Cloud Strategies

Samsung Buys Joyent in Cloud Push

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.

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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, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

TV Monitor 6/29/2016 | 4:54:00 PM
Re: Timing of this? kq4ym

"Seems we're not going to be sure just what's behind the acquisition."

Current president of Samsung's mobile division is a software guru who led Tizen and Samsung Pay development.
kq4ym 6/29/2016 | 4:18:24 PM
Re: Timing of this? It would seem to make sense that Joyent would help provide IoT support for Samsung but on the other hand they do say they're on "the lookout for software companies that could help it to reduce the focus on hardware in future." Seems we're not going to be sure just what's behind the acquisition.
Mitch Wagner 6/20/2016 | 7:58:30 PM
Re: Timing of this? Like Arsenio Hall used to say, "Things that make you go Hmmmm.... "

I'm not accustomed to thinking of IoT cloud as a separate entity from other varieties of cloud. Of course it is -- see, for example, Cisco's recent acquisition Jasper. 
webkinz12 6/19/2016 | 9:49:05 AM
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TV Monitor 6/16/2016 | 10:43:16 PM
Re: Timing of this? Mitch Wagner

It is IoT cloud that Samsung seeks to dominate, not business cloud.
TV Monitor 6/16/2016 | 10:29:02 PM
Samsung needs server side components for IoTivity framework The IoT standard being pushed by Samsung, the IoTivity, is cloud native and require a server-side cloud development framework to realize its full potential and to promote a rapid adoption of IoTivity by 3rd party developers. Joyent provides that server-side cloud framework and this is why Samsung's buying it.
Mitch Wagner 6/16/2016 | 4:45:03 PM
Re: Timing of this? Interesting to see whether Samsung wants to become a cloud provider -- competing with Amazon, Microsoft, or providing SaaS - or whether it wants to launch something to compete with iTunes/iCloud for consumers. So far, observers seem to be assuming the former but do we know?
danielcawrey 6/16/2016 | 4:38:49 PM
Re: Timing of this? Another case of a hardware company looking to diversify into software. I think the most relevant example of this outside of Samsung is Intel, which has moved into things like software security because of the margins there.

Samsung knows the direction of the software market, and Joyent was an obvious target in that regard. 
cnwedit 6/16/2016 | 8:36:18 AM
Re: Timing of this? There is certainly a lot to figure out for a hardware-focused company moving into the cloud - i.e, software - business, so sooner is always better. 

I am intrigued by the idea of "containers-as-a-service" and some of Joyent's other initiatives because it seems like a lot of folks are trying to figure out how to re-integrate the pieces once you have broken them all apart. 
[email protected] 6/16/2016 | 6:25:13 AM
Timing of this? I'd be interested to hear the views of other people but it seems positive for Samsung that it is making this move NOW rather than when it looks too late - it might be facing some challenges in its core business but that core business is still enormous, so it is thinking ahead and how it can grow its business portfolio.

Also interested to hear of any views on Joyent from those thathave interacted with it.
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