Samsung to acquire Joyent to expand software and services business

Samsung said it will acquire the U.S. cloud services company Joyent as it continues to expand beyond its hardware business into the broader world of software and services. Terms of the deal were not disclosed.

"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. 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," said Injong Rhee, Samsung's CTO of mobile communications, in a prepared statement.

Joyent will become part of Samsung's mobile business, although it will maintain its brand and will operate as a standalone company, Samsung said. Joyent CEO Scott Hammond, CTO Bryan Cantrill and VP of Product Bill Fine will join Samsung "to work on company-wide cloud initiatives," the companies said.

The move underscores Samsung's ongoing effort to expand into software and services as profit margins in mobile hardware continue to winnow. Reuters reported last December that the company has struggled to "overcome its dominant engineering culture," and Samsung co-CEO Kwon Oh Hyun conceded in January that that company needed to "compete in a new way that we've never experienced" in the past.

Samsung remains the world's No. 1 smartphone vendor, and it recently posted the fastest quarterly profit growth in its mobile business in nearly three years, thanks in part to the success of its hit Galaxy S7 handsets. But like some of its competitors, Samsung is looking to mobile software and services as worldwide growth in smartphone sales slow.

Meanwhile, Joyent's Hammond said the deal will give his business the scale it needs to continue to compete in the exploding cloud-computing market.

"As a result of this acquisition, Samsung will become an anchor tenant for Joyent's Triton and Manta solutions, and will help fuel the growth of our team and the expansion of our worldwide data center footprint," Hammond wrote on Joyent's blog. "This acquisition, though, is about more than just adding financial muscle and scale. Joyent and Samsung share a culture of innovation and technical excellence, and bring together a set of highly complementary cloud, big data, mobile and IoT technologies. By bringing these two companies together we are creating the opportunity to develop and bring to market vertically integrated mobile and IoT services and solutions that deliver extraordinary simplicity and value to our customers. This will accelerate the speed of innovation for both companies in high growth market segments."

For more:
- see this Samsung press release
- read this Joyent blog post
- read this Wall Street Journal report

Related articles:
Samsung's new mobile chief, D.J. Koh, seen refocusing on software and services
Report: Samsung struggles to overcome hardware-first mindset in mobile
Report: Samsung Galaxy S7 to get pressure-sensitive display and new high-speed charging port
Samsung thrives as LG and Sony founder in brutal Q1 in global smartphone market

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