StrongLoop, a small company, with only 30 employees and about $8 million in venture funding, became IBM's latest subsidiary Thursday, after being bought out for an undisclosed sum.
At first glance, this seems like small potatoes. However, StrongLoop specializes in providing services and support for Node.js, a technology that enables developers to craft APIs to suit any need in the Java universe. And this made it a good fit for IBM's broad reach into the corporate market.
One question is, why sell to Big Blue?
"We thought long and hard about this," said Juan Carlos Soto, CEO of StrongLoop. The company has seen adoption of its technology at the grassroots level, but wanted to reach higher up in the corporate market to IT buyers who made corporate-wide buy decisions, he explained. "It's hard to get access to those folks."
Why did IBM buy?
Soto will be reporting to Wieck.
StrongLoop's Node.js product is now offered through IBM's Bluemix Platform-as-a-Service (PaaS). Strongloop offers a "robust implementation making Node.js enterprise-grade," Wieck said.
The Node.js framework allows a user to build APIs and scale them up. The technology is not new, as it has been proven by Yahoo, PayPal, and Netflix, Soto noted. What the market lacked was support and services for Node.js in an enterprise environment.
"This is what StrongLoop has been doing on a small scale for two-and-a-half years," Soto said. StrongLoop's services help the customer to define and implement an API strategy.
But there is also potential for greater usage in crafting solutions for mobile and the Internet of Things, Wieck pointed out.
[Read more about IBM's IoT investments.]
"Many of those are built on APIs and are now owned by the enterprise delivering the application," Wieck said. What results is an "API Economy," which IBM foresees becoming a $2.2 trillion market by 2018, Wieck added. Because a developer can "express things as APIs, new services can be built around them," Soto said.
IBM is in the middle of a massive turnaround effort, investing heavily in cloud computing and data analytics while hardware, software, and service revenues all decline.
To augment its investment in cloud and data analytics, IBM has been acquiring small companies with needed bits of technology to flesh out its product and service offerings in these new fields.
In general, IBM is looking to buy smaller companies that have complementary technology, such as StrongLoop. These companies offer IBM new routes to market or new technologies, Wieck explained. "There is no one blueprint for that." Prospects will either offer "adjacency or opportunity," she added.