IBM is moving as fast as it can into cloud computing, wooing startups from Silicon Valley to London in hopes that young born-to-cloud companies will use its technology as opposed to, say, the stuff from Amazon Web Services.
A few proof points: Last week, the company launched BlueMix Garage at London’s Level39 accelerator to foster collaboration between startups and IBM tech eggheads. (IBM launched the inaugural BlueMix Garage in San Francisco in April. BlueMix is the company’s Cloud Foundry-based Platform as a Service. Last week, IBM also announced a private or dedicated version of BlueMix that runs on a cordoned off section of the SoftLayer public cloud.
The previous week, [company]IBM [/company]said qualifying startups could get up to $120,000 in credits towards the use of IBM SoftLayer, BlueMix PaaS and associated products. That’s $20,000 more than Google has put up; and significantly more than the $25,000 in credits AWS typically provides.
Facing a gigantic competitor
But then again, IBM has to offer more. It still lacks the mind share and market share of leader AWS. All of this is a good start towards winning startups over, but nowhere near enough.
I would estimate that north of 90 percent of startups default to [company]Amazon[/company] Web Services use; some are willing to kick the tires of Google Cloud Platform and if the startup’s brain trust comes out of the [company]Microsoft[/company] ecosystem, Azure might get a look.
The CTO of a San Francisco area startup who has been quite critical of AWS policies — he’s really irked that AWS execs keep telling his venture backers that his company should use more and more AWS services — said there’s still really no viable option for companies like his. In his view, these small companies, are putting more — not fewer — workloads into AWS, although he remains intrigued by Google’s sustained use discounts, which make using its resources much easier to manage than AWS.
Can enterprise kingpin appeal to the little guys?
Here’s IBM’s blessing and curse: It is in virtually every enterprise account in the universe in some form — so those companies will likely at least give SoftLayer/BlueMix a look. But even those companies have developers enamored of AWS and many of those new corporate applications are being tested there by default. That gives Amazon a powerful foothold in those IBM shops.
Jose de Castro, founder and CTO of communications startup Tropo, is a big fan of SoftLayer — in fact he was scoping it out before IBM bought the company last year for $2 billion. The acquisition actually worried him but he forged ahead and said IBM has done a great job keeping SoftLayer SoftLayer. He was particularly attracted to SoftLayer’s bare-metal resources.
SoftLayer offers virtualized servers for web functions and databases but also bare metal as a service which is great for video processing and games, he noted.
[pullquote person=”Holger Mueller” attribution=”Holger Mueller, Constellation Research”]”Free cloud is always a good [incentive] for startups.”[/pullquote]
De Castro said Amazon’s just announced C4 instances are optimized for video and other graphics intensive workloads, but Tropo is already well down the road. And it also uses AWS for other parts of its business.
This is sort of an unusual case study for an IBM Cloud customer, most of which appear to have come to IBM’s pre- or post-Softlayer cloud portfolio because they have a prior relationship with IBM.
Here’s what I would worry about as a startup evaluating IBM: SoftLayer is great as long as its management — IBM cloud chief and former SoftLayer CEO Lance Crosby et al — are still steering the ship. And provided they have the full commitment of IBM CEO Ginni Rometty.
Given how important cloud is to IBM I would assume that group — as opposed to IBM’s old guard — will get what it needs. But how long will those people — who are accustomed to the fast pace of cloud — be willing to stick around IBM, which is, for all of the best intentions, still too big to be really nimble?
Constellation Research analyst Holger Mueller is bullish on BlueMix, which he characterized as a “genuine PaaS — OEM’d Cloud Foundry” integrated with other IBM products and running on SoftLayer. “There is a huge SoftLayer startup system and IBM is loving on it,” he said via email. And, “free cloud is always a good [incentive] for startups,” he said.
Carl Brooks, analyst with the 451 Group, also sees reason for optimism. “It’s pretty standard [for companies] to go with SoftLayer after they cut their teeth on AWS as startups — but also still use AWS,” he said via email.
“It’s also worth noting that IBM rolled out BlueMix in well under a year which is Warp Factor Eleventy Jillion for IBM. That says more to me about how much IBM is trying to change than anything else, to be honest,” Brooks added.
Still, Amazon with an 8-year head start in public cloud, shows no sign of slowing down and [company]Google[/company] and Microsoft — both of which with money to burn — show a willingness to burn it on their clouds. It’s unclear if IBM has that luxury.
For more on IBM’s cloud picture, check out Lance Crosby’s talk at Structure 2014.
This story was updated at 5:25 a.m. PST on November 24 with mention of IBM’s new dedicated BlueMix Option.