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IBM has opened four new cloud data centers to advance its enterprise cloud strategy and expand its cloud footprint to 60 cloud data centers in 19 countries.
The new cloud data centers include two in London, one in San Jose, Calif., and one in Sydney. While IBM is promoting the expansion of its cloud to meet demand from customers looking for help with cognitive and big data workloads, the company also is using the expansion to distribute some of its new services and capabilities, including serverless technology, containers and microservices.
"We're seeing a strong shift from clients who were developing with containers and are now putting them into production," said Jason McGee, vice president of IBM's cloud platform. "As clients adopt containers, there is a desire to keep that data within their local borders. We recently expanded our cloud footprint in Sydney, with a new data center to help meet this demand, and have already seen a strong interest across Australian industries in exploring and adopting containers within this cloud data center."
Improved services with enhanced IaaS
Rhett Dillingham, senior analyst for cloud strategies at Moor Insights and Strategy in Austin, Texas, said he believes the new data centers improve IBM's infrastructure-as-a-service (IaaS) capabilities on which its customers can use the overall IBM Cloud platform, including the Bluemix platform as a service. This includes capabilities such as Kubernetes, with the Istio service mesh, and OpenWhisk services, including for microservices, where those applications can benefit from the expanded IaaS with enhanced high availability, he said. An example of this is when Kubernetes is enabled to deploy container instances of an application across multiple local data centers.
Jason McGeevice president of IBM's cloud platform
"While IBM has delivered competitive cloud platform capabilities, including OpenWhisk serverless and Kubernetes services for container- [and] microservices-based applications, it has been slow to mature its underlying cloud infrastructure offering to be feature-competitive with the leading IaaS providers," Dillingham told TechTarget.
"One area where it has been able to distinguish its IaaS offering has been its extensive global footprint. These new cloud data centers are scaling its existing geographic presence not just for more elastic capacity for customers, but to better allow for high-availability application deployment across data centers by customers, which is a critical capability to increasing enterprise adoption," Dillingham continued. "It is a strong sign of IBM's continued IaaS investment and the likelihood of further improvements coming to its IaaS capabilities."
Cloud a bright spot for IBM
Indeed, as indicated by the company's second-quarter 2017 results, which were announced on June 18, the IBM Cloud is a bright spot for Big Blue. IBM's cloud revenues grew 17% during the quarter, and its as-a-service offerings grew 32%. The company claims total cloud revenue of $15.1 billion over the last 12 months, with $8.8 billion in revenue for its as-a-service offerings.
For instance, during the quarter, IBM expanded a cloud partnership with American Airlines that was initiated last year as a cloud transformation project. Under the expanded deal, American Airlines will migrate some of its applications to the IBM Cloud, including aa.com, its customer-facing mobile app. In addition, the airline's global network of check-in kiosks, as well as other workloads and tools, such as the American Airlines Cargo customer website, will also be moved to the IBM Cloud.
"In selecting the right cloud partner for American, we wanted to ensure the provider would be a champion of Cloud Foundry and open source technologies so we don't get locked down by proprietary solutions," said Daniel Henry, American Airlines' vice president of customer technology and enterprise architecture, in a statement. "We also wanted a partner that would offer us the agility to innovate at the organizational and process levels and have deep industry expertise with security at its core."
However, although IBM beat Wall Street earnings estimates, the company still saw its 21st consecutive revenue decline. Yet, Big Blue officials are counting on the company's "strategic imperatives" to help to turn IBM around. IBM's strategic imperatives are analytics, cloud, security, mobile and social.
"Over the last 12 months, revenue from our strategic imperatives was up 12% to over $34 billion, and now represents 43% of IBM," said Martin Schroeter, IBM's senior vice president and CFO, during the company's earnings webcast.
IBM maintains enterprise, international focus
"In the second quarter, we strengthened our position as the enterprise cloud leader and added more of the world's leading companies to the IBM Cloud," said Ginni Rometty, IBM's chairman, president and CEO, in a statement.
To be sure, the enterprise focus of IBM Cloud is another critical point, said Charles King, principal analyst with Pund-IT.
"Developing enterprise-class solutions and fully supporting those customers' requirements is something other cloud players are coming to rather late in the game," he said. "This is not to knock the efforts of Amazon, Microsoft, Google and others -- there's no reason that they can't or won't be able to develop solid enterprise solutions. But that point has been central to IBM Cloud from the beginning and also reflects an elemental understanding of enterprise businesses that is deeply ingrained in IBM's DNA."
Market research firm IDC projected worldwide spending on public cloud services and infrastructure will grow to $266 billion in 2021, as companies take their cloud deployments global. IBM has committed to meet all international data privacy and security standards for its cloud infrastructure services.
"Seventy percent of Bitly's traffic is international -- we see 9 billion clicks a month and just under 7 billion of them come from outside the United States," said Rob Platzer, CTO at Bitly, in a statement. Thus, the ability to access IBM's global network of cloud data centers, which are all connected by a high-speed fiber network, is important to Bitly, he noted.
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