IBM Unveils Cloud-Computing Initiative Aimed At Large Companies
April 07 2011 - 4:12PM
Dow Jones News
International Business Machines Corp. (IBM) unveiled new
software to help large companies move some of their operations onto
the Internet, the latest move by the technology company to
capitalize on the fast-growing trend of cloud computing.
IBM on Thursday announced a new service--dubbed
"Smartcloud"--that will enable clients to use a Web-based interface
to install applications and configure databases on a platform
provided by the company. The initiative is part of IBM's push to
expand into the cloud, one of the fastest growing areas in
information technology.
IBM's move further highlights how businesses are showing a
greater interest in cloud computing, which enables more
cost-efficient access to computer servers and data storage over the
Internet and internal networks. Cloud computing has become a
catch-all term associated with the savings gleamed from moving
applications online as opposed to buying and managing software and
physical equipment.
IBM has said it expects cloud computing to grow into a $7
billion business by 2015. The company hasn't disclosed how much of
its revenue currently comes from cloud computing, but the company
has said its cloud revenue doubled in 2010 and is expected to
double again this year.
"We're already in the billion-dollar club today," Steve Mills,
IBM senior vice president and group executive of systems and
software, said in an interview with Dow Jones Newswires.
Data tracker In-Stat LLC has said U.S. spending on cloud
computing and managed hosting should surpass $13 billion in 2014,
up from less than $3 billion in 2010.
IBM is attempting to differentiate itself from some of the main
players who have already made big bets on the cloud. Competitors
such as Amazon.com Inc.'s (AMZN) Web Services, Microsoft Corp.
(MSFT) and Google Inc. (GOOG) employ cloud features that let
customers pay for what they use, like a utility, as opposed to
plunking down a fixed investment.
IBM says its offering includes more features aimed toward large
enterprise customers, such as heightened security, data privacy and
the ability to certify the system for regulatory requirements.
Moreover, IBM is offering a plethora of options, including public,
private and hybrid clouds.
"This is a strong advance among several in the industry for
helping enterprise IT take advantage of cloud technologies and new
cloud business models," said Frank Gillett, a vice president and
principal analyst at Forrester Research Inc. "IBM's announcement
isn't unique, but it's a good step forward."
A typical client would spend tens of thousands of dollars a
month on the new offering, IBM's Mills said, though the amount will
vary based on what services the customer is using.
"There's no reason why (companies) couldn't move some fairly
significant production work (to the cloud) and literally start to
spend hundreds of thousands or even millions a month," he said.
The unveiling of IBM's SmartCloud, however, comes amid ongoing
concerns surrounding security and reliability of the cloud as well
as the ability to integrate current infrastructure with new cloud
services
"This announcement offers customers more flexibility to address
different issues and concerns within the cloud," said Joseph
Foresi, an analyst at Janney Montgomery Scott LLC.
IBM joins a host of tech companies who have recently made big
cloud announcements. Earlier Thursday, Dell Inc. (DELL) said it
will invest $1 billion worldwide in the current fiscal year to
build new data centers and develop sets of products in areas such
as virtualization. The spending is part of Dell's effort to expand
its business outside of computer hardware.
Last week, Rackspace Hosting Inc. (RAX), Dell and Equinix Inc.
(EQIX) said they have collaborated to develop an open-source
cloud-computing platform--called OpenStack--which is aimed to
compete against Amazon Web Services.
Last month, Hewlett-Packard Co. (HPQ) Chief Executive Leo
Apotheker outlined plans to roll out new cloud-computing services
over the next few years that he hopes will become a one-stop shop
for businesses and consumers to store and retrieve data over the
Web.
-By Steven Russolillo and Shara Tibken, Dow Jones Newswires;
212-416-2180; steven.russolillo@dowjones.com
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