International Business Machines (IBM) has said that it has acquired Web hosting company SoftLayer Technologies for expanding its presence in the cloud computing market.

The company has also create a new division for clients interested in so-called cloud services in order o better compete with its rival in the global market. Company officials have not confirmed the terms of the deal between the two companies. IBM has been in talks since March to takeover SoftLayer and it is believed that the deal could be valued about more than $2 billion.

SoftLayer is based in Dallas in the US and it leases online storage space to companies. The company as founded in 2005 and has merged as the world's largest privately held website hosting service. It offers cloud infrastructure to its 25,000 customers that includes AT&T Inc and Citrix Systems. The company competes with the likes of Amazon. com Inc's Web services business and Rackspace Hosting Inc in the global market.

Three major firms, Hewlett Packard Co and Microsoft Corp, IBM have been investing in cloud computing to expand in the new segment that is catering to the increasingly diverse businesses around the world. Technology firms have been looking to transform themselves to base their mechanisms on the cloud.