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IBM Forecasts $7 Billion In Cloud Revenue

The firm is plunging fully into the cloud, launching a range of cloud services tuned to the needs of enterprise users.

Senior VP Steve Mills will flesh out IBM's cloud computing strategy at an event in San Francisco Thursday, emphasizing IBM's vision of recognizing "client defined clouds" and cloud resources customized for individual customers.

Cloud computing is no longer an area of investigation and experiment for IBM. CFO Mark Loughridge has stated he believes cloud services will generate $7 billion in revenue for IBM by 2015.

It's basing its approach on its interactions with existing customers, such as FritoLay, American Airlines, and IndiaFirst, over the last four years. "The cloud is not one thing, one size fits all," said Ric Telford, VP of cloud services, in an interview Wednesday in advance of the event.

"Over the last few years, there's been a lot of tire kicking. Then you get to the more mainstream adoption. We feel we are entering that wave of computing now," he said.

That means, in addition to offering basic cloud infrastructure, IBM will offer services to help customers build their on-premises, private clouds or integrate their data center operations with external cloud suppliers. It expects the IBM cloud to be primary target of such efforts, but doesn't rule out using its expertise in integration to connect to Amazon EC2, Rackspace, or other public cloud suppliers, said Telford.

That's because it's been warned repeatedly by enterprise customers that they do not wish to encounter another round of vendor lock-in when they move to cloud computing. "One of the inhibitors to adopting cloud computing is the possibility of being locked into proprietary interfaces," Telford noted.

To emphasize its above-the-fray stance, IBM is launching a Cloud Standards Customer Council to define requirements and "influence the existing standards bodies," Telford said. Potential targets for its guidance include the DMTF, which set the Open Virtualization Format for virtual machine portability, and the Open Group, a vendor body that set the SOA Reference Architecture.

In terms of its own offerings, IBM will emphasize the ability of customers to define what type of cloud service they want, rather than offering an Amazon-like approach of, "Here's our infrastructure. Come and use it as is."

"We've seen Amazon go after a different kind of customer. We're dealing with the enterprise customer," claimed Telford. At the same time, he said IBM is mindful that Amazon Web Services, the business unit responsible for EC2, has set the bar on what cloud suppliers can charge. "Our basic pricing will be similar to what you see at Amazon," but IBM will add charges for its enterprise oriented services on top of those prices, he acknowledged.

Customers will choose one or more of five dimensions that IBM will offer as a way of allowing the customer to define his own cloud service. If a customer wants a secure cloud, IBM says it will deliver it. If the customer wants a high-performance, supercomputer type of service, IBM will deliver that. If it wants a closely monitored and managed cloud, IBM will provide that type of service too, Mills is expected to claim at the San Francisco event.

An IBM document allows customers to calculate monthly charges based on the cloud services they want.

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Roman K.
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Roman K.,
User Rank: Apprentice
12/15/2011 | 3:16:36 PM
re: IBM Forecasts $7 Billion In Cloud Revenue
Cloud is indeed a very exciting topic and IBM is not the only vendor in the field. I have posted a brief comparison of the IBM and Oracle cloud offerings (SaaS, PaaS and IaaS) here: http://smarterquestions.org/20...
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