focus on public cloud computing platforms. And late last year, IBM snatched up three IT service providers, including Nordcloud, a platform for cloud computing services expertise.

The global public cloud computing market is set to exceed $362 billion in 2022, according to Statista.  IDG reports that the average cloud budget is up from $1.62 million in 2016 to a whopping $2.2 million today. Coinciding with this, the app container market is anticipated to reach $8.5 billion in 2025, up from $950 million in 2018.

Business leaders across the C-suite indeed see the cloud‘s role in helping to achieve their company’s revenue growth ambitions. But few organizations are positioned for the cloud to fully deliver on its promise, highlighting the need for consultancies. According to research firm PricewaterhouseCoopers (PwC), more than half (53%) of companies aren’t realizing substantial value from cloud investments. That’s despite the fact that 56% view the cloud as a platform for innovation and expansion.

“Without question, we find ourselves in the midst of an accelerated cloud sea-change on the heels of a pandemic, which brought a new awareness that any position of strength can be fragile, and organizations that operate with a greater degree of resiliency and agility can thrive in the future. Our recently conducted [survey] confirmed this,” PwC U.S. deputy advisory leader Jenny Koehler told VentureBeat in a recent interview. “Some of the greatest areas of promise include improved resiliency and agility, improved decision making given enhanced data and analytical capabilities, and the ability to innovate products and services. Despite this widespread adoption, however, there is a substantial value gap that persists.”

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