Soft Layer and The Planet to merge

Soft Layer and The Planet are two major data centers in the US where were host some of our servers. This morning we got a notification from the CEO of Soft Layer, Lance Crosby, that both the companies are merging and the merger will be completed before the end of the year.  Also got a mail from CEO of ThePlanet, Douglas Erwin (full text of his mail given below).

While Soft Layer has been quite good in providing their Virtual Private Racks to us, we have made use of The Planet’s huge bandwidth allocations. Also, since Soft Layer and The Planet have been major competitors in the past few years, we were able to get the best out of both.

Now with this merger, while it is definitely going to bring it good benefits, it makes it mandatory for us to look for an alternative provider as a backup, to avoid single point of failure. This reminds me of the situation a few years ago, when we were hosting with EV1 and The Planet, and both the companies merged. It was at that time that we identified Soft Layer and added a few servers with them. Now it is time to look out for similar providers and see what we come up with. We have already been in discussions with providers like Rackspace, DedicatedNow, etc, on other topics such as colocated servers, etc, but this news definitely will prompt us to speed up these discussions.

We will keep tracking this merger closely as it unfolds, and at the same time will come back with the alternate options that we identify and come up with.

Both mail contents below:

From CEO of Soft Layer

Greetings again, from all of us at SoftLayer.

Once more, I have some exciting news to share with you.

It’s been a busy time for us with the creation of our new capital structure, through which our management team and GI Partners has acquired all equity in the company.

For those who are not aware, GI also owns a large stake in The Planet, and I now have the pleasure of telling you that we are in discussions to merge The Planet with SoftLayer. The goal is for the transaction to be complete in the fourth quarter of this year.

I know you have a lot of questions. To be perfectly honest, we are at the beginning of this and don’t have all the answers. Teams at both companies have just begun discussing how to integrate our organizations, and their work will yield the details we don’t yet know.

For customers, nothing is changing in the near term. Both companies still operate independently, and your products, services, support, and contacts are the same today as they were yesterday. For now, each company continues to be led by its current management team. Pending completion of the merger, I will have the privilege of becoming CEO of the merged company.

As I hope you have seen in recent days, we will provide as much information as possible as our discussions with The Planet progress. But for now, I want to share some of the most important information: the reason why.

SoftLayer and The Planet have a lot in common: solid customer bases, broad product and service lines, a high level of commitment to the cloud, and more. We also have different strengths – The Planet provides different services, such as collocation, on a large scale, and SoftLayer leverages automation expertise to deliver innovative solutions. Together, we can provide customers greater value through a wider continuum of services and the most scalable, automated, and cost-effective global infrastructure.

On a very personal note, there is nothing in my life I’m more proud of than SoftLayer. We might be all about automation, but my friends and I have built this company, quite literally, by hand. It’s our life, not just our livelihoods. And we’ve been in this industry quite a while and have seen a lot of changes. We wouldn’t pursue this opportunity if we had anything but confidence in its success and a clear vision for bringing its advantages to customers and stakeholders. If you have any questions or concerns, I invite you to talk to your individual SoftLayer contact or directly to George Karidis, our Chief Strategy Officer, at gkaridis@softlayer.com.

Three bars for life,
Lance Crosby

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From CEO of The Planet

Dear Customer,

It’s no surprise to you that the hosting market has grown substantially over the past few years, coming into its own. With the industry growth, coupled with the downturn in the economy, you’ve seen a number of equity investors enter the market.
They are armed with cash and ready to participate in the next big wave of opportunity by supporting companies with their growth plans. At the same time, we’ve
seen a number of consolidations in business, of which there are two kinds:  those designed to protect a shrinking industry; or others, as you’ve seen in our industry,
which represent opportunities for scale and growth. It’s a far cry from the days after the dotcom bubble, when investors became disillusioned with lost assets.
Today, we’re seeing financial stability in hosting  companies, and investors are again ready to put their money into new investments and support improved product and service offerings.

It’s for this reason I’m writing to share some great news about our business. GI Partners, the private equity firm that owns The Planet, has made a number of investments in our industry, including The Telx Group and ViaWest. They have announced their purchase of SoftLayer, and in turn we have entered into discussions to join forces with SoftLayer to create a new company.

From where I sit, this looks like an incredible opportunity for our customers with even better resources and financial viability. It would double the size of our already powerful network. We would have geographically dispersed data centers with operations not only in Texas, but also in Seattle, Washington and London. With additional capital, we would have opportunities to create an expanded international footprint for our data centers and operations. The automation capabilities would
make it even easier for you to do business with us. In short, there’s unparalleled opportunity.

We know your greatest concern is what this means for you. I can assure you that we are committed to providing you with great service. Over the next three months, we
will be working together with SoftLayer on integration plans. Our focus is all about you and how we will deliver more value, better service and ultimately move closer to
delivering a new standard of customer service for this industry. Our consolidation is about growth and the value we’ll be able to deliver to you and your business.

SoftLayer CEO Lance Crosby would lead the new company. He has done a great job in his leadership role with SoftLayer and comes from this industry. Lance and I are
working side-by-side during these discussions, and he knows and understands what our customers need.

We will keep you updated on our plans as they progress. Our goal would be to close the transaction during the fourth quarter.  In the meantime, you have my  commitment that we’ll continue to provide the same products and services you’ve always counted on from The Planet. We appreciate your confidence and continued support.

Sincerely,

Douglas J. Erwin
Chairman and CEO

2 thoughts on “Soft Layer and The Planet to merge

  1. admin Post author

    I fully agree Alan. We love their customer service and the level of automation they have accomplished so far.

    Lets see how it goes!

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