As more enterprise IT shops embrace shifting critical workloads to the cloud, Big Blue may finally be flexing its...
Users' growing acceptance of IBM's cloud initiative is building, based on an increasing number of deals with larger enterprises and industry observations. A big factor in this momentum is that a handful of the company's cloud-based technologies now work better in concert with each other. These include its data analytics software, Bluemix cloud application development platform, and even IBM Watson -- all of which now operate with SoftLayer cloud platform.
"We have a lot invested in their legacy hardware and software for quite some time," said one project manager with a large transportation company in northern Florida who requested anonymity. "I like the story from them [about SoftLayer] because it gives us more options to pursue with cloud, like bare-metal, that can improve the performance of some of the data-intensive apps we have."
IBM came out of the blocks slowly with its first cloud initiatives several years ago and has mostly trailed market leaders Amazon Web Services, Microsoft and Google. But as its legacy hardware and software business continues to sag, the company has gradually focused more of its existing and new cloud applications and tools around SoftLayer -- and some believe IBM can offer corporate users a more compelling cloud narrative.
"They are selling more [products and services] on top of SoftLayer, which has allowed them to make progress with a legitimate cloud strategy," said Carl Brooks, an analyst with 451 Research. "They might be able to put out some of the engine fires they had with that business."
IBM gaining new cloud users
Earlier this year, Halliburton, a service provider to the oil and gas industry, implemented IBM's cloud platform to run its reservoir simulation software designed to help the company better understand how complex oil and gas fields might behave given different development scenarios.
Using the CPU, GPU and storage capabilities of IBM Cloud, which were delivered as a service, the company can now run through hundreds of simulations that help it better forecast the potential of complex oil and gas fields, using both bare-metal and virtual servers.
Carl Brooksanalyst, 451 Research
Using both kinds of servers gives Halliburton more flexibility to scale compute power up and down depending on customers' requirements, as well as switch from a Capex to an Opex model, company officials said. The company also worked with IBM to set up a compute cluster in the IBM Cloud that was then connected to Halliburton's global network.
"We knew the more computing power we had, the more efficient a job we could do," said Steven Knabe, Halliburton's regional director for consulting for Latin America. "With the cluster, we can build and run much more complex simulation models and increase our chances of winning projects [more] than we had before."
Another new IBM Cloud customer is JFE Steel Co., one of the largest steel makers in the world, which inked a five-year agreement last month to migrate its core legacy systems to the IBM Cloud while also consolidating its infrastructure. The Japan-based company will deploy SoftLayer as its cloud infrastructure, along with IBM's Cloud Orchestrator to automate cloud services and Control Desk for IT management services.
Driving the company's decision was a need to establish a more efficient business model, which meant swapping in a more flexible IT infrastructure to more quickly adjust to market changes brought on by rapidly declining steel prices.
"The company realized it had to modernize its IT infrastructure to take advantage of some new business processes and modernize the business," said Charles King, president and principal analyst with Pund-IT. "But it didn't want to pay a lot up front to do that, and IBM Cloud gave them a way forward to get all that underway."
King also believes IBM has done a better job at winning over both existing and new IT shops to its cloud strategy, not just because of SoftLayer, but its investment in its now 48 data centers around the world. These data centers are used not just for hosting but also for joint development of cloud-based software between IBM engineers and local developers.
"You have to give them credit for the considerable amount of money spent in expanding their cloud data centers," King said. "That sort of global footprint helps when reaching out to new [cloud] customers like JFE."
User cloud confidence grows
Many corporate users are more confident to move generous chunks of their business anchored on premises to the cloud -- and that helps IBM's cloud initiative as well as those of all its major competitors. Decade-long fears about the lack of reliability and security of mission-critical data and applications in the cloud appear to be melting away.
"The enterprise three years ago was new for us, from a SoftLayer perspective," said Marc Jones, CTO and IBM Distinguished Engineer for IBM Cloud. Now, though, enterprises are not only more open to actually bringing those workloads to the cloud, but it's a first-choice destination for their applications and services. "Before, it was a lot of research and, 'Could I, would I?' But now, it's, 'Let's go,'" he said.
Some analysts believe the industry is rapidly approaching a tipping point in the widespread adoption of cloud computing to where it becomes the primary way IT shops conduct business.
"Enterprises are now more comfortable with cloud computing with on-demand infrastructure and servers replacing colocations," 451 Research's Brooks said. "These [IBM deals] reflect the mainstreaming of cloud computing, more than any particular pizazz on the part of IBM."
Further indication that cloud adoption is reaching a tipping point is the heightened interest among resellers and business partners of top-tier vendors. In many cases, it's the channel, not the vendors, directly selling and servicing a range of cloud computing offerings to IT shops.
"Mainstream IT computing is partaking of [Amazon Web Services] and Azure in ways it was not two years ago," Brooks said, "and they don't want to do it all themselves. They want the people in the middle [resellers] to do it for them and IBM is picking up on this trend."
Ed Scannell is a senior executive editor with TechTarget. Contact him at firstname.lastname@example.org.
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