Cheap at twice the price.
Given that valuations are often over 100 times funding, it looks like IBM got it cheap from someone wanting so sell.
IBM has revealed it shelled out $1.309bn for Cleversafe and its object storage software in October last year. This tidy cash sum, almost 10 times Cleversafe’s total of $135.4mn funding, was included in a 10-K document IBM filed with the SEC on Feb 23. That represents a lovely payout for Cleversafe’s investors. IDC reckons …
No, not exactly.
First Cleversafe does have customers and are profitable.
Cleversafe also has a compelling story. The ability to store data across data centers where you do not need to do a full replication to be secure. You can also run Hadoop on top of their FS which means that you could in theory store more data within a cluster thus reducing its footprint.
Not sure about the other startup.
Too bad the author gets stuck in the Sillycone math when it comes to valuations.
Dropping a billion dollars for something not worth one-tenth the list price, wow, there's some right fine financial management right there. I can see now why I am not management material. I'm sure that, if someone gave me a billion to splurge, I could do a lot better.
There's something to say about having too much money. Oh well, at least it'll be reinjected into the economy (via massive parties and large bowls of white powder that are totally legit, officer, promise).
This was an odd buy for IBM. IBM generally does not pay high multiples for start ups. I think IBM needed some sort of object story for their cloud, which is getting consistently beat by AWS and Microsoft, and Cleversafe was the best of the object start ups. More about cloud, less about storage.
Well, prior to acquiring Cleversafe, IBM did not have an OBS story to tell much less sell to customers. GPFS is not an object store, and IBM's messing around with Swift was not getting them anywhere. So IBM pulled out its checkbook and wrote a big one for Cleversafe. 10x funding is not an unreasonable payday for the people and investors at Cleversafe. You may recall that back in the day IBM paid $3B in cash for Lotus, which was one-third of their available cash. Another thing to consider about the Cleversafe acquisition is the 200+ patents obtained by Cleversafe, and the fact that the CIA is one of Cleversafe's customers and investors (through a CIA associated company). IBM has a long history as a trusted IT provider to federal agencies, so I'm sure the CIA is happy to see that IBM has their back when it comes to OBS.