IBM Gives a Little More Shape to Its Cloud Services Strategy

| Feb 11, 2009 | Managed IT Services | Competitive Update

| Analyst: Amy Larsen DeCarlo

Current Perspective: Neutral/Positive
Vendor Importance: Moderate
Market Impact: Moderate

Event Summary

February 10, 2009 –- IBM is unveiling a series of new products, services, and partnerships for its Blue Cloud cloud services initiative that aim to further the company’s ability to build and support integrated cloud solutions for businesses. These new elements include backup and recovery service for desktops and laptops delivered through an IBM cloud; new software solutions to manage and secure cloud computing environments; and a relationship with Juniper Networks to help IBM clients implement hybrid cloud capabilities. IBM currently claims to support hundreds of clients in its 13 worldwide cloud centers that are looking to leverage an Internet-based delivery model to support dynamic services including server capacity on demand, online data protection, and Lotus e-mail and collaboration software.

Analytical Summary

• Current Perspective: Slightly positive on IBM’s raft of new partnerships, consultative and managed service offerings, and capabilities in support of the company’s enterprise-focused Blue Cloud initiative because by previewing elements such as the coming Tivoli Storage as a Service offer, new professional services support for corporate cloud services strategies, and IBM’s cloud bursting collaboration with Juniper Networks, the company reveals a deepening, if not exactly cohesive, portfolio of cloud-based services that are likely to appeal to a broad prospect base.

• Vendor Importance: Moderate to IBM because the announcements demonstrate that the company continues to invest heavily in building out a wide-ranging set of hardware and software solutions, service offers, and alliances in an effort to become the go-to player in the emerging on-demand IT services space.

• Market Impact: Moderate on the managed applications sector because IBM’s newest additions to its Blue Cloud solution set (see “IBM’s Cloud Strategy Takes Flight,” October 6, 2008), and the company’s newly announced blue chip cloud computing clients, show that Big Blue is on the leading edge of the movement to adopt a dynamic on-demand IT resource model.

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Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Vendor Actions

• IBM should highlight its extensive experience helping a wide variety of clients identify opportunities to use cloud services to cut costs and improve efficiencies by following up this announcement with individual customer success stories. This will go a long way toward proving IBM is at the forefront of evolving cloud services from high concept to a practical reality for many organizations.

• IBM and Juniper need to follow up the cloud bursting demonstration with examples of how, by providing overflow capacity from a customer’s private cloud to a secure public cloud, IBM will help businesses handle fluctuating computing needs more cost-effectively. IBM also should reassure clients that it has baked security into the public cloud, leveraging its substantial security resources and expertise to protect critical information in the event that the overflow capacity is needed.

• One thing missing from this announcement is an emphasis on the value that clients can derive from IBM’s extensive partner ecosystem. IBM should emphasize that these partners provide clients with multiple technology choices from which IBM can craft best-of-breed solutions. Some of these partners also represent new business opportunities for clients.

Recommended Competitor Actions

• Competitors can deride the IBM announcement as consisting of a disconnected set of components that are, for the most part, not yet available to customers. Rivals can paint IBM as trying too hard to provide soup-to-nuts cloud services capabilities and instead coming up short with a coherent strategy to help clients develop their own plans.

• Integrators such as Accenture and CSC that are building out their cloud services businesses should emphasize the combined benefits of their deep technology expertise and their vendor-neutrality in helping customers successfully advance their cloud strategies. Integrators can note that while third-party partners add important technology to their cloud services engagements, their independence as providers allows customers to avoid the danger of locking in with a single vendor.

• Carriers such as AT&T and Verizon Business that are extending their cloud services offerings need to underscore the benefit that owning their own global networks brings to customers, particularly those clients looking for geographic diversity.

• Hosting providers such as SAVVIS and Navisite should play up the work they are doing with smaller businesses, including helping software vendors transition to delivering their solutions through the cloud. These providers should publicize early success stories; pointing out how they are expediting time-to-market and helping their clients better position themselves to weather a tough economic climate.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Managed IT Servces | More information

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