IBM drops $1.2B to significantly expand its global cloud footprint

IBM dispelled any notions of fear, uncertainty, or doubt as it relates to its future in cloud computing, announcing last week that it will invest another $1.2 billion this year to expand its global cloud infrastructure.

Big Blue is no stranger to spending the cash on the emerging cloud technology market. Last June, IBM made another commitment to the cloud with the $2 billion acquisition of SoftLayer, a global cloud infrastructure platform and services company. Since 2007, IBM has acquired more than 15 other companies with cloud computing expertise to further increase its cloud portfolio, spending in excess of $7 billion along the way.

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According to IBM, it is hearing from customers that location matters with the cloud, and businesses with a distributed global presence want to work with a cloud service provider that can minimize application latency. One way to do that is to have workloads operate within close proximity to where they are being consumed. That’s one of the reasons why IBM is committing to this new $1.2 billion investment, so it can expand into these areas and support the needs of these types of organizations.

As part of the company’s latest tactic for winning market share in the public cloud, it is constructing 15 new data center facilities across the United States, Canada, China, Hong Kong, India, Japan, Mexico, and the United Kingdom. IBM said this will bring the firm’s total data center count up to 40 worldwide in 2014, after adding to the existing 13 global data centers received from the SoftLayer acquisition and the 12 data centers already created by IBM. The company said it plans to have data centers in all major geographies and financial centers, and it will further expand into the Middle East and Africa sometime in 2015.

IBM officials also stated the global expansion is aimed at accelerating into new markets based on growing client demand for high-value cloud.

Lance Crosby, IBM SoftLayer CEO, further described the reasoning for the data center expansion:

The most important overarching story about this planned expansion is what each new facility will mean for our customers. When any cloud provider builds a data center in a new location, it’s great news for customers and users in that geographic region: Content in that facility will be geographically closer to them, and they’ll see lower pings and better performance from that data center.

When SoftLayer builds a data center in a new location, customers and users in that geographic region see performance improvements from all of our data centers. The new facility serves as an on-ramp to our global network, so content on any server in any of our data centers can be accessed faster.

In addition to the performance gains, the expansion should also help IBM differentiate itself from competitors by being able to offer a better compliance and service-level agreement (SLA) story. By building data centers across multiple countries, IBM should be able to better adhere to certain localized regulations such as those that state data must reside within the country. In addition to the local proximity providing better user access and speed, it should also help with SLAs and recovery by being able to bring on replacement compute and storage capacity in a nearby neighboring facility after a failure. The move should also allow IBM to better cater to multinational enterprise customers that are developing data center needs on a regional basis.

This announcement also puts to rest some questions about IBM’s SmartCloud initiative. IBM confirmed that it plans to establish SoftLayer as the default platform or foundation for all of the company’s cloud infrastructures going forward; each of the new data center facilities being constructed will be based on SoftLayer.

IBM said the SoftLayer infrastructure will provide a scalable, secure base for the global delivery of cloud services spanning the company’s extensive middleware and SaaS solutions and went on to comment:

SoftLayer’s flexibility and global network will also facilitate faster development, deployment and delivery of mobile, analytic, social solutions as clients adopt cloud as a delivery platform for IT operations and manage their business.

Businesses around the globe are increasing their use of cloud computing and data storage services thanks to Opex and Capex savings, as well as increased flexibility. According to some estimates, the global cloud market is set to grow to $200 billion by 2020. Based on that growth, IBM said it hopes to generate $7 billion in cloud revenue in 2015 alone.

As an early entrant into the public cloud market, Amazon seems to have a head start on much of the competition. However, plenty of meat is left on the bone, and a host of enterprise companies are still looking for the right cloud opportunity. IBM appears to be focusing its efforts on a clearly differentiated offering to go after its own segment of the market.

It’s also important to note that IBM is not the only public cloud vendor announcing infrastructure expansion plans. Amazon, Google, and Microsoft have each expressed their own data center build-out strategies. However, IBM’s 15 new data centers certainly dwarf anything announced by the others. When IBM’s expansion is complete, it should also prove to be a much more distributed footprint than its competitors.

Does IBM have it right? If so, once the data center expansion is completed, will the demand be there to match the capacity?

This article, “IBM drops $1.2B to significantly expand its global cloud footprint,” was originally published at InfoWorld.com. Follow the latest developments in virtualization and cloud computing at InfoWorld.com.