Samsung has announced it is buying cloud-computing provider Joyent to support its push into software and services in the mobile and Internet of Things markets.
The South Korean technology giant generates the bulk of its revenues from sales of hardware, including mobile phones and other electronic appliances, but is trying to build up a services business as hardware products become increasingly commoditized.
Rivals such as Apple Inc. (Nasdaq: AAPL) have been able to retain customers and generate a recurring stream of revenues by offering access to music, games, video content and other applications.
The takeover of Silicon Valley-based Joyent Inc. , which competes against cloud-computing players including Amazon Web Services Inc. and Microsoft Corp. (Nasdaq: MSFT)'s Azure, will give Samsung Electronics Co. Ltd. (Korea: SEC) a cloud platform it can use to support various service offerings.
The terms of the deal were not disclosed, but Joyent is to function as a standalone unit within Samsung and reckons the takeover will give it the scale it needs to compete more effectively in the cloud-computing market.
Samsung will also become an anchor tenant for Triton, Joyent's containers-as-a-service technology, and Manta, its object storage solution.
"[Samsung] will help fuel the growth of our team and the expansion of our worldwide data center footprint," said Scott Hammond, Joyent's CEO, in a blog on the company's website.
Hammond says existing customers of Joyent will see "big dividends" as a result of the acquisition.
"We understand that our customers count on us to deliver a container-native platform that lets them innovate faster, and scales with their needs," said Hammond. "As an independent subsidiary of Samsung, we will continue to invest heavily in supporting our existing customers, and in continuing the fast-paced growth of our business."
Joyent claims its Triton business is doubling every quarter and that Manta has become the "foundation" for a lot of its customers' applications.
Earlier this year, Samsung was reported to have said it was on the lookout for software companies that could help it to reduce the focus on hardware in future.
Takeover moves by Samsung last year included the purchase of LoopPay, which develops mobile payment technology, while in 2014 the South Korean firm bought Internet of Things player SmartThings.
Sales at Samsung fell by 3% last year, to 200.65 trillion South Korean Won (US$171 billion), while net income dropped by 19%, to KRW19.06 trillion ($16.2 billion).
At its IT and mobile division, which accounted for more than half of sales, Samsung said it was trying to make improvements to its range of products amid growing competition.
— Iain Morris, , News Editor, Light Reading