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IBM invests $1.2 billion in global data centre network

ibm-cloud-computingIBM today announced plans to commit $1.2 billion (£730 million) to expand its global cloud footprint through a number of new data centres set to open this year.

The company said it will use the money to open up to 15 new data centres, bringing IBM’s worldwide data centre count up to 40 across 13 countries.

The location of the new centres was not specified, but IBM did say it will be launching “cloud centres” in London, Washington D.C., Hong Kong, Toronto, Japan, India, China, Canada, Mexico and Dallas.

The company said the cloud expansion will ensure that IBM has at least four data centres in Europe, Latin America, Asia and the Americas, adding that it plans to expand in the Middle East and Africa in 2015.

IBM believes the global expansion will help it accelerate into new markets where the company has seen growing client demand for high value cloud.

IBM also plans to integrate the cloud platform provided by recently-acquired SoftLayer into its wider cloud portfolio, revealing that the investment will go towards doubling the amount of cloud capacity available on SoftLayer, which already supports 130 million online gamers after IBM signed deals with games developers Multiplay and KUULUU.

Indeed, SoftLayer will also become the “foundation” of IBM’s varied cloud portfolio, meaning that the SoftLayer infrastructure will provide the base for the global delivery of cloud services spanning IBM’s middleware software and solutions.

IBM said the new data centres will enable SoftLayer to provide high performance services to customers across the globe quickly as they won’t have to wait for servers several countries away to respond to clicks.

“IBM is continuing to invest in high growth areas,” said Erich Clementi, Senior Vice President, IBM Global Technology Services. “Last year, IBM made a big investment adding the $2 Billion (£1.22 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 recognises 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 commoditised cloud model that emphasises low costs, instead of business growth and innovation.”

Through the acquisition of SoftLayer, IBM is aiming to compete with several other companies in the infrastructure-as-a-service market, namely market leader Amazon Web Services, but also firms like Microsoft, Google and Rackspace.

John Dinsdale, Chief Analyst and Research Director, Synergy Research Group, said, “AWS remains in a league of its own. IBM/Microsoft/Google all have to work very hard just to keep up in a market which is growing so rapidly. IBM is working very hard, and acquiring SoftLayer made a difference, but it remains a fraction of the size of AWS in this market. IBM’s third quarter 2013 revenues (which now includes SoftLayer) equated to only 22 percent the size of AWS revenues.

“IBM will argue, with some justification, that its overall cloud business has a much broader scope than AWS and that if its other cloud service revenues are taken into account it is much bigger.However, that is almost irrelevant in terms of competition with AWS. AWS is not active in those other cloud service areas for good reasons. IBM may choose to be active in a broad range of IT service areas but AWS is focusing on those where it can be a dominant player.”

Last week, IBM announced that it was investing $1 billion into the new Watson Group, which includes a new Watson headquarters in New York City’s “Silicon Alley” and $100 million to support start-ups that are building cognitive apps through the Watson Developers Cloud.



Originally published on Techworld.com. Click here to read the original story. Reprinted with permission from IDG.net. Story copyright 2018 International Data Group. All rights reserved.
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