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Structure 2010: IBM's Cloud Opportunity Is in Old Businesses

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IBM (s ibm) isn’t looking very far to find opportunities in cloud computing. In its first year offering cloud services, the company has been helping existing businesses in health care and other industries move towards service models for their infrastructure and products. It’s like the origins of the web, said Erich Clementi, the company’s VP of strategy and general manager of enterprise initiatives, speaking at GigaOM’s Structure conference in San Francisco. First, there were businesses born on the web; then, the opportunity was to bring whole existing industries online.

“Our focus on enterprise forces us to deal with the infrastructures people have, not the ones we wish they had,” said Clementi. He said the enterprise is not going to accept a lower bar for privacy and security just because consumer norms are changing.

Clementi shared a couple of anecdotes about emerging and internal projects that speak to IBM’s position. First up, IBM is working on a health-care project around clinical trials. Clementi said 8-12 percent of the cost of clinical trials is moving data around — for example, sharing results between multiple hospitals testing a new treatment. IBM wants to create a cheaper cloud-based alternative that will limit duplication of data and still be secure and HIPAA compliant. Plus it will have added benefits like analytics and collaboration.

Internally, IBM has created a sort of (s crm) to manage some of its own data stored on mainframes. The one-petabyte-mart project eliminates batch processes, existing dashboard applications and other hazards of moving data around, with 109,000 people already using it in self-service mode and 200,000 due by the end of the year, Clementi said.

But won’t the market evolve to be led by companies that’ve used the cloud from birth without need for IBM to sell them its integration products? Clementi said that IBM thinks there will still be opportunities to tie together applied clouds and whatever solutions companies provide. But he hinted that IBM may eventually be more changed by the cloud than it is today. The company is “open to discussions around middleware as a service” and “looking for ISVs to channel into the mid-market,” Clementi said.

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