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Summary:

Earlier this week I spoke with Erich Clementi, General Manager, Enterprise Initiatives (otherwise known as the head of IBM’s cloud computing efforts) about Big Blue’s cloud strategy. After we raked the computer and service provider over the coals earlier this year for talking about the cloud […]

Erich ClementiEarlier this week I spoke with Erich Clementi, General Manager, Enterprise Initiatives (otherwise known as the head of IBM’s cloud computing efforts) about Big Blue’s cloud strategy. After we raked the computer and service provider over the coals earlier this year for talking about the cloud without offering substance, in June IBM finally unveiled part of its cloud plans. They revolve around providing workload-specific services via an IBM cloud, as a hosted cloud, or inside a company’s own data center. It kicked off its cloud rollout with a test and development service, and last month it announced an analytics offering. Clementi revealed that IBM won’t stop at workload-specific services, and will build a WebSphere platform-as-a-service offering for clients.

It would go up against other general purpose platforms-as-a-service offerings like Microsoft’s Azure platform, Rackspace’s Mosso effort and to a lesser extent, platforms like Google’s App Engine and Salesforce.com’s Force.com. And earlier this week, VMware purchased SpringSource and said it would build a platform as well. Clementi was cagey about plans to provide an infrastructure-as-a-service offering, however, despite rumors I’ve heard about IBM’s interest in providing compute cycles. Below is an edited version of our conversation:

GigaOM: What Does IBM mean when it talks about cloud computing?

Erich Clementi: We think every 15-20 years there’s a big shift in the computing model. We have been at the top of the hill around the centralized compute model but we overslept on the distributed model. We saw it coming but we didn’t react to client service server. And in 1993 we nearly went belly up when the industry shifted, and that’s not going to happen to us again. So when you ask me what cloud is, it’s the new delivery and consumption model for IT support and service. It’s that broad.  The cloud is nothing but the industrialization of any IT supported services. Many people equate cloud computing to virtualization. It is not virtualization. To get the value you need standardization and automation on top of that virtualization.

GigaOM: So clouds don’t need to be virtualized?

Clementi: Google is not virtualized and virtualization is not sufficient to qualify as a cloud — it’s a better use of the physical infrastructure, but the real bang comes from modeling out the whole data center and taking energy, labor, software, and hardware and acting on all those levels. It’s like Google’s idea that the data center has become the computer.

GigaOM: So then will IBM provide Infrastructure-as-a-Service products or PaaS products?

Clementi: We need to understand what the enterprise use cases are. We obviously need to have something for cycles for our CloudBurst services, so there is a compute cloud underneath that. But Amazon is a street corner — an outlet where people can go to get compute cycles. We are going to give our customers choice, but those choices have to be enterprise-grade. That means you have to have SAS 70 certification and an audit trail, not let an employee swipe a credit card and have everyone order machinery.

There’s a lot of specific use that people are making of Amazon and others, but in the enterprise the first step in the short term is deployments of hybrid environments that customers will build internally and compliment that with public cloud services. That’s a very rich space that can deliver business for years.

You should see us play in the platform space. We have the largest base of middleware in the industry, and as the computing moves to a cloud delivery model we are going to support that move. Look out our CloudBurst services and WebSphere; we are clearly going to have our software stacks as a platform.

GigaOM: So what’s the biggest challenge to moving your business — or any business — to the cloud?

Clementi: How do I move from a license model to a recurring revenue steam? That is the big transition that business are going to make. When I sell a license, I monetize that up front and that requires a different investment stream and changes how fast you build up revenue. We’ve gone through a period like this before when you had a rental model for computers to a straightforward pay model, and these transitions are pretty significant.

Share moves happen only when there is disruption. We were pretty good in mainframe, and this time we see a big opportunity  because this is centralized computing and it has the potential to change the economics of enterprise computing.  It requires a complex set of skills, from service processes to software and hardware experience.

