Weekly Update

IBM aims to distinguish itself with a richer cloud vision

On Wednesday IBM announced the latest iteration of its SmartCloud offering. The new developments move beyond existing solutions for health care and education to deliver a platform capable of addressing a far broader set of enterprise use cases, including development and delivery of internally developed applications. IBM is certainly setting itself ambitious targets, with the stated aim of serving 200 million users by the end of 2012. If it can deliver on this, does the market want what it’s selling? Furthermore, how can IBM differentiate itself from the competition?

IBM’s announcement covers three broad areas: a PaaS offering called IBM SmartCloud Application Services (SCAS), a set of solutions to help customers deploy their first private cloud with IBM called IBM SmartCloud Foundation, and a program to support and raise awareness of partner solutions called IBM SmartCloud Ecosystem.

Like other PaaS solutions (Microsoft Windows Azure, Heroku), IBM’s offering is intended to simplify the low-level repetitive tasks that system administrators perform in order to keep their applications running. It also offers a layer of abstraction for software developers, enabling their applications to access storage, processing, databases and other capabilities without any requirement to understand the peculiarities of the underlying technical infrastructure. IBM’s press release suggests, for example, that setting up a development environment would require weeks. With SCAS, this time is reduced to hours. The precise improvements will vary depending upon local circumstances and staff capabilities, but gains of this sort are certainly in line with what a good PaaS solution should deliver. In addition, IBM seeks to differentiate itself from consumer and SME-facing cloud platforms such as Amazon’s — which the majority of large enterprises continue to treat cautiously — promising “business centric SLAs” but not yet providing details.

Tackling the same perceived needs that saw Oracle deliver CRM, HR and other business process tools in the cloud with Oracle Fusion Applications, IBM has invested in bringing SAP to the SCAS platform. IBM claims that SAP customers will see significant savings when managing the application via IBM’s cloud, installing new databases in 12 minutes instead of 1 day and cloning databases in 20 minutes instead of 2–3 days. These are bold claims. If they are substantiated, existing IBM customers with large and complex SAP environments will want to take a close look at the proposition. It is less clear that these benefits will be sufficient by themselves to draw large numbers of new customers to IBM and its cloud.

Like Oracle, HP, and other well-established providers of enterprise IT solutions, IBM recognizes that the cloud must be a key component of its future strategy, and that current customers regard the cloud with suspicion that will likely diminish with time. Constrained by the pace of change that customers are willing to accept, and required to protect existing revenue streams from hardware, software and services, companies like IBM are releasing interconnected sets of products that increasingly bind customers to them. With Wednesday’s announcements, IBM has given many of its existing enterprise customers a safe and comfortable environment within which to begin gradually transitioning to the cloud — IBM’s cloud, running IBM’s software on top of IBM’s hardware, backed by its trusted sales and professional services operations.

With the SmartCloud Ecosystem, IBM is hoping that developers and systems integrators optimize their own products for IBM’s cloud, further increasing the value of this proposition to customers, and making it even harder for customers to consider moving elsewhere. With a captive audience of 200 million in just over 12 months and the early example of SAP, it seems likely that IBM’s existing partners will rush to get aboard.

There’s nothing radical in the announcements, but that’s unsurprising. The latest iteration of SmartCloud has been carefully constructed to appeal to IBM’s current customer base. It seems likely that IBM’s customers wil continue to move forward cautiously, and the company is positioning itself as their ideal partner.

Question of the week

Is IBM’s SmartCloud for you?