Can IBM Invest its Way into the Cloud?

Can IBM Invest its Way into the Cloud?

Through a series of acquisitions and investments over the last year or so, IBM has been steadily building its Cloud presence, in hopes that it can catch up to those that have been invested for years already. But, will customers buy in?

To get a clearer picture of how successful IBM could be as a Cloud provider, let's step back a bit and profile the last year's acquisitions and investments by the once juggernaut.

In February, IBM announced plans to invest $1 billion in Cloud-related software and services for 2014, but the company has already been on a steady acquisition and investment tear. In June of 2013, IBM acquired SoftLayer for around $2 billion, a hosted and cloud service, which was then turned into IBM Cloud Services Division. September 2013 saw IBM invest $1 billion in Linux and open source to overhaul its Power Systems servers, a notable step toward its Cloudy goal. In January 2014, the company spent over $1.2 billion to rollout new datacenters worldwide. And, now, just in February 2014 a new acquisition and an investment were made for another $1 billion, bringing NoSQL Cloud database, Cloudant, into the IBM fold and opening up its BlueMix technology to beta.

Based on these steady acquisitions and investments, it would appear that IBM is well on its way to becoming a strong player in Cloud services. But, IBM has to fight a certain stigma along the way. IBM is in no way considered a youthful and vibrant entity. From both a business and consumer perspective, IBM is seen as the buttoned-up, full suit and wide tie (with hanky in the pocket) image.  That's good for IBM in a staunch, 1970's style business era, but that doesn't really exist anymore. Today's business workers are energetic, highly mobile, wear Dockers and loose shirts, and are as comfortable with technology as they are with sharing their bathroom break experiences on Facebook.

When you compare IBM to the companies it seeks to compete with, IBM still looks old and dated. When most think of IBM, they visualize black-and-white pictures of workers sitting in front of a wall of bookshelf-high hardware, spinning magnetic reels that make made-up electronic noises from a bad Sci-Fi movie. Compare that to Google, Amazon, or even Microsoft (who has its own youthful perception problem to surmount) and you realize that IBM has a perception problem that may be impossible to overtake. Talking with peers about this recently, they all produced a similar observation: IBM means overpriced and extremely difficult to implement. Granted, the hosted Cloud is supposed to eliminate difficulty, but how would an IBM solution look any different than the history that has already been written?

Security, trust, and privacy remain the top indicators for Cloud success. It's truly less about technical prowess and technology capabilities, because any vendor can buy its way into contention. It's mostly about perception and trust. As we've watched, Amazon and Microsoft lead in the perception of trust, but they offer very different customer models. Amazon only provides hosted solutions, while Microsoft provides private, public (hosted), and hybrid to ensure the most customer coverage possible. Google, on the other hand, continues to struggle with mindshare, even though the company appears to be the provider full of youthful vigor and innovation.

For IBM to be even moderately successful pushing into the Cloud, the company needs to be a mixture of both. Customers need to trust them and, somehow, IBM needs to prove relevancy to a more energetic set of workers that ditched the suit and tie 10 years ago. Image is everything these days and unfortunately, image sells over adequacy. IBM needs a new image, one that means loosening that top button.

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