  1. Cloud Middleware is the logical evolution of traditional middleware solutions: making them available as a service, reducing complexity, readily increasing adoptability, and eliminating the need for new infrastructure. Unfortunately, a majority of cloud offerings simply take traditional solutions and begin hosting them. By making a solution hosted in-the-cloud, they succeed in eliminating a developer’s or company’s need to buy new infrastructure to run it, but they utterly fail to fulfill a fundamental promise of the cloud operating system model – reducing complexity. It is still the same old, complex solution – just not running on your servers.

    Cloud Middleware providers should not just host the same old stuff. They need to re-architect their solutions and make them available as an easy-to-use service, not just as-a-service. In order to increase adoptability of these traditional middleware solutions, the intended audience (engineers, developers, designers) should be able to pick it up and run with it, mastering its use in a very short period of time. They don’t want to have to learn or understand all of the great complexities of what the service solves for them. They want to quickly implement it and get back to focusing on the core value proposition of what they are creating.

    The only way developers will be able to truly leverage all the benefits of cloud middleware is if the services available to them hide the complexities of using them – this is what will open more doors for the innovators of today and tomorrow.

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  2. Ronald Frazier Sunday, August 16, 2009

    Does this mean IBM may get back into acquisition mode? i.e. Salesforce.com or FreeCRM.com are probably the top acquisitions targets.

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  3. vmware didn’t just purchase springsource – they also, at about the same time (this year) brought in lucovsky and collison from google (and one of their swe’s) – i’d keep a VERY close eye on vmware…those two brains alone could make the platform a standout (they’re both working on cloud at vmware)

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  4. This will be Google’s space. We’re talking about companies uploading sensitive data to remote servers. In this arena, companies like IBM might do “OK”, but companies like MSFT, which can’t even come close to achieving security on the PC desktop will be laughed out of the room.

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    1. MSFT’s Personal Health Record platform “Healthvault” is outdoing GoogleHealth right now, in a space that heavily relies on security and privacy. So if MSFT has the ability to compete in an area as sensitive as health care IT, I’m sure they have the capabilities to compete in the cloud.

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  5. I alway smile the way computing paradigms come full circle. In the 1970′s, Timesharing was the latest thing in computing and similar, in many way, to Cloud Computing (albeit) with vastly different technologies. I’ve written more about this in my blog.

    http://blog.expertceo.com/2009/06/20/timeless-thoughts-on-timesharing/

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  6. Derrick Harris Sunday, August 16, 2009

    It’s funny that IBM is so unwilling to commit to an IaaS offering given how long it has been doing something, albeit less dynamic, with Deep Computing on Demand.

    http://www-03.ibm.com/systems/deepcomputing/cod/index.html

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    1. Stacey Higginbotham Monday, August 17, 2009

      I have thought the very same thing. However, my guess is the margins aren’t there in IBM’s opinion.

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  7. Everybody in the cloud! First it was Amazon, the Google and salesforce & Microsoft. Now IBM (did I forget Hp and others?). This area is getting crowded by the minute!

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  8. IBM should scoop that company Appzero http://www.appzero.com because they move server applications to the cloud – just a perfect workload tool, plus, Msft is not rushing to do this because of revenue issues with Windows server licenses.

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  9. [...] the original: IBM Takes On Microsoft, Google & Salesforce Clouds var AdBrite_Title_Color = '0000FF'; var AdBrite_Text_Color = '000000'; var [...]

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  10. In my opinion, IBM sells hardware. The cloud takes that away from them. So, they react with software. Their model is software licensing based on hardware. So, they react with services. Their services arm is broken. They have no real cloud resources that actually understand the cloud. All the resources (business, technical etc) are now independent consultants that could actually make all this happen at the grassroots level. As far as actually providing IaaS, they are indeed unable to do that. As far as PaaS, they have none other than a complicated stack of WebSphere. In the SaaS domain, well they have none. It does seem that the dinosaur will just evolve into irrelevance.

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