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Blue Box founder Jesse Proudman, winner of the 2014 Young Entrepreneur of the Year at the GeekWire Awards.
Blue Box founder Jesse Proudman, winner of the 2014 Young Entrepreneur of the Year at the GeekWire Awards.

Blue Box, meet Big Blue.

Blue Box, a 12-year-old Seattle company that offers on-demand private cloud services, has agreed to be sold to IBM in a deal of undisclosed size.

“IBM is dedicated to helping our clients migrate to the cloud in an open, secure, data rich environment that meet their current and future business needs,” said IBM General Manager of Cloud Services Jim Comfort in a release. “The acquisition of Blue Box accelerates IBM’s open cloud strategy making it easier for our clients to move to data and applications across clouds and adopt hybrid cloud environments.”

Meanwhile, in related news, Cisco today announced its plans to buy OpenStack provider Piston Cloud Computing.

bluebox1Bootstrapped in its early days as Web site hosting company by entrepreneur Jesse Proudman, Blue Box morphed in recent years as it helped companies establish and maintain private cloud installations. Those efforts really accelerated after Blue Box named tech industry veteran Matthew Schiltz as CEO in May 2014.

Schiltz, the former president and CEO of DocuSign, has a knack for selling cloud-based companies. He previously helped sell Bellevue-based cloud startup Tier 3 to CenturyLink in 2013.

Matthew Schiltz
Matthew Schiltz

Blue Box raised $14 million earlier this year from an undisclosed telecommunications partner, as well as from existing backers such as Voyager Capital and Founders Collective. Blue Box employs 60 people, with .

In 2013, Blue Box was named to the Inc. 5,000 list, boasting a three-year revenue growth rate of 399 percent and 2012 revenue of $9 million. It also more recently ranked #72 on the GeekWire 200 list of privately-held tech companies in the Pacific Northwest.

Blue Box says its private-based cloud service is more stable and secure than public offerings from those like AWS, allowing enterprises to put applications behind a firewall relatively easily. Working hand-in-hand with the OpenStack framework, Blue Box says that its Private-Cloud-as-a-Service, or PCaaS, puts “power” in the hands of the customer.

IBM also is committed to OpenStack, with more than 500 engineers and developers working on open cloud projects.

Blue Box works with clients to manage and operate that private cloud infrastructure, with a message on the company’s Web site noting: “I pity the fool who runs their own cloud!” The company operates data centers in Seattle, Ashburn, Virginia, London and Zurich.

“No brand is more respected in IT than IBM,” said Blue Box Founder and CTO Jesse Proudman in a statement. “Blue Box is building a similarly respected brand in OpenStack. Together, we will deliver the technology and products businesses need to give their application developers an agile, responsive infrastructure across public and private clouds.”

The acquisition marks yet another example of Seattle’s importance when it comes to cloud technologies, with a number of large tech companies — H-P, Oracle, Amazon, Microsoft, and now IBM — using it as a base for cloud engineering.

“We’ll be investing heavily in our presence here in Seattle and become a big engineering hub for IBM,” Proudman told GeekWire via email. He will remain with the company, helping to spark more of that growth in the region.

IBM is a powerhouse in the cloud, with its total revenue in the segment (including public, private and hybrid rollouts) estimated at $7.7 billion for the 12-month period ended in March 2015. Customers include The Weather Company, US Army, Marriott International and ShopDirect.

IBM said that it will support Blue Box clients, and the business will continue to operate from its home base in Seattle. Blue Box counts more than 300 clients, including Viacom, healthcare technology company BioIQ and Treehouse.

Follow-up: Blue Box founder Jesse Proudman on private clouds, bootstrapping and why he sold to IBM

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