Skip Links

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

IBM insists it will be a major public cloud player

By Brandon Butler on Fri, 01/17/14 - 10:25am.

In classic IBM marketing flavor, Big Blue announced today a big investment into the cloud: $1.2 billion over the next two years to significantly beef up its international data center footprint for its cloud.

IBM has been aiming high in the cloud for the past few years and today's declaration makes it clear IBM is in the public cloud fight for the long haul. That is news that others in the market - particularly the likes of Amazon Web Services, Google, Verizon Terremark, Microsoft and Rackspace - may not be ecstatic to hear, but the statement can't come as a huge surprise to those in the cloud industry either.

+MORE AT NETWORK WORLD: Hypervisor battle heats up: Microsoft bangs away at VMware's dominance | Cloud's worst-case scenario: What to do if you provider goes belly up +

First, the details: As part of the investment, IBM says it plans to have more than 40 data centers on five continents across 15 countries by the end of 2014. New data centers will be built this year in China (which was previously announced), Washington D.C., Hong Kong, London, Japan, India, Canada, Mexico City and Dallas, with more new data centers in the Middle East and Africa in 2015. "This will be the most comprehensive global cloud service any company has offered," IBM SVP of global technology services Erich Clementi wrote in a blog announcing the investment, seemingly taking a swipe at Amazon Web Services.

AWS has nine regions including four in the U.S., one each in South America, Japan, Singapore, Australia, Europe (Ireland), and it has announced plans for a Chinese region.

IBM says the data center build out will allow it to serve more customers more quickly. By having data centers in close geographic proximity to the end users customers have the fastest access to those cloud resources, IBM says. Data sovereignty laws in foreign countries and concerns about government snooping will allow customers to keep data within their country's borders too.

The move represents really good news for SoftLayer, a public cloud IaaS platform that IBM bought for $2 billion in mid-2013. Since acquiring the company, IBM has made SoftLayer a centerpiece of its public cloud and today it said SoftLayer will serve as the "foundation" of its cloud portfolio moving forward. SoftLayer employees made a pretty penny on their buyout from IBM, and now the company is doubling down on their shiny new toy. SoftLayer data center capacity will almost double from 13 data centers to 25 when the expansion is complete.

IBM is certainly looking to take on the heavyweight in this industry: Amazon Web Services. At AWS's most recent user conference, IBM rented advertisements on buses driving around Las Vegas boasting that its SoftLayer platform hosts more web sites than any other cloud provider - including AWS. Andy Jassy, who heads up Amazon's cloud operations called IBM out during his keynote for placing the ads across the city - marking a rare foray by Amazon into a public marketing duel with competitors. (Check out Alex Williams' write up of the cmarketing gimmicks of competitors at AWS's show here.)

While IBM dropping a pile of cash on the cloud may irk some in the market, the reality is (continue to page 2)