SoftLayer Cloud Business Thriving Inside IBM - InformationWeek

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7/14/2014
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SoftLayer Cloud Business Thriving Inside IBM

A year after it was acquired by IBM, SoftLayer gains SSDs, new data services, and expanded reach as IBM pursues its goal of 40 cloud centers by year's end.

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SoftLayer, a year after IBM acquired and installed it as its cloud services unit, is adding customers at a rate six or seven times as fast as when it was an independent company, says George Kandis, Big Blue's chief strategy officer.

Over the last 12 months, SoftLayer has gained 6,000 new customers. IBM purchased SoftLayer for $2 billion in July 2013. Karidis says SoftLayer's customer base was composed primarily of small and midsized companies, with some verging on becoming much larger companies. The thing they had in common was they did not have big IT departments, but were looking to expand infrastructure rapidly, Kandis told InformationWeek.

Now those customers are finding services in SoftLayer cloud centers alongside some of IBM's largest outsourcing customers -- Fortune 500 companies moving into the cloud, such as Whirlpool, Daimler's Moovel unit, and insurer Generali Group.

Both types of customers have helped dictate the type of service that SoftLayer has become: a combination of virtual servers and bare-metal servers for large databases and legacy applications. SoftLayer was an early provider of bare-metal servers and has expanded the practice since becoming part of IBM.

[Want to learn more about how IBM is expanding platform-as-a-service on SoftLayer? See IBM Bluemix Gets DevOps Muscle.]

IBM has said it will have 40 SoftLayer datacenters by the end of the year. It intends to add 15 datacenters in new locations to SoftLayer's existing 13, and incorporate another 12 of its own as part of the SoftLayer worldwide chain. One opened in London Monday, where the default server will be equipped with solid-state disks, says Karidis. Earlier this quarter, new datacenters opened in Hong Kong and Dallas. By the end of the third quarter, three more will open in Melbourne, Australia; Ashburn, Va.; and Toronto. The centers in Dallas and Washington, D.C., are built to meet Federal Risk and Authorization Management Program (FedRAMP) and Federal Information Security Management (FISMA) specifications and are designed to work with federal government agencies.

IBM's SoftLayer will quickly expand its datacenter lineup.
IBM's SoftLayer will quickly expand its datacenter lineup.

Karidis, who was also chief strategy officer of SoftLayer prior to its acquisition, says SoftLayer intended its datacenters to be linked by high-speed fiber optic lines using the flexible, multi-protocol label switching protocol. It now offers access to its cloud centers over private lines through its Direct Link service. Customers may route workloads to SoftLayer without relying on the Internet, he notes.

The emerging global chain of datacenters means SoftLayer will be able to supply a growing small or midsized company with infrastructure services in parts of the world where it might be reluctant to try to establish a datacenter presence of its own. "In some parts of the world, the infrastructure isn't as robust as they may be used to. We're giving customers an ability to spread out geographically" without building more datacenters, says Karidis.

Likewise, SoftLayer at the one-year mark is expanding the capabilities and IOPS rate of its Elastic Storage on Cloud service. It's also making its Aspera high-speed transfer service available to move large amounts of data into SoftLayer storage or from virtual servers to bare-metal servers. The service handles both structured and unstructured data for high-speed transfers, according to Kandis.

IBM is also concentrating on offering more big-data services via SoftLayer. For example, Watson is available as a general-purpose big-data analytical engine; it's also available now as the more specific Watson Engagement Service. The service running on IBM brand Power8 servers allows a company to process customer data as it's gathered during a customer visit, transforming the way a firm delivers customer service, marketing, and sales, Karidis tells us.

It is also now offering a JumpGate service, which will move data from a proprietary API across a network and through an OpenStack API to reach a different cloud service.

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Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive ... View Full Bio

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Charlie Babcock
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Charlie Babcock,
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7/15/2014 | 4:49:14 PM
IBM SoftLayer may not compete head to head with Amazon
TechYogJosh, Many IT users have wanted to get out of a relationshp with IBM and have done so. Some have stayed with IBM because their IBM systems are doing useful work. You can make a blanket statement about what IBM customers want, if  you wish, but I tend to believe those who vote with their feet. I don't think SoftLayer and Amazon will compete head to head, exactly. The IBM cloud is going to look and feel more enterprise and legacy-system-oriented.
Charlie Babcock
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Charlie Babcock,
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7/14/2014 | 5:36:50 PM
Use a private network to get to cloud?
Don't discount the value of SoftLayer's private network, able to carry workloads on their way to the cloud . Amazon was slow to understand the significance of companies wanting to move data between cloud data centers. (Why would you want to do that when we offer multiple aviailability zones? Answer, disaster recovery, data survivability.) AWS now offers the Direct Connect option. Also SoftLayer was built to provide a uniform infrastructure for a young business with the potential to go global.  
Lorna Garey
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Lorna Garey,
User Rank: Author
7/14/2014 | 4:51:29 PM
Re: IBM customers will be hungry for legacy services
Very true, in fact, this is suggested by the cloud ROI survey, that enterprise-class costs more, whether you're in the cloud or not.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/14/2014 | 1:54:18 PM
IBM customers will be hungry for legacy services
That will bear watching, Lorna. I suspect IBM will always have enough data movement, data management and private line access services that results in its ending up charging more than commodity service providers. That will be by design of course, plus legacy system users will find Tivoli and other IBM software available to them inside SoftLayer, now available as SaaS. IBM customers are moving to the cloud, but they're still using IBM products in the cloud. Hard to run legacy systems, otherwise.
Lorna Garey
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Lorna Garey,
User Rank: Author
7/14/2014 | 11:29:03 AM
IBM value add
Charlie, It seems clear that businesses like the idea of an IaaS provider backed by the enterprise IT chops of IBM. If SoftLayer can stay in the ballpark with Amazon and Google on pricing, I see no reason it won't be a serious challenger -- but that's the million-dollar question, right? Will it stay in that how-low-can-we-go race?
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