IBM's Cloud Conflict of Interest - InformationWeek

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Commentary
12/2/2008
10:29 AM
David Linthicum
David Linthicum
Commentary
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IBM's Cloud Conflict of Interest

I have no issue with IBM driving into the world of cloud computing - I figured it would. But just think about the larger hardware and software players - such as IBM and Microsoft, who are now moving toward the cloud - and the potential conflicts that could occur. In essence, your cable TV provider is offering to show you how to move to Satellite TV.

Well, I knew this announcement was going to happen.

"Today, IBM announced new cloud computing services to help businesses of all sizes take advantage of this increasingly-attractive computing model. With today's announcements, IBM is applying its industry-specific consulting expertise and established technology record to offer secure, practical services to companies in public, private and hybrid cloud models."

I have no issue with IBM driving into the world of cloud computing - I figured it would. But just think about the larger hardware and software players - such as IBM and Microsoft, who are now moving toward the cloud - and the potential conflicts that could occur. In essence, your cable TV provider is offering to show you how to move to Satellite TV.Now IBM (IBM Global Services, really) is looking to assist the Global 2000 in moving toward cloud computing, and I cannot help but see the underlying issue here. Indeed, the more successful IBM is in moving clients to cloud computing, the less the enterprise data center is needed. This results in reduced sales for enterprise hardware and software vendors, specifically from, well, IBM. Thus, if you take this to its logical conclusion, IBM's successful cloud computing efforts will result in hurting the other side of the business. I would love to be in the board rooms as this is discussed among the profit centers.

Not to pick on IBM; Microsoft is really in the same boat. With the appearance of Azure, its new cloud platform, the company is, in essence, replacing many Microsoft-driven servers with clouds. Perhaps this is a result of the realization that cloud computing is coming, so you might as well accept it. Or, is it a result of the need to control the clouds, as much as you can, to manage the loss of enterprise IT infrastructure revenue? You can toss Oracle into the mix here as well, although its cloud strategy is not as well formed.

I think the business driver here is that IBM sees cloud computing coming no matter what it does. The company is looking to capitalize on the movement, and perhaps find something growing in a world where IT budgets are shrinking. I get that. However, the paradox is that, if it is successful, there will be a much reduced need for core IT infrastructure products, and perhaps that leads to a conflict of interest.

Of course I've had these arguments with the consulting arms of larger IT technology vendor executives for decades, and they all swear that they are only interested in the needs of the clients, and are technology agnostic. However, generally speaking, I've found that these people act in the best interests of their employer. Were I working for the company, I would expect nothing less.

So, it will be interesting to see how this all plays out. I think IBM is jumping on the bandwagon, and at this point it's not much more than that. However, this cloud stuff is not going away, and with the growth of the service providers such as Amazon and Force.com, there will be slower or contracted growth within the traditional hardware and software vendors, if logic follows. It will be tough to sit on both sides of the fence, without your loyalties going one way, or the other.I have no issue with IBM driving into the world of cloud computing - I figured it would. But just think about the larger hardware and software players - such as IBM and Microsoft, who are now moving toward the cloud - and the potential conflicts that could occur. In essence, your cable TV provider is offering to show you how to move to Satellite TV.

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