IBM today announced it has acquired Cast Iron Systems to broaden the delivery of cloud computing services for clients. Cast Iron Systems, a privately held company based in Mountain View, CA, delivers industry-leading cloud integration software, appliances and services. Financial terms were not disclosed. The acquisition expands IBM’s industry-leading business process and integration software portfolio, which grew more than 20 percent in the first quarter of 2010.
Cast Iron Systems has completed thousands of cloud integrations around the world for financial institutions, media and entertainment companies and retail organizations. The company’s clients include Allianz, NEC, Peet’s Coffee & Tea, Dow Jones, Schumacher Group, ShoreTel, Sports Authority, Time Warner, Westmont University and many others.
In today’s competitive global business environment, companies are recognizing the need to reduce complexity and cost in order to increase their business agility. To do so, many organizations are accessing key business applications through software as a service models and cloud deployments. IBM expects the global cloud computing market to grow at a compounded annual rate of 28 percent from $47 billion in 2008 to $126 billion by 2012.
A key challenge businesses face in successfully adopting cloud delivery models is integrating the disparate systems running in their data centers with new cloud based applications. In the past, this involved time-consuming and resource-draining coding work. Through Cast Iron Systems, IBM is gaining the ability to help businesses rapidly integrate their cloud-based applications and on-premise systems. The acquisition also advances IBM’s capabilities for a hybrid cloud model, which is attractive to enterprises because it allows them to blend data from on-premise applications with public and private cloud systems.
IBM is already known for the application integration capabilities it offers for both on-premise and business to business applications. With the addition of Cast Iron Systems to its portfolio, IBM will be able to offer clients a complete platform to integrate cloud applications from providers including Salesforce.com, Amazon, NetSuite and ADP with on-premise applications, such as SAP and JD Edwards. Using Cast Iron Systems’ hundreds of pre-built templates and services expertise, expensive custom coding can be eliminated, allowing cloud integrations to be completed in the space of days, rather than weeks or longer. These results can be achieved using a physical appliance, a virtual appliance or a cloud service.
“The integration challenges Cast Iron Systems is tackling are crucial to clients who are looking to adopt alternative delivery models to manage their businesses,” said Craig Hayman, general manager, IBM WebSphere. “The combination of IBM and Cast Iron Systems will make it easy for clients to integrate business applications, no matter where those applications reside. This will give clients greater agility and as a result, better business outcomes,” he said.
For example, Cast Iron Systems helped pharmaceutical distributor Amerisource Bergen Specialty Group connect Salesforce CRM with its on-premise corporate data warehouse. In doing so, the company has been able to give its customer service associates access to the accurate, real-time information they need to deliver the best possible customer experience while realizing annual cost savings of $250,000.
Similarly, Cast Iron Systems helped a division of Allianz, a global leader in corporate insurance, integrate Salesforce CRM with its on-premise underwriting applications to provide real-time visibility into contract renewals for its sales team and into key performance indicators for sales management. Allianz replaced labor intensive custom code with Cast Iron Systems’ integration solution, beating its own 30-day integration project deadline.
“Through IBM, we can bring Cast Iron Systems’ capabilities as the world’s leading provider of cloud integration software and services to a global customer set,” said Ken Comée, president and chief executive officer, Cast Iron Systems. “Companies around the world will now gain access to our technologies through IBM’s global reach and its vast network of partners. As part of IBM, we will be able to offer clients a broader set of software, services and hardware to support their cloud and other IT initiatives.”
Consistent with IBM’s software strategy, IBM will continue to support and enhance Cast Iron Systems’ technologies and clients while allowing them to take advantage of the broader IBM portfolio. Cast Iron Systems’ approximately 75 employees will be integrated into IBM.
The IBM Software Group has acquired more than 55 companies since 2003.