Separately, Loudcloud announced it would change its name to Opsware.
Sunnyvale, Calif.-based Loudcloud is selling its managed hosting business to global services giant EDS for $63.5 million, the companies said Monday. The business, which has around 50 clients, should account for $75 million in revenue in 2002, Loudcloud said.
The deal also calls for EDS to license Loudcloud's Opsware IT automation software, paying $52 million over three years. Opsware, which helps companies manage servers and business applications, is the "foundation" of Loudcloud's managed services business.
Loudcloud is the brainchild of Marc Andreessen, who played a seminal role in the dot-com IPO boom in 1995, when as a 24-year-old wunderkind he helped take Netscape Communications public. But the second time around for Andreessen has been a, with the weak economy forcing Loudcloud to swap a growth strategy for one that conserves cash.
Ben Horowitz will continue as CEO of the newly named company, and Andreessen will remain chairman.
Loudcloud hasits business model before, as it sought a more stable financial foothold.
Gartner analyst Ted Chamberlin says since Loudcloud went public, the company's good products, ownership of assets and experienced, high-profile management team have made it an attractive acquisition target.
"The deployment of Opsware is expected to dramatically reduce cost and improve efficiencies in the data center environment by automating the complete life cycle of managing business applications and the underlying infrastructure," the company said in a statement.
The deal, slated to close in September, is not expected to have an impact on EDS' bottom line. About 140 Loudcloud employees in California, Virginia, New York, and the United Kingdom will be transferred to EDS.