IBM Cloud Closes The Year With A Bang--More Data Centers, More Customers

2014 has been an important year for IBM and its cloudy ambitions. The company has gone on an aggressive offensive – investment, development, acquisition and PR. The latter part was a little humdrum with IBM redefining a few terms in order to justify its claim to being one of the top dogs in the cloud world. But marketing spin aside – the investments that IBM has made this year have been impressive and have created a justifiable claim to a position of strength. In January the company announced that it would build a 40-strong data center footprint globally leveraging its SoftLayer acquisition and an investment of some $1.2 billion. Later in the year another billion dollars was thrown at BlueMix, IBM’s CloudFoundry-based Platform as a Service. Later still Big Blue rolled out a cloud marketplace to deliver a couple of hundred Software as a Service offerings from a single shop front.

All that works seems to have been paying off – in the last months my inbox has seen a flood of press releases announcing some huge deals for IBM and its cloud – in the last two weeks that amounts to a reported $4 billion in multi-year enterprise cloud agreements with Lufthansa, WPP, Thomson Reuters and ABN Amro. While many will argue the metrics of those announcements and how much of it is new spend versus a piece of accounting magic, these are, nonetheless, big deals with big, high-profile customers. Other performance metrics that IBM supplied include:

• IBM had reported $4.4 billion in cloud revenue in 2013, has grown revenue at a 50% rate so far this year and expect to break at least $7 billion in Cloud revenue by 2015.
• IBM's overall cloud client base has doubled in the past year to more than 20,000 including not only traditional IBM clients who are moving to cloud but thousands of net new customers including enterprises and born-on-the-Web companies and start-ups.

IBM is releasing more news today with the announcement of an extension of its Softlayer data center footprint. The company is adding its own facilities in Frankfurt, Mexico City and Tokyo and partnering with global data-center operator Equinix to roll out another 8 facilities - Amsterdam, Dallas, Paris, Silicon Valley, Singapore, Sydney, Tokyo and Washington, D.C. This expansion means that IBM has actually surpassed its promises “40 data center” figure and will have 48 facilities globally.

These facilities all share the common Softlayer architecture, and also share IBM’s 99.99% uptime Service Level Agreement – this sort of scale is a real boon for cautious enterprises who are nervous to move to the cloud for fear of outages and single-points-of-failure.

It’s also interesting to see IBM sign partnerships with some organizations that it arguably competes with. Some notable partnerships for IBM cloud this year include:

• SAP selected IBM as a premier strategic provider of Cloud infrastructure services for its business critical applications.
• IBM and Microsoft are working together to provide their respective enterprise software on Microsoft Azure and IBM Cloud.
• IBM and Tencent Cloud recently signed a business cooperation memorandum to collaborate on providing public cloud with Software-as-a-Service solutions for industries.
• AT&T and IBM are collaborating to speed business adoption of cloud services by extending AT&T NetBond services to the SoftLayer platform.
• IBM and Intel worked together to make SoftLayer the first cloud platform to offer its customers bare metal servers powered by Intel Cloud Technology that provides monitoring and security down to the microchip level.

Regardless of your view on IBM’s claim to being the top cloud vendor globally (a claim I find unimportant and simplistic) there is no doubt that Big Blue has created something of real momentum. A combination of a strong hybrid cloud story, developments beyond raw infrastructure (think BlueMix and IBM’s feted Watson technology) and some impressive customer wins all add up to a company that is in the top echelons of the cloud vendors. 2015 will be an even more interesting year for IBM methinks.