IBM Invests $1.2B in Cloud Infrastructure

By Darryl K. Taft  |  Posted 2014-01-16

IBM Invests $1.2B in Cloud Infrastructure

IBM has pledged to commit $1.2 billion to significantly expand its global cloud footprint, beefing up its SoftLayer infrastructure and other components.

Big Blue said the investment includes a network of cloud centers designed to bring clients greater flexibility, transparency and control over how they manage their data, run their business and deploy their IT operations locally in the cloud.

In 2014, IBM plans to deliver cloud services from 40 data centers worldwide in 13 countries and five continents globally, including North America, South America, Europe, Asia and Australia. Among the newest IBM cloud centers to launch are Washington, D.C., Hong Kong, London, Toronto, Japan, India, China, Canada, Mexico and Dallas.

This global expansion is aimed at accelerating into new markets based on growing client demand for high value cloud. With this news, IBM now plans to have four or more data centers in all major geographies including Europe, Latin America, Asia and the Americas with plans to expand in the Middle East and Africa in 2015.

"IBM is continuing to invest in high-growth areas," said Erich Clementi, senior vice president of IBM Global Technology Services, in a statement. "Last year, IBM made a big investment adding the $2 billion acquisition of SoftLayer to its existing high-value cloud portfolio. Today's news is another major step in driving a global expansion of IBM's cloud footprint and helping clients drive transformation. IBM recognizes the universal need to deliver mission-critical workloads in a cloud environment that are secure, reliable and built on open standards as contrasted with the commoditized cloud model that emphasizes low costs, instead of business growth and innovation."

By some estimates, the global cloud market is set to grow to $200 billion by 2020; driven largely by enterprises and government agencies deploying cloud services to market, sell, develop products, manage their supply chain and transform their business practices. As more data moves to the cloud, nations and territories worldwide are adopting data management laws to protect personal data held by both government and private companies. In fact, about 100 nations and territories have already adopted laws that dictate how governments and private enterprises must handle personal data, IBM said.

The new cloud investments IBM is making will help it meet client needs for choice, compliance and data residency as they increasingly leverage cloud computing to drive business transformation. Specifically, IBM will open up to 15 new data centers worldwide, totaling 40 data centers worldwide, doubling SoftLayer's cloud capacity and accelerating its presence in major markets and financial centers worldwide while helping clients build, manage, monitor and integrate the next generation of IT powered by cloud.

This move solidifies IBM’s plan to establish SoftLayer as the foundation of its cloud portfolio. The SoftLayer infrastructure will provide a scalable, secure base for the global delivery of cloud services spanning IBM's middleware software and solutions. SoftLayer's global network will also facilitate faster development, deployment and delivery of mobile, analytic, social solutions as clients adopt cloud as a delivery platform for IT operations and manage their business.

IBM Invests $1.2B in Cloud Infrastructure

An expanded global cloud footprint will help IBM clients improve data governance capabilities and comply with local market and country regulations such as HIPAA and Sarbanes-Oxley (SOX) more efficiently. Further expanding its global cloud network, IBM will provide more vendor choice for clients as well as delivery options, including bare metal cloud instances

With these global data centers IBM SoftLayer is able to deliver high performance services to locales across the globe quickly. SoftLayer's high performance private network also makes it possible to build global applications that do not require or use the public internet to connect to servers that sit in multiple countries and helps avoid any disruptions caused by other traffic on a public network.

This builds on SoftLayer's founding principal of creating a global Infrastructure as a Service (IaaS) platform that is widely distributed to mitigate any potential downtime for clients. These data centers distributed across the globe enable clients to pick which data center they want services in, and all services are available in all data centers.

Since its acquisition in 2013, IBM SoftLayer has served nearly 2,400 new cloud clients. IBM’s cloud investments to date, including SoftLayer, have made it easier and faster for clients around the world to adopt cloud computing. With these new investments, IBM will be able to meet growing client demand for high value dynamic cloud capabilities while building towards its goal of achieving $7 billion in annual cloud revenue by 2015, company officials said.

IBM cloud customers include born-on-the-Web firms such as Cloudant, SilverSky and Green Status Pro as well as enterprises such as Ameriprise Financial, AT&T, Honda Motors, Pacific Gas & Electric, L'oreal, Grupo Zurich, Rent-a-Center,  Visa, the US Open and UniCredit.

One client, Virgin Atlantic, has used IBM's cloud-based SaaS marketing solutions to improve its relationship with customers through better website design choices that convert increased interest into more bookings, IBM said. As a result, the airline has seen a 10 percent increase in flight books and a 7 percent increase in average booking value.

IBM has served more than 30,000 cloud customers and has more than 100 cloud SaaS solutions, thousands of experts with deep industry knowledge and a network of 40 new centers worldwide global cloud delivery centers.

Since 2007, IBM has invested more than $7.5 billion in 18 acquisitions  to accelerate its cloud initiatives and build a high value cloud portfolio. IBM holds 1,560 cloud patents focused on driving innovation. In addition, IBM processes more the 5.5 million client transactions daily through the company’s public cloud.

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