Samsung buys Joyent to kick off $1.2 billion investment in U.S.

Samsung is pumping up its cloud-based capabilities with the acquisition of San Francisco-based Joyent for an undisclosed amount.

Information Week reports that Joyent’s private and public cloud computing services will support the South Korean electronics giant’s Internet of Things (IoT), mobile and cloud-based lines of business.

“Samsung evaluated a wide range of potential companies in the public and private cloud infrastructure space with a focus on leading-edge scalable technology and talent,” said Samsung Electronics CTO of Mobile Communications Injong Rhee in a press statement. “In Joyent, we saw an experienced management team with deep domain expertise and a robust cloud technology validated by some of the largest Fortune 500 customers,”

“As one of the world’s largest consumers of public cloud data and storage, Samsung will immediately benefit from having direct access to Joyent’s technology, leadership and talent,” the media release added.

Samsung was already one of the largest clients of Joyent, which developed open-source cloud management software Triton and object storage service Manta.

“For our existing public cloud and private data center customers, adding scale, financial muscle, and Samsung as both a partner for innovation and as a large anchor tenant customer for Triton and Manta, will pay big dividends,” said Scott Hammond, Joyent CEO. “Our Triton business is doubling every quarter and our Manta solution is the foundation for many of our customers’ most strategic applications.”

Samsung heads already in cloud?

Yesterday, the South Korean tech powerhouse unveiled plans to invest $1.2 billion in the U.S. market, specifically around IoT.

“We think there’s still a lot to do in this area,” said Young Sohn, president and chief strategy officer of Samsung Electronics, of the announcement.

Samsung dove into the business of IoT services in April with the introduction of Artik Cloud. However, that project relied on Amazon Web Services infrastructure to run. Now with Joyent as part of its company, Samsung gets in-house expertise and technology to manage and provide its own cloud-based infrastructure.

And as Samsung is a global leader in electronic hardware, it is expected to continue producing connected devices that will increasingly rely on these type of cloud-based services.

Samsung’s acquisition of Joyent also creates synergies with its 2014 buyout of SmartThings, a seller of IoT devices and services.

IoT revenues up 15%; cloud computing a big driver

A new report shows healthy revenues for 21 benchmarked Internet of Things (IoT) companies in the last quarter of 2015, with revenue growing by almost 15% to levels approaching $7 billion. Cloud computing and IT infrastructure are especially potent drivers of IoT revenues, as vendors help companies cope with ever increasing rivers of data.

In a press release Technology Business Research (TBR) reported that commercial IoT opportunities drove year-over-year growth in the fourth quarter by 14.8% among the 21 companies it tracks in its regular Commercial IoT Benchmark report. Total revenues for the quarter were $6.7 billion among benchmarked vendors that include Verizon, Microsoft, Intel, Google, Amazon, Siemens, Cisco, Ericsson and Oracle.

See also: Hackers drive huge growth in IoT security market

“Effectively, every type of IT and operational technology (OT) vendor will have a stake in the growing commercial IoT market, as IoT solutions will drive increased use of diverse IT and OT products and services,” said Dan Callahan, a TBR analyst specializing in devices and IoT.

TBR says revenue growth is being driven by a rise in go-to-market refreshes by top vendors who are striving to become known as early leaders in the commercial IoT space.

“In addition to building interest in established IT products, commercial IoT will create growth in specialized business consulting, hardware, network, development, management and security components,” said Callahan. “IT and OT vendors that are quick to capture IoT opportunities within their current customer base, and attract new ones through developer programs and investing in growing mindshare, will enjoy additional, immediate, revenue opportunities.”

Revenues driven by explosive growth in data management needs

TBR’s report showed vendors are looking to become early IoT leaders in order to drive profits in this emerging industry. Vendors who take an early IoT leadership position are benefiting because there is less competition, customers have limited outsourcing options due to early IoT’s security challenges, and clients require custom solutions due to the lack of technology standards.

Cloud computing services posted the highest year-over-year revenue growth rate of 79% to record $604 million in the quarter. This growth is being propelled by the vastly increasing need being created for platforms to process and store data.

TSR also noted strong growth in IT services and ICT infrastructure, which charted a 51.4% growth rate in revenue for the quarter. This subsector is benefiting from the increasing capacity requirements created by the huge streams of IoT data that is being generated, as more companies struggle to tame the growing flood of information into actionable insights.