IBM SoftLayer CEO: Cloud Pricing Not Going To Zero, Enterprise Clouds Will Eventually Win


SoftLayer CEO Lance Crosby isn't a big fan of the public cloud price war that Amazon, Google and Microsoft are waging in order to lure customers and build market share.

In fact, he seems to consider cloud vendors' preoccupation with undercutting each other's pricing to be something of a distraction.

"Cloud prices can't go to zero -- I hope everyone understands that," Crosby said at the GigaOm Structure conference in San Francisco Wednesday.

Instead of choosing the least expensive clouds, enterprises should aim to harness the power of the cloud to build innovative products and services, according to Crosby.

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"I often tell CIOs: You need to use the cloud to create your own disruptive technology, before someone else does it for you," Crosby said at the event.

SoftLayer, which IBM acquired for $2 billion in a deal that closed 11 months ago, got its start in the managed hosting space. This background, Crosby said, gives SoftLayer an intimate understanding of enterprises' needs.

"We're focused on security and control and transparency, and we're much different than Amazon and Google and Microsoft," Crosby said at the event. "Enterprises love our feature set and competitors are trying to keep up."

This is by no means a new message for IBM. Chairman and CEO Ginni Rometty echoed Crosby's remarks in an interview with CNBC last month, and IBM launched a marketing campaign last fall that highlights SoftLayer's advantages over Amazon Web Services.

One potentially important advantage for SoftLayer is its full support for IPv6, which is something Amazon, Google and Microsoft don't yet have. The need for more unique IP addresses is especially important for the Internet of Things and the coming deluge of web-connected devices.

SoftLayer's cloud is well-positioned to handle the computing demand of social, mobility and the Internet of Things, Crosby said. And for the latter, things are just getting started, he said.

FitBit, a SoftLayer customer, makes a popular activity tracker today. But in the future, FitBit's data-gathering capabilities, combined with SoftLayer's cloud, could impact the health-care market, said Crosby.

Crosby related a scenario about one longtime IBM customer, an appliance maker, that came to SoftLayer wanting to hook up its refrigerators to the net. Crosby suggested they go beyond that to put bar code readers and cameras in the refrigerators, to gather data about what people eat and how fast.

While Amazon, Microsoft and Google would argue that their clouds are just as capable as SoftLayer's for handling this type of computing, Crosby said his cloud is the best for enterprises.

But if customers want to get this type of power from SoftLayer, it doesn't look like they'll be getting it at a discount.

PUBLISHED JUNE 19, 2014