In A Curious Move, IBM Acquires A Startup Called Cloudant


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IBM CEO Ginni Rometty

In an interesting and fairly brilliant competitive move, IBM has bought a startup called Cloudant for an undisclosed sum.


Cloudant was founded by three MIT physicists who invented a cloud computing database while working on one of the world's greatest mysteries: the search for the God particle.

After the particle was found, the physicists discovered that their database, which helps thousands of scientists share data, was the stuff of a great startup. They were accepted in the Y Combinator program and launched Cloudant in 2008. The trio raised $16 million in venture funds along the way, hiring about 60 people and signing over 2,500 customers, including some huge ones like Samsung, Adobe and Nokia.

But here's the curious part: One of the investors in Cloudant's biggest and most recent $12 million round last May was Rackspace. That's one of IBM's biggest cloud computing competitors. It's curious that Rackspace didn't buy Cloudant for itself.

Cloudant co-founders


Cloudant cofounders Mike Miller (left) and Alan Hoffman.

On top of that, Cloudant uses a database technology that competes with the one that IBM is trying to get people to use.


Specifically, Cloudant's main product is something called a database-as-a-service, meaning that companies can rent the database hosted on a cloud provider like Amazon, Rackspace or IBM's SoftLayer, paying for it on a monthly bases.

It's a type of database called noSQL, which is a popular tech for Internet apps and mobile apps.

Cloudant was built using a noSQL database called CouchDB. But IBM has also thrown its weight behind a competing noSQL database called MongoDB. IBM is trying to help MongoDB become the most popular noSQL database used by mobile app developers.

So, with one fell swoop, IBM is no on both sides of the fight: It has backed MongoDB and it now owns a popular startup backed by a rival company that uses a rival technology. That gives lets it benefit from customers who use both cloud computing services.

Plus, IBM is moving in during a sensitive time for Rackspace, which is searching for a new CEO. Former CEO Lanham Napier retired unexpectedly earlier this month after posting a quarter that showed Rackspace was struggling to grow its all-important cloud computing business.


Disclosure: Business Insider founder Kevin Ryan is also co-founder of MongoDB.