Spending flurry woos A/NZ cloud seekers

Published on the 23/01/2014 | Written by Newsdesk

cloud computing

As enterprise enthusiasm for cloud computing mounts, vendor investment is surging from the likes of IBM, Amazon, Rackspace, Microsoft and Fujitsu as the global cloud land-grab gathers pace…

IBM is the latest cloud vendor to open its wallet, announcing a $US1.2 billion investment in its data centres which will this year see it offer cloud computing services from 40 data centres in 15 countries.

IBM isn’t providing any detail about how the investment will impact its local network of data centres, offering only the bland comment that; “The investment will build on and leverage IBM Australia’s existing strong network of data centres across Queensland, NSW, ACT, Victoria and South Australia.” While the company also operates data centres in New Zealand, it again won’t comment on the impact of the $US1.2 billion cloud investment surge for local users.

IBM isn’t the only company playing coy. Microsoft also is yet to provide any firm detail about the opening of a local instance of its Azure cloud, despite announcing last May that it would offer both NSW- and Victoria-based cloud options to Australian and New Zealand customers. In the meantime Amazon Web Services and Rackspace have both ramped up local cloud operations as has long time provider of local cloud services, Fujitsu, while Equinix this week announced plans to invest $A60 million establishing a new data centre in Port Melbourne.

The reason cloud remains such a hot investment target is revealed by IBM’s financial results released this week. It reported that net income was down one percent to $US16.5 billion on revenues which fell five percent – taking them below the psychologically important $US100 billion barrier to $US99.8 billion. But cloud revenues surged 69 percent during the year to $US4.4 billion.

The company clearly sees the cloud as its best route to a rosier future, which explains why IBM has invested more than $US7 billion to accelerate its cloud push since 2007, and now expects its cloud revenues to reach $US7 billion by 2015.

It’ 2013 $US2 billion purchase of SoftLayer which is being deployed by IBM as a form of cloud middleware could prove the lynchpin of success as it is intended to provide customers with greater control of where and how applications and workloads are deployed across cloud infrastructure.  The company will also deploy Watson, its data analytics services on SoftLayer.

Earlier this month IBM established a separate Watson Group to spearhead sales of the services, along with three new Watson services – Discovery Advisor to support R&D initiatives; Watson Analytics focused on visualising big data queries; and Watson Explorer to support in-enterprise data use.

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