& cplSiteName &

IBM's Big Hybrid Cloud Plan Calls for Big Infrastructure Investment

Scott Ferguson
3/28/2017
50%
50%

Even the cloud has to run on physical hardware.

Within IBM, this rather obvious fact of cloud computing is what keeps John Considine, the general manager of the company's cloud Infrastructure business, busy. The former CTO of Verizon Terremark and founder of the cloud management vendor CloudSwitch, Considine now oversees strategy, development and management of Big Blue's public cloud business, which includes more than 50 data centers across the globe. (See Verizon to Buy CloudSwitch.)

While IBM has done well in the private cloud market, it's the public cloud that's growing -- nearly double last year -- with more growth on the way, according to recent reports from Synergy Research Group and other firms. (See AWS Maintains Its Public Cloud Dominance.)

Considine sees private cloud as a stepping stone toward either a full public cloud plan, or the hybrid model that many are embracing now. And that shift in computing requires hardware -- lots of it -- which is where Considine's job gets interesting.

"All of these advanced services have to run on real servers, and that's real data with real storage and real networking and by making the massive investments we are making with our infrastructure, those higher level services are enabled more, they have better performance and have better cost," Considine told Enterprise Cloud News in an interview. "We can deliver more capabilities and more locations and so really infrastructure matters a lot."

A 'billion' reasons to invest
In addition to IBM's 50 current cloud data centers, Considine plans on making major investments in infrastructure throughout 2017 to support a number of different initiatives, including cognitive computing plans, artificial intelligence and Infrastructure-as-a-Service (IaaS).

Considine is measuring those investments "in the billions," although he declined to offer a specific dollar amount. An IBM spokeswoman also declined to give specifics.

However, a look at the company's financials shows how much it can invest. Like other big tech firms, IBM doesn't specifically break out its cloud revenues.

Instead, IBM does offer a line item in its financial reports called Technology Services & Cloud Platforms. In its fourth quarter report, IBM reported revenue of $9.3 billion in this section, an increase from the $9.1 billion it reported the year ago. For 2016, IBM posted revenue of $35.3 billion.

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

Charles King, an analyst with Pund-IT Research, sees IBM taking a different tack than Google and Amazon when it comes to building clouds. Unlike those two juggernauts, which are building out massive facilities, King said IBM is building smaller, regional data centers that target specific needs or conform to local laws and regulations, such as the European Union.

"IBM's traditional customers are among the world's largest enterprises," said King. "Instead of following a single cloud model, the company develops cloud services designed to meet the specific business requirements of IBM clients. That's quite different than offering overarching, generalized solutions that include features few businesses really need."

Considine reflected that sentiment in the interview: "It's not a build it and they will come, this is driven by demand for our infrastructure."

However, IBM greatest strength -- it's deep relations to the largest enterprises -- has also hurt it in the cloud race. Since the cloud is about "democratizing" IT, King said, Google and Amazon Web Services have done a better job of appealing to smaller business that see the cloud as a way to save money and grow.

"IBM has a worked hard to take its offerings down market and to develop other kinds of relationships and they have a lot of work to do there," King said.

Last week, IBM again showed its flair for big deals. At its InterConnect show, the company inked a deal with China's Dalian Wanda Group to provide cloud services in that country. (See IBM Cloud Targets Financial Services Developers .)

Customer demands
Despite customer perception and competition that also includes Microsoft and Oracle, IBM is looking at a future where the cloud forms the basis for several other technologies, including its much-talked about cognitive computing -- Watson -- as well as AI, Internet of Things and the development of whole new sets of APIs to make these technologies work. (See Always 'Just Around the Corner,' AI Finally Arrives.)

IBM's John Considine. (Source: IBM)
IBM's John Considine.
(Source: IBM)

Don Boulia, general manager of Cloud Developer Services, works on issues related to Platform-as-a-Service (PaaS), as well as developers and DevOps. What he builds typically sits on top of the infrastructure Considine is investing in.

When Boulia talks to customers, he sees a world shifting to the cloud on one side, but still locked into traditional data centers on the other. This data, which is stored in legacy systems, has value even if enterprises are not sure if it should stay or move to the cloud.

IBM is trying to bridge that gap.

"A lot of interesting data is sitting back in the enterprise," Boulia said in an interview at IBM's SoHo offices in New York City. "So if I'm a bank, for example, I probably haven't moved all my banking systems out to a cloud and I probably have them in a traditional data center, but that doesn't mean I don't want to access all of those things and get value of those things out in the cloud. So what we see people doing is putting in an API layer in front of their private cloud or their private assets and exposing those out to other kinds of cloud environments."

To achieve these results, it's about wringing as much efficiency out of the system as possible. When investing in the infrastructure, Considine is taking that into consideration.

"We want efficiency at every layer," Considine said. "That covers data center design, power, cooling, redundant power… right to the next level up and utilization. That's what you need to deliver hyperscale public cloud infrastructure."

Related posts:

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

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from Scott Ferguson
From its roots in industrial farm machinery and other equipment, John Deere has always looked for a technological edge. About 20 years ago, it was GPS and then 4G LTE. Now it's turning its attention to AI, machine learning and IoT.
Artificial intelligence and automation will become more integral to the enterprise, and 90% of all apps will have integrated AI capabilities by 2020, according to Oracle CEO Mark Hurd.
IBM is now offering access to Nvidia's Tesla V100 GPUs through its cloud offerings to help accelerate AI, HPC and other high-throughput workloads.
CIO Rhonda Gass is spearheading an effort to bring more automation and IoT to the factories making Stanley Black & Decker tools and other equipment.
Workday is looking to build out its machine learning and artificial intelligence capabilities with the acquisition of startup SkipFlag.
Featured Video
From The Founder
Light Reading founder Steve Saunders talks with VMware's Shekar Ayyar, who explains why cloud architectures are becoming more distributed, what that means for workloads, and why telcos can still be significant cloud services players.
Flash Poll
Upcoming Live Events
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Australia's Optus on Back Foot After 'Anglo Saxon' Job Ad
Ray Le Maistre, Editor-in-Chief, 4/13/2018
Is Gmail Testing Self-Destructing Messages?
Mitch Wagner, Mitch Wagner, Editor, Enterprise Cloud, Light Reading, 4/13/2018
BDAC Blowback – Ex-Chair Arrested
Mari Silbey, Senior Editor, Cable/Video, 4/17/2018
Verizon: Lack of Interoperability, Consistency Slows Automation
Carol Wilson, Editor-at-large, 4/18/2018
AT&T Exec Dishes That He's Not So Hot on Rival-Partner Comcast
Mari Silbey, Senior Editor, Cable/Video, 4/19/2018
Animals with Phones
I Heard There Was a Dresscode... Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed