EDS tightens grip on UK gov with Loudcloud buy

Big savings

EDS is buying the web services business of Loudcloud for $63.5m. It's also paying $52.5m in license fees in its data centres over three years for use of Loudcloud's Opsware. In return it gains maybe $75m in revenues and 50 clients, of which the most prominent, certainly on these shores, is the UK government.

EDS currently has 40 per cent or so of the UK government's IT business by value, and Loudcloud, will be a smallish but lucrative string to its UK public sector bow.

In November, 2001, Loudcloud won the contract to host the Ukonline.gov web site. It is currently working on a new rev of the site which is widely expected to adopt Microsoft web technology.

EDS is taking on 140 Loudcloud staff from the US and the UK. It reckons that Loudcloud software will save it $100m over three years in managing web sites for clients. According to EDS, the market for web hosting is growing at 61 per cent compound a year, which is news to us. Here’s the press release.

Post acquisition, Loudcloud which will change its name to Opsware, and become a pureplay software house. Did we forget something? Ah yes. Loudcloud was set up by Marc Andreessen, the man who made a mint out of Netscape. ®