Kyndryl, a New York-based IT infrastructure services giant, announced its acquisition of Seattle-based company Skytap, which specializes in cloud migration software. The terms of the deal were not disclosed. Skytap helps companies transition traditional on-premise systems, such as IBM Power, to cloud platforms like Microsoft Azure or IBM Cloud. Some of Skytap’s customers include Honeywell, CA Technologies, and Okta. Previously, Skytap raised $18 million from Vistara Growth in October, with backing from investors like Goldman Sachs, Madrona, Ignition Partners, and Amazon founder Jeff Bezos.
Bradley Schick, the CEO of Skytap, has been leading the company since 2019. He previously founded Wegos, a web application startup. The acquisition by Kyndryl raises questions about the impact on Skytap’s workforce, which currently consists of around 70 employees in the Seattle area, according to LinkedIn. Kyndryl, which spun off from IBM in 2021, stated that the acquisition of Skytap will enhance its hybrid cloud services portfolio. Kyndryl recently reported revenue of $3.8 billion for its most recent quarter, a 10% decrease from the previous year but exceeding analyst expectations. The company also saw a significant reduction in losses compared to the year-ago period, resulting in a nearly 30% increase in shares.
In addition to the acquisition of Skytap, Kyndryl also announced its agreement to divest its transaction processing platform for the securities brokerage industry in Canada, known as Securities Industry Services (SIS). This move signifies Kyndryl’s strategic efforts to reshape its business portfolio and focus on core areas of growth in the IT infrastructure services market. The divestment of SIS, along with the acquisition of Skytap, are part of Kyndryl’s overall business strategy to strengthen its position in the hybrid cloud services sector and drive innovation to meet the evolving needs of its customers.
The acquisition of Skytap by Kyndryl reflects the ongoing consolidation within the IT infrastructure services industry as companies seek to expand their offerings and capabilities to meet the growing demand for cloud solutions. Skytap’s expertise in cloud migration software complements Kyndryl’s hybrid cloud services portfolio, enabling the combined entity to provide more comprehensive solutions to customers looking to modernize their IT infrastructure and transition to the cloud. This acquisition also positions Kyndryl as a key player in the evolving cloud services market, enhancing its competitive edge and market positioning in the rapidly changing landscape of IT services.
As Kyndryl continues to evolve its business strategy and navigate market dynamics, the acquisition of Skytap represents a strategic decision to enhance its capabilities and drive growth in key segments of the IT infrastructure services market. By integrating Skytap’s cloud migration software into its portfolio, Kyndryl is well-positioned to capitalize on the increasing demand for hybrid cloud solutions and provide innovative offerings to meet the evolving needs of its customers. This acquisition signals Kyndryl’s commitment to driving technology innovation, expanding its market reach, and maintaining a competitive advantage in the competitive IT services industry.
