IBM Ranks First in IDC Enterprise Cloud Survey
IBM Ranks First in IDC Enterprise Cloud Survey
IBM came out as the top cloud computing provider to businesses, according to a recent survey from research firm IDC.
The survey showed that when it comes to infrastructure as a service (IaaS), businesses ranked IBM as the No 1 provider—beating out competitors such as Cisco, Amazon and Google.
Enterprises ranked Cisco as second, HP third and AT&T fourth, according to IDC. Google came in fifth, Microsoft sixth and Amazon seventh.
The rankings are based on responses from more than 400 U.S.-based companies with more than 1,000 employees. The survey results are based on customer ratings, rather than the number of users or sales.
For the survey, cloud providers were rated on their quality of service for availability, speed of provisioning, simplicity and overall cost. IBM's IaaS platforms include IBM's SoftLayer technology, acquired for $2 billion in July 2013, and IBM Cloud Managed Services.
According to the study, buyers selected IBM as their top overall preference among providers they believe can most effectively provide IaaS, whether private or public. IBM was the leading cloud vendor with 35 percent of first-place votes. By comparison, Amazon carried 13 percent, Microsoft and Google came in around 16 percent.
"We believe this new IDC report based on actual client preferences underscores IBM's overall leadership in cloud computing," Jim Comfort, general manager of cloud services for IBM's Global Technology Services group, said in a statement. "IBM is investing billions in cloud to serve clients with the most comprehensive portfolio in the industry across infrastructure, platform and software as a service.
"We are expanding our global data center footprint, opening our software to the cloud for developers and making cloud services easily accessible through an online cloud marketplace," he continued. "Enterprises trust IBM to manage their business transformation, operations and processes as they move into the future—hybrid cloud era."
IDC ranked IBM as the leader in six of eight major industries covered in the study including financial services, manufacturing, health care, professional services, wholesale and retail, and the public sector or government. IBM also finished in the top three in transportation and telecommunications.
Moreover, more than half of the respondents (52 percent) indicated a strong preference for full-service providers such as IBM for their broad capabilities—professional services, consulting systems integration, custom software development and testing—needed to support buyers moving to cloud services. Less than 5 percent of respondents preferred their vendor to be an online service provider such as Amazon or Google.
IBM has targeted cloud computing as one of its key growth areas as the company continues its transition to higher-value businesses and divests itself from lower-margin businesses like PCs and x86-based servers.
"In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas, including cloud, big data analytics, social, mobile and security," Ginni Rometty, IBM chairman, president and CEO, said in a statement following IBM's first-quarter earnings announcement.
IBM Ranks #1 in Enterprise Cloud Survey: IDC
During the first-quarter earnings call, IBM Senior Vice President and Chief Financial Officer Martin Schroeter further addressed some of the moves the company has made in the cloud recently.
"In the quarter, we announced a $1.2 billion investment to globally expand our SoftLayer cloud hubs," he said. "We launched BlueMix, our new platform as a service to speed deployment of hybrid clouds. We acquired both Aspera and Cloudant to extend our capabilities in big data and cloud."
Citing IBM's strategy for taking advantage of new trends, Schroeter cited major shifts in the industry "driven by data, cloud and changes in the way individuals are engaging."
He noted, "This quarter we had good performance in our offerings that address these shifts. Our business analytics revenue was up 6 percent at constant currency on a large base. Our cloud revenue was up over 50 percent, with doubling of our cloud 'as a service' business, and we had strong growth in mobile and security."
Meanwhile, IDC said survey respondents were evenly divided among companies in three size categories: 1,000-4,999 employees, 5,000-9,999 employees and 10,000-plus employees. Companies with fewer than 5,000 employees showed the highest share of respondents ranking full-service providers such as IBM as their top selection of business model options from which to procure cloud services.
Overall, U.S. buyers gave cloud service providers strong ratings, according to the IDC study. This applies to providing cloud services most cost-effectively and meeting quality-of-service expectations involving availability, speed of provisioning and simplicity of service provisioning, IDC said.
IDC researchers also concluded that, to be successful in the future, cloud service providers must build to where the "puck will be," which IDC analyst Frank Gens said IBM is doing.
In a note to clients in July 2013, Gens wrote that IBM is "skating to where the puck will be. ... with strong performances in its cloud, business analytics and Smarter Planet growth initiatives." Gens advised IBM to "skate faster" to accelerate its ability to compete in the public cloud space with its then-new SoftLayer acquisition. Since Gens' analysis, IBM reported cloud revenue of $4.4 billion for 2013 and a cloud growth rate of 50 percent for the first quarter. However, a first-quarter decline in hardware sales and other factors caused IBM's earnings to drop for the period.
Ultimately, IDC's new report concludes that players competing in the cloud services market will need to build to the end-state structure of a cloud service provider business model that resembles the automotive factory model of services delivery involving a robust ecosystem, localized app store, integrated digital services supply chain and a "cloud factory" consisting of PaaS, testing as a service (TaaS), IaaS and SaaS.
In the first four months of 2014, IBM announced its $1.2 billion investment to grow its global cloud footprint to 40 data centers in every major financial center and a $1 billion investment to open its enterprise software to the cloud to allow developers to create new applications for the hybrid cloud era on BlueMix. During the same period, Big Blue said it was launching an IBM Cloud marketplace to provide easy access to the company's cloud services for individuals across the enterprise from IT operations, line-of-business and application development.