Cloud

CSC just acquired cloud startup ServiceMesh [updated]

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CSC just acquired cloud management startup ServiceMesh to compete with infrastructure giant VMware.

ServiceMesh is a Santa Monica-based startup that aims to give large enterprises a bit more control over the cloud. The company raised $15 million in venture capital from Ignition Partners in 2011 to compete with giants like IBM and HP. It was founded in 2009.

CSC has not revealed the amount it paid for ServiceMesh, although we hear from several sources familiar with the matter that it’s in the $325 to $350 million range. A spokesperson from ServiceMesh confirmed that number is close — the company received $158 million in up front cash, and $137 million in an earn out that is based on certain performance goals. A retention plan has also been put in place.

The press release announcing the acquisition is filled with some incomprehensible jargon. Simply put, the buy-up will help an IT infrastructure giant like CSC work with clients who are running applications on different clouds. Increasingly, we’re seeing companies adopt a flexible, hybrid cloud approach.

In August, CSC bought data management startup InfoChimps, which suggests that the company is ramping up its M&A and is keeping a close eye on fast-growing enterprise startups.

This is the second business software acquisition announced in the past 30 minutes. Neustar just revealed that it has acquired Aggregate Knowledge for $119 million in cash consideration.