Two of the industry"s largest providers of dedicated servers and hosting services have entered into talks regarding a possible merger. If completed, the merger would make Softlayer CEO Lance Crosby the CEO of the combined company, which would own close to 80,000 dedicated servers. This, in turn, would make them the second largest competitor in the web hosting industry, behind Rackspace and closely tailed by 1&1 Internet, who in a recent survey, were believed to control around 70,000 dedicated servers. The Planet CEO Doug Erwin is expected to step down once the merger is completed.
This merger is particularly interesting as the ten founders of Softlayer all came from posts at The Planet before starting the company, and between them, put in place the majority of the systems that are still in operation at The Planet today. This unique insider knowledge will undoubtedly make the integration of the two companies a very smooth process.
The Planet currently operates five data centers in the United States (2 in Houston and 3 in Dallas) and one in the UK, while Softlayer has three (Washington DC, Seattle and Dallas) and are soon to be bringing a fourth online at their new HQ in Dallas, which they moved into the end of July. Future expansion plans include a further data center on the west coast of the United States, and a facility in Europe.
The merger talks come after an investment in Softlayer by private equity firm GI Partners, who also own a large stake in The Planet. Whilst talks are currently in the early phases, they are expected to conclude by the end of this year.
Lance Crosby has assured Softlayer customers that in the short term, both companies will continue to operate independently with no changes to the products, services, or support they receive.
The two companies, both major players in the dedicated server market, have different strengths. The Planet provides services such as large-scale co-location, whilst Softlayer specializes in systems automation expertise to deliver innovative services and solutions, such as their fully-featured portal and API, allowing customers an unparalleled level of control.