Kyndryl, a New York-based IT infrastructure services company, recently acquired Skytap, a Seattle-based company specializing in cloud migration software that helps companies run traditional on-premise systems in the cloud. The terms of the deal were not disclosed, but Skytap’s customers include big names like Honeywell, CA Technologies, and Okta. Skytap had previously raised $18 million from Vistara Growth in October, with investments from Goldman Sachs, Madrona, Ignition Partners, and Jeff Bezos. Bradley Schick, the CEO of Skytap, took over in 2019 after founding Wegos, a web application startup.
Kyndryl, which split from IBM in 2021, sees the acquisition of Skytap as a boost to its hybrid cloud services portfolio. With Skytap having around 70 employees in the Seattle area, there are questions about the impact on the workforce, but details have not been provided. Interestingly, Kyndryl reported revenue of $3.8 billion for its most recent quarter, which exceeded analyst expectations despite a 10% year-over-year decrease. The company also reduced its losses significantly from the previous year, resulting in a nearly 30% increase in its shares.
In addition to the acquisition of Skytap, Kyndryl also announced its decision to divest its transaction processing platform for the securities brokerage industry in Canada, known as Securities Industry Services (SIS). This move suggests a strategic shift in focus for Kyndryl, as they aim to strengthen their presence in the hybrid cloud services market. By shedding some of its existing assets and acquiring companies like Skytap, Kyndryl is positioning itself to compete more effectively in the rapidly growing cloud computing industry.
The acquisition of Skytap by Kyndryl reflects the ongoing trend of consolidation within the cloud computing sector as companies look to expand their offerings and enhance their capabilities. With Skytap’s expertise in cloud migration software and Kyndryl’s focus on hybrid cloud services, the two companies are expected to complement each other well. This acquisition could potentially benefit both companies by allowing them to leverage their respective strengths to provide more comprehensive solutions to their customers.
As the cloud computing market continues to evolve, companies like Kyndryl are seeking to stay competitive by adapting to changing trends and customer demands. By acquiring Skytap and divesting underperforming assets like the Securities Industry Services platform, Kyndryl is demonstrating its commitment to innovation and growth. This strategic move is likely to position Kyndryl as a key player in the evolving cloud computing landscape, allowing them to better serve their customers and drive business success in the digital era.
Overall, the acquisition of Skytap by Kyndryl represents a significant development in the cloud computing industry, with potential implications for both companies and their customers. By combining their strengths and resources, Kyndryl and Skytap have the opportunity to enhance their capabilities and expand their market presence. As the demand for cloud services continues to grow, companies like Kyndryl are making strategic moves to position themselves for long-term success in a competitive and dynamic industry.
