IBM Putting a Big Blue Stamp on Cloud Computing

IBM is moving to assert itself as the dominant player in cloud computing, and is articulating a strategy that is starting to make tangible what has previously been little more than a ubiquitous catchphrase.

The company aims to use its array of distributed data centers, deep software expertise and humongous services organization to turn cloud computing into an a-la-carte outsourcing of infrastructure and services. Its recent moves should serve notice to traditional hardware rivals like HP and Dell, cloud-computing specialists like OpSource, and service providers like Perot Systems and PwC.

IBM is also potentially tangling with Microsoft and Google on a new front by offering customers access to excess network capacity.

Big Blue originally put a stake in the ground with Blue Cloud in late 2007, offering customers access to its distributed network of mainframes, servers, mid-range computers and storage. Last week, it made two new announcements. On Tuesday, IBM said it will host large, resource-intensive applications and provide maintenance and other services. Last Wednesday, IBM struck an agreement with Amazon.com that will allow developers to use a programming infrastructure on a pay-as-you-go basis.
Blue Cloud was a counterthrust to HP's efforts to steal away IBM's mainframe customers, and its offer to host applications and manage them puts it into competition with not only the likes of OpSource, but Perot, PwC and EDS (which, not coincidentally, was acquired by HP in early 2008).

Its partnership with Amazon puts it into competition with Microsoft on an entirely new terrain; rather than fighting over customer desktops, IBM and Microsoft will compete to offer their excess infrastructure capacity, where Google also plays.

As a sign of the seriousness of its intent, IBM has made cloud computing a division onto itself, with a new chief, Erich Clementi, reporting directly to CEO Sam Palmisano.

But IBM isn't just piling a bunch of services into a new organization and calling it a package. It's creating a narrative around a utility-based approach appropriate to specific industry verticals and understanding individual business needs, rather fighting religious wars over arcane technical issues that are irrelevant to their customers.

"They're betting customers don't care about about the architecture," noted Richard Ptak, an industry consultant who was present for this week's announcements. He said IBM just has to be careful not to confuse or alarm customers with its slightly messianic vision of a "smarter planet," and stick to proving that it understands their tangible needs.