IBM Sees Major Cloud Expansion In 2014; Aims For More

by CXOtoday News Desk    Dec 19, 2014

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IBM said it aims to expand the number of data centers it offers clients around the world by 25 percent to meet fast-rising demand for internet-based services, and declared that 2014 has been a “breakthrough year” for its cloud computing business. The tech giant announced a broad expansion of its global cloud computing network to 48 cloud centers with 11 new locations serving a growing roster of enterprise clients looking to move to hybrid cloud computing.

In October, IBM announced a partnership with SAP to offer cloud computing services to the enterprise. The companies said that a new partnership will help strengthen their positions in the cloud computing space. Moreover, experts see it as a great way of outpacing rivals like Amazon and Oracle that have chosen to build their own network of data centers, but are also bullish on enterprise cloud applications.

IBM has also entered a partnership with data center provider Equinix for nine more cloud centers in Australia, France, Japan, Singapore, The Netherlands and the US and is opening up three new cloud computer facilities of its own in Germany, Mexico and Japan.

The company has also signed a number of technology partnership deals with Microsoft, Tencent, AT&T and Intel to give its customers more flexibility in running other major business systems on IBM cloud networks.

Read on: Can SAP-IBM Deal Keep Oracle, Amazon At Bay?

The IT giant, which has transitioned from its conventional software and outsourcing services said its own cloud business is having a banner year. “We have had a really good year. We would call it a breakthrough year in cloud,” Angel Luiz Diaz, vice president in charge of IBM’s cloud computing business, told Reuters.

IBM’s cloud revenue reached $4.4 billion in 2013 and was up by 50 percent in the first nine months of this year, it reported in October, making it one of IBM’s fastest-growing businesses, although it still accounts for only a fraction of the $94 billion in total revenues which IBM is expected by analysts to generate this year. According to the agency report, IBM has announced multi-year deals in recent weeks worth a total of more than $4 billion that are fuelling the company’s expansion in data centers.

IBM entered the hybrid cloud bandwagon along with rivals Hewlett-Packard and EMC’s VMware, offering services that let customers run key their business on private, internal networks along with consumer-facing public cloud systems.The system provides companies with greater speed, security and regulatory advantages but at similar costs as public clouds, say experts and also let customers move their existing business software to the Internet over several years rather than in one big leap. According to leading technology research firm, Gartner, nearly half of all enterprises will have a hybrid cloud deployed by 2017.  

So far this quarter IBM has bagged major deals with airline Lufthansa, Dutch bank ABN AMRO, advertising giant WPP, audio electronics maker Woox Innovations in Hong Kong and the Dow Water arm of Dow Chemical and looks for more deals and market expansion in the coming quarters.