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IBM To Acquire Spanugo

By Will Healy – Jun 16, 2020 at 11:53AM

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Spanugo expected to enhance IBM's public cloud capabilities to those operating in highly-regulated industries.

International Business Machines (IBM 2.27%) announced Monday that it will acquire the assets of Spanugo. Based in Santa Clara, Calfornia, Spanugo gives clients the capability to run workloads in the cloud, delivering both compliance and risk management while ensuring continuous cybersecurity.

This is IBM's first acquisition since CEO Arvind Krishna, the former head of IBM's cloud and cognitive services division, took the top job in April. IBM declined to disclose the terms of the agreement.

This deal should boost IBM's cloud capabilities. In a competitive market where the likes of Amazon and Microsoft have accumulated a significant market share, IBM continues to carve its niche in the cloud space. To stand out from competitors, IBM has targeted enterprise clients, especially those who not only deal with a burdensome regulatory environment but also want to benefit from cloud technology.

A cloud chip raised on a motherboard with blue light emanating from the bottom.

Image source: Getty Images

According to Howard Boville, senior VP of Cloud at IBM, "IBM is committed to building the industry's most secure and open public cloud for business. With the acquisition of Spanugo, we have taken another major step in advancing IBM's differentiated capabilities in security and compliance for our enterprise clients, including those in highly regulated industries."

Boville also stated that adding Spanugo's capabilities to the financial services public cloud would help to provide proof of ongoing compliance. This is critical, as last year Bank of America and IBM announced the first-ever public cloud designed for financial services.

The company also expects that, with the Spanugo assets added, it can hasten the availability of its security control center. This should help clients monitor compliance and manage compliance controls.

The cloud, which represents just over 30% of IBM's revenue, has become the fastest-growing part of IBM's business.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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