IBM commits US$1.2B to build global cloud network

Goal: Network of 40 data centres across five continents.

IBM has announced plans to commit over US$1.2 billion to build a network of data centres across the globe.

This year, IBM said it plans to deliver cloud services from 40 data centres worldwide in 15 countries and five continents globally, including North America, South America, Europe, Asia and Australia.

IBM will open 15 new centres worldwide in addition to the existing 13 global data centres from SoftLayer (which it acquired last year) and 12 from IBM. Among the newest data centres to launch are China, Washington, D.C., Hong Kong, London, Japan, India, Canada, Mexico City and Dallas.

Being early and fast matters

Holger Mueller, Constellation Research

IBM plans to have data centres in all major geographies and financial centres with plans to expand in the Middle East and Africa in 2015.

A game of monopoly

“Credit goes to IBM for being first out of the gate in 2014 and moving the yardstick from around 20 to 40 cloud data centre locations. It's now [up] to the usual competitors to respond and we will see their response in the next weeks,” said Holger Mueller, vice president and principal analyst at Constellation Research.

Being early and fast matters, said Mueller, as he weighed on “the cloud data centre monopoly race”, a reference to the board game.

“Of course the board game's most prized possession - the Boardwalk - does not apply to cloud data centre race - as the player will not be able to own a country exclusively. But a land grab it equally is - as you can only build a finite number of data centres in a year, and put only so much fibre in the ground. So being early and fast matters.”

IBM said it plans to establish SoftLayer as the foundation of its wide-ranging cloud portfolio. Since its acquisition in 2013, IBM said SoftLayer has served nearly 2400 new cloud clients.

“It is impressive how fast IBM is moving to the SoftLayer architecture - and shows at the same time how high the table stakes in the cloud game are,” said Mueller. “Competitors still counting on IBM moving at former pedestrian speeds will be surprised. “

This announcement comes a week after IBM established the Watson Group, a business unit for the development and commercialisation of cloud-delivered cognitive and Big Data innovations. As part of this initiative, IBM said it will also deploy Watson on SoftLayer.

Mueller observed that with the high performance nature of the Watson applications, IBM may be moving more into the direction of high end cloud infrastructure.

“It remains to be seen if IBM will join Google in that positioning - or if it will provide a two tiered cloud performance offering. Both require investment and that's what we are seeing. Going forward the location of new Watson clients may give an indication of IBM's further cloud data centre locations.”

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