IBM to invest $1.2 bn in cloud services

Global technology services giant IBM said yesterday that the company plans to invest around $1.2 billion to significantly expand its global network of cloud data centres.

''Today's announcement is another major step in driving a global expansion of IBM's cloud footprint and helping clients drive transformation,"  IBM Global Technology Services senior vice president Erich Clementi said.

IBM, which has been struggling in recent years due to sluggish demand for hardware and consulting work, is focusing its attention on high growth areas such as cloud computing, data analysis and mobile security.

Last year, in a significant move, the company acquired cloud computing provider SoftLayer Technologies Inc for $2 billion (See: IBM to buy cloud-computing storage provider SoftLayer for a reported $2 bn).

This year, the technology giant plans to deliver cloud services from 40 data centres worldwide in 15 countries and five continents including the Americas, Europe, Asia and Australia, by adding 15 new centres to the 13 existing global data centres of SoftLayer and 12 of IBM.

The new centres will be launched in China, Washington DC, Hong Kong, London, Japan, India, Canada, Mexico City and Dallas.

The company plans to expand its network in the Middle East and Africa in 2015.

The global cloud market is estimated to grow to $200 billion by 2020, driven largely by business and government entities deploying cloud services to market, sell, develop products, manage their supply chain and transform their business practices.

Armonk, New York-based IBM is the global leader in cloud with an unmatched portfolio of open cloud solutions that help clients to think, build or tap into it.  IBM has a network of 40 data centres worldwide, thousands of experts and over 30,000 clients.

Since 2007, IBM has invested more than $7 billion in 15 acquisitions to accelerate its cloud initiatives and currently holds around 1,560 cloud patents focused on driving innovation. The company expects to achieve $7 billion in annual cloud revenue by 2015.

The new investments will provide business clients the ability to place and control their data globally. IBM SoftLayer underpins IBM's growing cloud portfolio and gives clients the ability to choose a cloud environment and location that best suits their business needs and provides visibility and transparency to where data reside, control of data security and placement, the company said.  

IBM plans to establish SoftLayer as the foundation of its wide ranging cloud portfolio. The SoftLayer infrastructure will provide a scalable, secure base for the global delivery of cloud services spanning IBM's extensive middleware and SaaS solutions. 

Since its acquisition in 2013, IBM SoftLayer has served nearly 2,400 new cloud clients. 

Last week, IBM made a significant investment in its Watson Group, an artificial intelligence super computer system capable of quick analysis and interpretation of large amounts of data. (See: IBM to invest $1 bn on Watson unit).

As part of the current initiative, IBM will also deploy Watson on SoftLayer.