IBM Expands Cloud Centers/Partnerships/Clients

By Charles King, Pund-IT, Inc.  December 18, 2014

IBM announced a broad expansion of its global cloud computing network to 48 cloud centers. The company will reach enterprise customers at 11 new locations, including IBM Cloud centers in Frankfurt, Mexico City and Tokyo. These centers further expand IBM’s global cloud footprint which includes facilities in Mumbai, London, Amsterdam, Beijing, Hong Kong, Singapore, Melbourne, Toronto, Dallas and Raleigh, N.C. which opened this year.

The new IBM Cloud center facilities are open 24 hours a day, seven days a week, and offer an array of solutions. These include proven cloud resiliency services that guarantee customers up times of 99.99 percent across any IT environment, including traditional IT, and public, private and hybrid cloud deployments.

A strategic partnership with Equinix will provide customers direct access to the full portfolio of SoftLayer cloud services via the Equinix Cloud Exchange in eight more centers in Australia, France, Japan, Singapore, The Netherlands and the United States. IBM noted that the Equinix deal is just the latest in a series of major partnerships it announced in 2014, including collaborations with SAP, Microsoft, Tencent Cloud, AT&T and Intel.

In addition, IBM is also contributing private computing services from IBM Cloud OpenStack Services platform to the OpenStack and Cloud Foundry Foundations.  The initial usage of these services will offer expanded capabilities to enable automated integration, reduced cycle time and increased quality for software distribution. This will accelerate time-to-market for all uses of OpenStack based infrastructure.

According to IBM, its cloud business is achieving significant growth and momentum, including:

  • Cloud revenues of $4.4 billion for 2013 – up 69 percent year-to-year
  • IBM cloud revenue has increased 50 percent through Q3 2014 with a $3.1 billion run rate in as-a-service revenue.

IBM Cloud has also notched significant recent wins that the company says reflects its ability to deliver a full range of services through the cloud in ways that other cloud providers cannot match. Since the start of November, IBM has announced more than $4B worth of cloud agreements with major enterprises around the world including Lufthansa in Germany, ABN AMRO in the Netherlands, WPP in the UK, Woox Innovations in Hong Kong, Dow Water and Thomson Reuters.

The company also said that “born-on-the-web” innovators are increasingly choosing to build their business on the IBM Cloud, noting wins with Diabetizer and Preveniomed in Germany, Hancom in South Korea, Musimundo in Argentina and Nubity Inc. in Mexico.

The pitch

IBM Cloud caps 2014 on a stratospheric note.

Final analysis

Synergy is a term that is used all too often in the IT industry, especially in cases where it implies a sort of magical combination of means that leads to often unexpected ends. Instead, we believe that the most successful synergistic exercises tend to be planned out in advance and utilize well understood knowledge, assets and skills. While unexpected benefits can and occasionally do arise, they mostly qualify as additional interest paid on an already solid investment.

IBM’s strategy and efforts around cloud computing qualify as an excellent example of how this works. At a practical level, “cloud” qualifies as a trendy rebranding of system and data center management and automation processes that have been around for years. Those are skills that IBM understands on a visceral level. In some, if not many, cases, the company wrote the literal books on them.

In addition, IBM’s expertise in enterprise-class computing is a well-established fact. So, as the company’s cloud computing solutions and services have come into their own and gained significant momentum during the past year or so, their enterprise-class qualities should come as no surprise. That’s a point worth remembering as other well known public cloud providers attempt to sell the “enterprise readiness” of their own solutions.

The bigger question is whether enterprise customers will actually buy with that self-assessment, but it’s likely that few have any doubts about IBM’s offerings. IBM Cloud’s focus on the needs of enterprise clients has been set in stone pretty much from day one since the July 2013 acquisition of Soft Layer. That IBM would use as the foundation of its cloud strategy a company with remarkably deep ties among Fortune 50 and 500 companies (as well as born-on-the-web companies and public sector organizations) tells you all you need to know.

During the past year or so, cloud vendors and the larger market have come to realize that hybrid deployments represent the future of cloud, especially as it is adopted and used by large organizations. The strategic shifts required to accommodate that change have sometimes been profound but it seems fair to say that many other cloud players are simply catching up to where IBM has been all along. That doesn’t mean impending competition will be a cakewalk for the company given the substantial market and mind share that some competitors have established.

Focusing on addressing and meeting the needs of its essential customers is what virtually every successful vendor does. Sometimes all that takes is experience, and other times it requires learning and using new skills and strategies. IBM’s latest cloud computing centers, partnerships and customer wins certainly provide a happy ending to 2014 but we also expect they offer a taste of where the company will go in the year to come. In all likelihood, IBM will spend 2015 showing customers, partners and competitors what enterprise-class cloud and synergy are all about.

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