Posts Tagged ‘ IBM Cloud Services ’

IBM’s Goals for Cloud Computing

With a reported $14 billion left over from its 2009 fiscal year, what is IBM going to do with it? Industry experts suggest that they are expanding upon their ability to deliver enterprise cloud computing solutions and services.

It’s expected that cloud services will add $3 billion in net revenue by 2015, says IBM’s Vice President of Cloud Computing Walt Braeger. Although IBM won’t be able to do so without acquisitions, the company’s excess of cash won’t be spent on a single acquisition—like when IBM purchased Cognos for $5 billion in 2007.

It’s been well documented that IBM has already spent a great deal on significant cloud computing acquisitions, most of which were acquired for less than $1 billion, although a few stray from that norm. IBM spent $1.4 billion on Sterling Commerce (which was a unit of AT&T and focuses on providing software that helps companies manage their channel relationships) earlier this year, for example. IBM also acquired Cast Iron Systems—who’s software systems help connect its cloud services to traditional and legacy software systems—for an undisclosed amount in May.

Cloud Computing and its Inner-workings
Because the business aspects of cloud computing are increasingly local, IBM will need to have a physical presence in many of the nations in which it hopes to build a customer base for its cloud services.

Braeger cited that IBM already has a multi-billion dollar investment in its service delivery centers, located across the globe. Because they require massive amounts of reliable bandwidth, cloud computing centers have to be located next to major Internet points of presence. IBM has not encountered bandwidth constraints as it grows its cloud computing business thus far, but that may change as focus turns to developing markets—where solutions will need to incorporate low-bandwidth mobile devices.

Organizations will utilize IBM’s cloud appliance service model, CloudBurst, in some cases. CloudBurst is a physical device that delivers a cloud, and is one of IBM’s many answers to the security fears of its customers.

CloudBurst, when initially conceptualized, was aimed at developers. This is due to the fact that developers drive so much business value that the typical enterprise devotes 30 to 50 percent of its entire technology infrastructure to development and testing. All but ten percent of that infrastructure remains idle, IBM said, thus making the case for a scalable, flexible, interoperable cloud infrastructure.

Developers and a Cloud Infrastructure
According to Braeger, cloud projects in enterprise testing have delivered on all the hype surrounding the cloud, with an average Return On Investment (ROI) in just four months, making these projects extremely attractive to organizations that are constricting IT budgets.

These types of projects require a multitude of components to be in place before they can begin delivering: self-service access to resources, a detailed service catalog, and infrastructure ready and available for instant provisioning. Those have always proven to be pain points for developers and enterprise IT in the past. For example, developers dealt with bureaucracy when requesting a system on which they could test a new application. Now though, says Braeger, the situation has changed due to a cloud-based infrastructure.

Changing the model so drastically requires IT to revamp other functions beyond deploying resources. Organizations need to develop the capacity to charge other departments for use, for example, meaning departments must be willing to be metered.

These are unlikely to be major obstacles though, at least according to Braeger. In many large enterprises, IT departments already have an accounting function and an auditing function that is standardized. Because modules that work well in a particular auditing system can be reused across a wide spectrum of customer, this makes IBM’s job easier.

Cloud Computing Living Up to the Hype
There is bound to be internal push-back, regardless of the early evidence of a quick return on investment, with so many major changes altering the daily work-flow. During his company’s annual meeting this year, IBM CEO Samuel Palmisano told shareholders that despite the turmoil, cloud technologies are slated to revolutionize how IT functions within the enterprise.

Braeger did admit that hype surrounding cloud computing is current at what industry researcher Gartner would call a “peak of inflated expectations”, which is inevitably followed by a “trough of disillusionment”—but is able to highlight the cloud’s demonstrated success in delivering a quick ROI and more efficient IT services as a reason not to be concerned.