IBM Opens 4 More US-Based Data Centers

Scott Ferguson

IBM is planning to open four additional data centers in the US as part of the company's plan to build out regional cloud facilities across the globe to support initiatives ranging from cognitive computing to the Internet of Things.

Big Blue will open two data centers in Dallas and two in Washington DC as part of this plan, according to an April 26 statement. When these new facilities open, IBM will have 55 data centers worldwide, including 19 in the US.

IBM plans to open a total of eight data centers within the first half of 2017.

These data centers are part of IBM's effort to increase its public cloud presence in the face of competition from Amazon Web Services -- which is currently considered the leader in public infrastructure-as-a-service (IaaS) -- as well as Microsoft and Google. (See AWS Maintains Its Public Cloud Dominance.)

Instead of building out massive data centers, IBM has focused more on smaller, regional cloud facilities in order to meet local concerns, such as privacy, security and other regulations within the European Union.

An IBM data center. (Source: IBM)
An IBM data center.
(Source: IBM)

Earlier this years, John Considine, the general manager of the company's cloud infrastructure business, told Enterprise Cloud News that IBM plans to spend "billions" on hardware throughout 2017 to help build these data centers. (See IBM's Big Hybrid Cloud Plan Calls for Big Infrastructure Investment.)

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Wednesday's announcement comes after the company suffered through its 20th straight quarter of revenue decline as its legacy businesses dragged down the bottom line during the first quarter of this year. However, the same report showed that cloud revenue was up 33% to $3.5 billion during the quarter. (See Legacy Business Still Dragging IBM Down.)

While AWS, Google and Microsoft have focused on bringing public cloud to as many businesses as possible, IBM and Oracle have focused more on their large enterprise customers, attempting to move these customers from on-premise software to their clouds.

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

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5/5/2017 | 12:36:46 PM
Re: more revenue, more build-out
And presumably they can meet concerns of entities like the European Union on privacy matters while concentraing on capturiing and signing large customers who are ready to move to the cloud with those data centers strategically placed around the world.
4/28/2017 | 4:30:29 PM
Re: more revenue, more build-out
Yes, it would seem that IBM in order to compete with Amazon and others trying to capture the market will be served at least for now in getting "focused more on smaller, regional cloud facilities in order to meet local concerns," than attempting to go head to head with Amazon for now.
4/28/2017 | 10:13:49 AM
more revenue, more build-out
With IBM cloud revenue up, it makes sense for them to build-out, and strategically even better sense for them to use smaller data centers to maintain better data security.
4/27/2017 | 12:23:43 PM
Re: More IoT clouds?
Inspired idea! I'm a big fan of blockchain, from what I've heard. I think it's gotten an unnecessarily bad rap in recent years. And it's a self-fulfiling prophecy - if big companies dismiss it as a failure without giving it a fair chance, then of course it will fail! 
4/26/2017 | 3:26:19 PM
Re: More IoT clouds?
@mhhfive: I think you have the economies of scale right, but IBM also wants to keep a lot of what they do regional for other purposes. Namely, keep data centers local to keep data local. A company is Germany does not want it's data to pass through a US data center because of security and privacy concerns. So, IBM builds the data center in Germany and it keeps the data from leaving that country.

4/26/2017 | 2:50:01 PM
Re: More IoT clouds?
How do the economics of smaller datacenters work out? It's a combination of location and energy costs, along with the human resources. Are these "lights out" datacenters located close to customers for low latency? 

Back in the day, there was some effort to make mobile datacenters, so that they could be shipped to any location as needed and simply plugged in and operated remotely. Sun Microsystems had a shipping container design, but I think it was tossed out when Oracle acquired Sun.... 
4/26/2017 | 1:49:21 PM
Re: More IoT clouds?
Yes, it's good to differentiate oneself rather than copy exactly the same approach used by the competition.
4/26/2017 | 12:49:51 PM
Re: More IoT clouds?
@Ariella: The company doesn't have a lot of choice in the matter, either. This is what they betting the future on so might as well start building them now. What's interesting is how they are building smaller facilities rather than large ones like Google and AWS.
4/26/2017 | 10:59:29 AM
Re: More IoT clouds?
I know IBM has been scaling back in the past few years, so it's good for the company to be building up again. 
4/26/2017 | 9:51:18 AM
More IoT clouds?
Microsoft also just announced a focus on IoT cloud support, so I suppose we'll be seeing more cloud security solutions for IoT devices soon. My favorite IoT malware these days is BrickBot -- which looks for insecure devices and turns them into bricks before really bad malware can get to them.
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