BLOG: Watch out Amazon: What IBM’s $1.2B cloud investment really means

Brandon Butler

While IBM dropping a pile of cash on the cloud may irk some in the market, the reality is the industry is so young that there is enough business to go around for all the major providers to have their piece of the pie. IBM points to research noting that the public cloud computing market could top $200 billion by 2020, up from an estimated $113 billion in 2013, according to Gartner. There's enough share for multiple mega players.

Who this really threatens are the mid-size and smaller IaaS cloud players who may not be able to keep up with the billion-dollar investments of mega-players. No doubt Amazon, Microsoft and Google will respond to this news with evaluations of their own global data center footprint, which they're undoubtedly already doing anyway. IBM may be looking to differentiate itself as a true international cloud player: At this point, Amazon doesn't have any data centers in Mexico or Central America and it only has one in the European region, nor does AWS have any announced plans for services in the Middle East or Africa.

IBM seems to love making grandiose pronouncements like today's about its investment strategies. Last March, before its SoftLayer acquisition, IBM announced that OpenStack, the open source cloud IaaS platform, would be central to its cloud strategy moving forward. In September 2013, IBM committed $1 billion to the development of Linux-based cloud and analytics platforms. And just this month IBM said it will invest a reported $1 billion into what it calls cognitive computing, which is centered around its Watson technology.

Some may ask how newsworthy announcements like these actually are. Is this really new money that IBM is committing to Linux and the cloud? Or was IBM already going to spend this money in its budget this year anyway and now it's just making the announcement? Either way, it's clear IBM is looking to make moves in the public IaaS cloud market. Spending $1.2 billion to build a dozen new data centers is certainly one place to start.

Source: Network World

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