Later this year, companies will be able to buy IBM software to run new Smart Business services, including the Smart Business Test Cloud, a suite of application management software for test and development, and Smart Business Desktop Cloud, a virtual desktop environment. These offerings can be run in-house or directly from IBM as a service. Even later, IBM plans to sell compute resources directly from its own public cloud, akin to Amazon Web Services (AWS).
"IBM intends to be a player in public cloud, but it wants a foothold in the wide-open new private-cloud market," said Frank Gens, a cloud analyst at IDC. He said this will give IBM a future leg up as enterprises slowly move into public cloud computing over the next five to 10 years. "They're putting resources in near-term returns" and counting on that to open the door for future sales into IBM's public cloud, Gens said.
Built-in features enough to justify cost?
By offering products with management and governance already built-in, IBM hopes to justify the steep price tag. "Business process optimized systems are a heck of a lot easier for CIOs to sell to their bosses," said Gens.
A large enterprise can theoretically roll out its own private cloud for free, if it has the expertise on staff, as many do. For instance, open source Eucalyptus boasts customers that include Eli Lilly and Co. and claims thousands of active private-cloud users. Proprietary vendors also offer cloud services that will run on a customer's existing servers. VMware offers vCloud, and 3Tera has AppLogic - both products are already in the marketplace.
Netherlands-based iTricity CEO Robert Rosier said the new offerings are IBM's attempt to slide into a market that's more talk than walk. ITricity provides EU-centric public cloud resources with a focus on compliance.
"Everyone's talking about virtualization … but only 17% of the enterprise [market] is virtualized," according to Rosier. That leaves 83% of enterprises that do not run virtualized servers and might be tempted by IBM's offerings. He said that many companies need bare-metal servers, and IBM's mix of real and virtual servers in a box will be attractive.
Dennis Quan, the director of development for IBM's autonomic computing division, said it is trying to leverage the gap between old and new. He said IBM's already tied into "decades' worth of infrastructure" that's grown resistant to change but that the need for capacity is exploding. "By 2011 there's going to be 10 times the amount of data there is now," he said. He added that in order to keep up, "standardization is going to be key," and IBM's pre-rolled, standards-compliant cloud packages will ease customers into cloud computing gently.
Quan cites the work IBM has put into service-oriented architecture compliance and monitoring and management so that customers can plug into existing governance models without extra work. "The economics behind these new service models are very, very real." he said.
IBM's existing cloud products under its Smart Business marquee include the following:
- IBM Smart Market, a portal service to compare and manage different business applications that run in IBM's cloud environment.
- IBM Smart Cube, an all-in-one appliance that has networking, storage, and office software built in.
- IBM Smart Desk, a dashboard software package that lets users manage applications and services from the aforementioned Market and Cube.