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IBM Commits $1 Billion to New Cloud Effort

By TC Doyle
February 25, 2014 - News

Want people to believe you’re serious about something? Then commit $1 billion to it.

That’s what IBM did this week as part of a flurry of announcements that strengthen its hand in cloud computing and showcase its momentum with the new technology.

IBM unveiled new investments totaling more than $1 billion for software cloud development and new capabilities for SoftLayer, the cloud computing infrastructure technology that the company acquired last July. As part of its efforts, IBM said it will enable enterprise developers to make their products available in the cloud, integrate its technologies to work across different enterprise environments, and develop an open ecosystem and platform for development that “accelerates innovation and fosters growth."

The New York Times said the new effort to move its business software to the cloud represented “one of the most significant moves IBM has yet made in cloud computing, and shows the resolve of Virginia Rometty, chief executive of IBM, to remake her company for a world of cloud computing, sensors and mobile technology."

Separately, IBM announced plans to buy privately held database-as-a-service (DBaaS) provider Cloudant, which will extend IBM's capabilities in Big Data and Analytics, Cloud Computing and Mobile offerings, according to the company.

The moves are part of a significant effort underway this week in Las Vegas, where IBM hosted an event for key customers and partners. In Las Vegas, the company took pains to showcase its progress to date. For example, IBM said its broad set of cloud capabilities in private, public and hybrid clouds, as well as infrastructure-as-a-service, platform-as-a-service and software-as-a-service-based solutions, produced $4.4 billion in revenue for IBM in 2013, up a whopping 69 percent year-over-year.

Also this week, the company detailed the gains that IBM customers have made by using IBM cloud technologies. Deals with Turk Telecom, The Loft Group, Music Mastermind, KUULUU and others, IBM said, underscore its cloud leadership worldwide.

In an research commentary released Monday, Matthew Casey, a software analyst with Technology Business Research, wrote, “In addition to the acquisition of Cloudant, the announcement on Monday to invest an additional $1 billion in cloud development further exemplifies the importance of cloud in shifting IBM’s business model from a traditional deployment model.

“With the foundational layers from SoftLayer’s infrastructure, and the January 2014 announcement for a $1.2 billion investment in additional cloud infrastructure, today’s cloud investments center on enabling the cloud platform capabilities of existing software lines. At the center of the most recent cloud investments was 'BlueMix,' a centralized development platform within IBM’s public cloud infrastructure that facilitates development and integration of workloads across the company’s proprietary software portfolio. With BlueMix and acquisitions such as Cloudant and Aspera, the key for IBM will be packaging services and support around these proprietary platforms to enable customer transitions to IBM’s proprietary cloud environments where business outcomes will drive customer value."

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