Resetting Cloud Expectations: IBM’s $1.2B Global Build-Out

A $1 billion expenditure certainly looks impressive on paper, but is even more so when one considers the care takes with a dollar. The company is not especially parsimonious but it does require tangible, preferably strong evidence of commercial viability before opening its pocketbook.

That point was made clear in the press release related to the new build-out which noted an IBM Center for Applied Insights study that estimated the global market is set to grow to $200 billion by 2020, driven largely by businesses and government agencies deploying to market, sell and develop products, manage supply chains and transform business practices.

Even if it is off by half, the study‘s estimated cloud market opportunity still represents a nice piece of business. If by spending $2 billion on and another $1.2 billion to establish a global network of -ready cloud IBM can capture just a tenth of that market, it is well-worth the company‘s time, attention and investment.

Perhaps most importantly, the cloud build-out highlights what IBM is doing today to create a secure position for itself in years to come. Many love to talk-up similarly future-focused strategies and, given the rapid, fundamental changes continuously roiling IT markets, such efforts are crucial for ensuring vendors‘ long term survival. However, close inspection often reveals shaky constructs made from pipe dreams and pixie dust.

In contrast, by leveraging the enterprise computing technologies they know very well along with innovative new developments and acquisitions like SoftLayer, IBM is building a solid foundation for cloud services that is rooted firmly in business and marketplace reality.

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NOTE: This column was originally published in the Review.

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