IBM strengthens its cloud presence in Asia
Published November 14, 2014
Smarting from its bad financial results, IBM is taking its cloud hopes to Asia’s emerging business sectors.
IBM and Chinese Internet provider Tencent Cloud announced a collaboration to provide industries with public cloud offerings bolstered with software-as-a-service solutions. The two companies, both enjoying name recognition in one of technology’s fastest-evolving territories, will focus on emerging small and medium enterprises in the smarter cities and smarter healthcare industries as well as other fields.
As part of the alliance, Tencent Cloud and IBM will jointly promote industry innovation and draw from their paired resources and global reach to benefit enterprise customers.
The move is an example of the strategic shift IBM is expected to pursue as the company tries to invigorate its disappointing financial performance. As the company announced low Q3 2014 numbers in October, IBM President Ginni Rometty backed off its prior profit plan and positioned cloud as the priority of IBM’s future.
The revised strategy has led IBM to communicate a host of cloud-oriented partnerships and reclaim control of the notion and standards of the cloud concept. With its SoftLayer acquisition, Big Blue owns a recognizable brand in a space where misperception and security concerns prevail.
IBM appears everywhere in the cloud discussion, no matter how elementary or conversant the reader’s grasp of the concept might be. Blogging on Forbes.com, Big Blue’s Global VP for Growth Solutions, Jacqueline Woods, asserts that as companies “roll out cloud computing, they’re building flexibility into their infrastructures so they can adjust as needed … this kind of flexible framework lets them move applications and data between public, hybrid, and private environments.”
The Asia-Pacific region is as promising a place as any for IBM to seek its fortunes. Research firm MicroMarkets recently predicted growth up to $4.5 billion in the cloud analytics sector throughout Asia-Pac. IBM will not find the competition light, as the largest American firms have operated in the market for some time. In 2013, Microsoft introduced a worldwide consortium of more than 25 cloud service providers delivering services built on the Microsoft Cloud Platform, with Asia-Pacific partners charged with delivering tailored solutions to the region’s many small- and medium-sized enterprises.
Tencent Holdings Limited is a leading provider of comprehensive Internet services in China. Tencent cloud provides enterprises and developers access to a complete cloud solution with cloud service, cloud data, and cloud operations.
At Tencent’s 2014 annual Global Partner Conference, Taosang Tong, President of Social Network Group, Senior Executive Vice President of Tencent, Inc., says, “Tencent has a stable and reliable cloud computing platform, while IBM has abundant industry expertise aimed at the enterprise. We will work together to bring ‘Internet mode’ to more enterprise-level clients through cloud computing.”
IBM’s hope and reliance on cloud profits follows a rocky history of moves toward virtualized services. In 2013, the company cut jobs in its hardware divisions; last year IBM lost a bidding war on a lucrative Central Intelligence Agency cloud contract.
The company’s struggles have drawn the eye of every business journalist and media commentator. In a profile of Lance Crosby, Softlayer’s CEO, Bloomberg cast the Dallas executive as the key actor in IBM’s cloud gamble. “The challenge for Crosby … is getting IBM colleagues to simplify how they hire staff, sell products and develop tools, while also widening their customer base.”
Wired predicted austere savings measures. “Although IBM … abandoned the 2015 Roadmap, given the dumping of the chip division and the confirmation of yet another round of layoffs, it appears that IBM’s cost-cutting will be as ruthless as ever.”
Despite these detractions, the company continues to interact with enterprises on cloud concepts, announcing dozens of partnerships around the world. In the weeks since Rometty’s statements, IBM has publicized cloud-oriented business with Dow Chemical and German automotive giant Daimler.
In a public relations victory, Synergy Research Group recently named IBM the top private and hybrid cloud provider. According to IBM’s announcement of the finding, Big Blue reported that cloud revenue was up more than 50 percent year-to-date and that cloud delivered as a service was up 80 percent year-to-date with a third quarter annual run rate of $3.1 billion.
Big Blue’s Global Entrepreneur Program for Cloud Startups supports startups and entrepreneurs to IBM Cloud by offering those who qualify up to $120,000 worth of free cloud credits, as well as connections into IBM’s vast global network of enterprise clients, consultants, and more.