IBM Partners See Growth In Big Blue's $1.2B Cloud Investment

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Mid-market IBM partner Tom Hughes, director of alliances for the Technology Solutions Group at Ciber, a Greenwood Village, Colo.-based IBM partner, said IBM's cloud investment will have an uncertain impact on his business. "It all depends on how closely SoftLayer and these data centers fit into IBM's current cloud offerings. As an IBM partner, I haven't yet seen the benefits of the SoftLayer acquisition. I'm going to have to reserve judgment until IBM does a better job in communicating what those benefits will be," he said.

IBM's doubling down on SoftLayer comes as it winds down its existing cloud offering SmartCloud Enterprise, which is slated to be phased out the first quarter of 2014. SoftLayer is IBM's answer to rivals Amazon Web Services and Microsoft.

IBM has stated it believes the global cloud market will be worth $200 billion by 2020, and it expects to do $7 billion in cloud revenue by 2015. In its most recent reporting period, IBM earned $1 billion in cloud-related revenue -- with about half going directly to cloud services and the other half toward software and services supporting the cloud.

"To stand still in cloud in this market is to fall behind," said Laura DiDio, an analyst with Information Technology Intelligence. "This is a very pragmatic move by IBM that signals to customers and business partners that hitching their wagon to IBM is going to be something they can count on for the years ahead."

The new cloud centers will be in Washington D.C., Mexico City, Dallas, China, Hong Kong, London, Japan, India and Canada, with plans to expand in the Middle East and Africa in 2015. IBM said the 15 new data centers will bring the company’s total cloud footprint to 40 locations in 13 countries. SoftLayer CEO, Crosby said that 13 of those 15 data centers will be SoftLayer data centers.

Smaller IBM partners, selling traditional IBM solutions, are less excited but say they are eager to learn more as they transition their customers off hardware to cloud services.

"More and more of my customers are eager to convert their IBM’s hardware into cloud services," said Debbie Fitzerman, president of DFC International Computing, a small Toronto-based SaaS provider and IBM partner. "With data centers in Canada, that's one less data-privacy hoop I have to jump through."


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