7 Ways IBM Will Make $7 Billion In Cloud - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cloud // Platform as a Service
09:52 PM
Charles Babcock
Charles Babcock
Connect Directly

7 Ways IBM Will Make $7 Billion In Cloud

Can IBM make people believe that it's committed to the cloud in the same manner as an Amazon or Rackspace? IBM's plans include much more than a place for Unix hardware.

IBM in the near future will unveil a comprehensive initiative that better ties together its multi-pronged efforts to offer cloud computing services, according to one of its top cloud strategists.

It's not just concentrating on devoting new resources to developers or more hosted services in the cloud for large enterprises, something IBM has already done for years. Rather, IBM will present customers with a broad initiative meant to help them leave behind today's complex and inefficient data center management model and move toward a more cloud-like operation--whether a private cloud on-premises or a private cloud at an IBM data center.

Ultimately, IBM believes many Fortune 500 cloud services users will become hybrid, public/private cloud operations, said Jim Comfort, VP of cloud offering management for IBM's Global Technology Services. We're not there yet by any means. But as a giant step in that direction, "many businesses are becoming service providers for themselves," Comfort said. They're concentrating on a private cloud first, with use of public cloud infrastructure-as-a-service to follow. Consider some key parts of IBM's plans.

1. Starter Kit for Cloud on Power Systems

One of the key ways IBM is different from other cloud service suppliers is that it can help build a private cloud that's not just full of Intel/AMD commodity x86 servers. Rather, reflecting its many years of being a major server producer, IBM offers a private cloud architecture that includes both x86 hardware and IBM Power servers capable of running its AIX Unix OS.

That's one way IBM is headed for $7 billion in cloud revenues by 2015. It is already offering Starter Kit for Cloud on Power Systems, which gives Power server users a way to include virtualized Power servers as part of their private cloud operations.

[ Why does so much infrastructure as a service depend on the x86 architecture? See Intel Xeon E5: Server Chips With Virtualization Secrets. ]

In IBM's lexicon, the private cloud may be on premises or it may be in an IBM data center. It may be managed by the customer (SmartCloud Enterprise), or the customer may decide to turn over management of the physical equipment to IBM (SmartCloud Enterprise Plus). The latter used to be known as managed hosting services. It would still be managed hosting services but for the fact that, regardless of where the private cloud is located, it includes a portal for user self provisioning, deployment, and monitoring of virtual machines. Those VMs can be managed by the customer through one management interface, whether x86 or AIX VMs.

That opens the door for a data center with aging applications to move both its Unix and x86 apps into a private cloud setting and have self-servicing, metering, and chargeback features, instead of accepting a forced migration away from Unix to x86. The Starter Kit is an underreported part of IBM SmartCloud Foundation, a set of software components to enable a customer to build a private cloud, whether x86 or Power or both, for running core business applications.

In my opinion, this is one of the strengths--and weaknesses--of the IBM approach. It must serve the cloud computing interests of a large, existing customer base, and it is in IBM's own interest to extend the life of its Power chip architecture. At the same time, IBM must convince customers that the cloud's economies of scale come about when you standardize.

It's good for existing IBM customers that "standardization" in this case includes both x86 and Power/AIX. It may prove less convincing to new customers that IBM is the best choice versus an x86-only vendor. The latter would include Microsoft, Google, Rackspace, or Amazon. Comfort says IBM will help the customer get to cloud computing whichever way he prefers.

2. SmartCloud Services Meet Public Cloud

In addition to helping customers implement private clouds, IBM will also help them move the workloads they choose to public infrastructure-as-a-service, whether Amazon Web Services or IBM's (or any other public IaaS environment.) This brings us to IBM's second way of earning revenues from cloud computing: IBM's existing SmartCloud Services, meant to take advantage of infrastructure-as-a-service external to the enterprise data center. Included are the familiar application development and test services, plus IBM-based infrastructure-as-a-service or integration with outside IaaS providers, such as AWS. IBM uses the integration product from its Cast Iron acquisition to provide the connections.

3. New SaaS Options

IBM is planning more software-as-a-service initiatives as well. "Salesforce.com, usually regarded as the most successful cloud company to date, understood what made the sales force successful," and provided online software to increase its productivity by a factor of two or three through the use of its CRM application, Comfort noted.

IBM wants to do something similar for some targeted groups of business users--groups IBM understands well thanks to years of consulting engagements and years of service as a prime technology supplier. IBM's WebSphere Commerce Suite, its business-to-consumer ecommerce software, has been available in SaaS form since 2008.

IBM's Comfort, during an interview at the IBM building on Madison Avenue in New York on April 2, couldn't specify exactly what the additional offerings might be, but he cited software to help automate processes for teams working for a chief marketing officer as a potential example. In addition, Comfort pointed to the Smarter Cities initiative that provides software to manage such services as transportation or public utilities. If it works on premises for one city, then chances are, it can be offered as SaaS for many, he said.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
1 of 2
Comment  | 
Print  | 
More Insights
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

10 Things Your Artificial Intelligence Initiative Needs to Succeed
Lisa Morgan, Freelance Writer,  4/20/2021
Tech Spending Climbs as Digital Business Initiatives Grow
Jessica Davis, Senior Editor, Enterprise Apps,  4/22/2021
Optimizing the CIO and CFO Relationship
Mary E. Shacklett, Mary E. Shacklett,  4/13/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
2021 State of ITOps and SecOps Report
In this report from InformationWeek, we explore what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
Flash Poll