IBM Commits $1.2 Billion To Cloud, Adding 15 Global Data Centers

IBM is kicking cloud expansion into high gear this year, planning to invest $1.2 billion in expanding its cloud infrastructure to 15 new data centers worldwide.

Jason Verge

January 17, 2014

3 Min Read
Lance Crosby, CEO, IBM SoftLayer
IBM SoftLayer CEO Lance Crosby with some of the servers powering the SoftLayer cloud. (Photo: IBM)

IBM will commit over $1.2 billion to significantly expand its global cloud footprint, the company said today. IBM plans to deliver cloud services from 40 data centers worldwide in 15 countries. The company will add 15 new data centers worldwide adding to 13 SoftLayer global data centers and 12 from IBM.

Data centers will be added in China, Washington, D.C., Hong Kong, London, Japan, India, Canada, Mexico City and Dallas. With this investment, IBM plans to have data centers in all major geographies and financial centers. The company plans to expand in the Middle East and Africa in 2015.

"IBM is continuing to invest in high growth areas," said Erich Clementi, senior vice president of IBM Global Technology Services. "Last year, IBM made a big investment adding the $2 billion acquisition of SoftLayer to its existing high value cloud portfolio. Today's announcement is another major step in driving a global expansion of IBM’s cloud footprint and helping clients drive transformation."

Since 2007, IBM has invested more than $7 billion in 15 acquisitions to accelerate its cloud initiatives and build a high value cloud portfolio. The company says it holds 1,560 cloud patents and processes more than 5.5 million client transactions daily through IBM’s public cloud. IBM hopes to achieve $7 billion in annual cloud revenue by 2015.

By acquiring SoftLayer last year, IBM gained a cornerstone for its cloud offerings. This type of investment is one reason that SoftLayer viewed IBM favorably as a suitor, as Big Blue's deep pockets can grow its infrastructure faster than SoftLayer could have as a stand-alone operation.

The Global Nature of Data Movement

Part of what’s driving this expansion is the need to store cloud infrastructure globally. The combination of distributed local data centers and a global network allows clients to place data where it’s required, as well as gives the ability to consolidate data as needed. One of our cloud predictions for 2014 was that the lines of cloud and CDN would continue to blur; a global footprint like this allows customers to optimize application performance and responsiveness.

Customer Cloudant, providers of distributed database as a service (DBaaS), provides one example of this trend in action.

“Cloudant’s global expansion rate is fueled by the always-on commitment we make to our customers,” said Cloudant CEO Derek Schoettle. “Our mission is to be the standard data layer for Web and mobile applications. That mission requires us to push application data to the network edge, in as many locations as possible. Expanding beyond IBM SoftLayer’s current footprint presents significant value to our business. The investment IBM is making to expand their global footprint will not only help fuel our growth, but the growth of thousands of Cloudant users worldwide as well.”

Mobile and social data proliferation is necessitating edge computing. A truly global footprint enables customers to serve up data close to the customer. A study by IBM Center for Applied insights reveals by some  estimates, the global cloud market is set to grow to $200 billion by 2020.  Cloud continues to be driven by businesses and government agencies deploying cloud services to market, transforming their business practices for the cloud paradigm.

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