IBM's in the Cloud for $1.2 Billion

Mike Allen
January 17, 2014

"IBM's newest expenditure will bring the company's data center total to 40 - the $1.2 billion will go towards building 15 new data centers. With a legion of data centers across the globe, IBM is betting that the future's in cloud computing.

The least vocal of the major players in the cloud, IBM has remained relatively mum, compared to Microsoft and Amazon Web Services, about its plans to build more cloud infrastructure. On the contrary, according to IBM SoftLayer CEO Lance Crosby: ""having lots of data centers in lots of different countries around the world will be important in the long term. We want the world to understand that cloud is transformational for IBM.""

The centers are all slated to opent this year, doubling the company's cloud capacity after acquiring SoftLayer in 2013 for $2 billion. The new centers will provide public and private cloud services, and internal company operations. IBM also plans to combine the new centers, with SoftLayer & IBM's existing centers to provide these services under a single unified cloud operation.

According to Rebecca Wettermann, a vice president at the enterprise IT analysis firm Nucleau Research, this announcement comes as no surprise and that it's next logical step for the company - who's been busy preparing a cloud-centric future.

""IBM has always taken a measure approach to annoucements. But IBM has quietly been running data centers for a long time, and the IBM cloud has been established"" Watteman said. ""We've seen a slow transformation of IBM from a services company to a software company, and now to a cloud company.""

In 2007 IBM started to aquire companies with cloud computing software or expertise, spending more than $7 billion in the process while aquiring more that 15 companies - companies, according to Watteman, with the talent to grow the unified IBM cloud.

Addtionally, Crosby stated that: ""Everything at IBM going forward will reside on the Softlayer infrastructure -as-a-service.""

To take full advantage of Softlayer IBM will not only offer IaaS, PaaS (platform-as-a-service), SaaS (software-as-a-service) initiatives towards the unified IBM cloud.

The cities that IBM has their sights on are Washington, London, Hong Kong, Toronto, Mexico City and Dallas, as well as, in cities in Japan and India. The company plans to announced additional locations later in the year.

By IBM's estimate, global cloud revenue will grown to $200 billion per year by 2020, and the company hopes to generate $7 billion in cloud revenue in 2015.

IBM might be a bit behind Amazon and Microsoft, but IBM has a big advantage over the two: expertise in local market and country regulations such as HIPAA, and the ability to conformed to the FISMA's (Federal Information Security Management Act) requirement of the U.S. federal goverment (centers in Washingto and Dallas will be focused on serving this requirement.)

With a strong partner program, and more data centers on the way, the cloud's the limit for the seemingly dark horse in the data center race."



    Mike Allen

    "IBM's newest expenditure will bring the company's data center total to 40 - the $1.2 billion will go towards building 15 new data centers. With a legion of data centers across the globe, IBM is betting that the future's in cloud computing. The least vocal of the major players in ...