EDS buys Loudcloud

US IT services giant EDS has paid $63.5m for Loudcloud which was started by Netscape pioneer Marc Andreesen.

EDS is hoping to further strengthen its existing data hosting business with its plans to integrate Loudcloud's business with its own 50,000 servers in 140 data centre's worldwide. The software development part of Loudcloud will remain independent but be renamed Opsware.

Loudcloud said earlier this year it is expecting its revenues to be around $75m for 2002. The company was hit by a rash of bad news recently as one of its main customers, Atriax, a company which provides online trading platforms for foreign exchange, closed its operations.

Doug Frederick, executive vice president and sector executive for EDS Operations Solutions, said in a statement: "This already is a significant business for EDS, and we have the infrastructure in place to support it. We will gain additional strategic value by deploying the Opsware automated solution throughout our powerful global data centre network, an initiative we expect to generate well over $100m in savings over the term of the agreement."