Computing giant IBM buys up Israeli start-up Cloudigo

An IBM executive said that acquiring Cloudigo would help with the company’s efforts to quicken database processing.

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September 25, 2017 17:36
2 minute read.
An IBM chips are seen in Kiev, Ukraine April 21, 2016.

An IBM chips are seen in Kiev, Ukraine April 21, 2016. . (photo credit: GLEB GARANICH / REUTERS)

 
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American computer hardware behemoth IBM Watson is buying Israeli start-up Cloudigo, its founder said on LinkedIn over Rosh Hashana weekend.

It remains undisclosed how much IBM paid for the Israeli data center company, but it is likely to be a multimillion- dollar transaction given the hubbub around the announcement.

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Neither Cloudigo founder Eran Gampel nor an IBM spokesman would comment on when the deal will be finalized.

Cloudigo offers network infrastructure support for handling user traffic online.

The company’s team of Israeli experts will now become part of IBM’s cloud innovation lab and cloud infrastructure group, and its employees are set to be at the cutting edge of how data is communicated efficiently and quickly. Cloud computing is the practice of using remote Internet servers in a network – rather than relying on centralized physical infrastructure – to store and process data.

After news of the merger leaked out, Cloudigo’s website was replaced with a banner announcing IBM’s purchase of the company. Little to no information about Cloudigo, which was founded in 2016, can be found online.

The purchase of another Israeli start-up by a multinational company points to the country’s success in hi-tech, although some experts worry that Israeli start-up founders are too eager to “exit” and make a quick buck.

Such premature enthusiasm can hamper a start-up’s innovation, as a small company is unencumbered by a large internationally based corporation with its bureaucracy and thousands of employees.

An IBM executive said that acquiring Cloudigo would help with the company’s efforts to quicken database processing.

“IBM acquired a high-performance team focused on advanced networking technology that moves the networking function from the server to the edge, increasing data center efficiency.


The Cloudigo Ltd. team brings talent and technology that closely aligns with IBM investments in advanced network processing, as part of its cloud platform,” wrote John Considine in a blog on the IBM website.

Company founder Eran Gampel touted the acquisition and said he was excited to begin working under the IBM umbrella. Gampel previously worked at Toga Networks, where he helped oversee its open-source software, and at Huawei, a Chinese telecommunications firm. He also cofounded the Canadian software firm Superna.

Based in the city of Givatayim, east of Tel Aviv, Cloudigo employs fewer than 10 workers, according to LinkedIn.

The employees will be relocated to IBM’s facilities, an IBM spokeswoman said.

IBM employs some 2,300 workers across Israel. Its local headquarters are in Petah Tikva, along with a Haifa research lab, laboratories in Givatayiim, Tel Aviv and Jerusalem, and its “Cyber Excellence Center” in Beersheba.

The company has operated in Israel since 1949.

IBM stands for the International Business Machines Corporation. The company is worth around $135 billion and is headquartered in New York.

Cloudigo’s chief technology officer Gal Sagie sounded enthusiastic about the news on LinkedIn: “Very excited to share that IBM has acquired Cloudigo.

We are joining an incredible team with an important mission to make networking infrastructure great in hyper scale. Looking forward to it!”

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