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IBM throws $1.2 billion at its global data centre network

Sam Shead | Jan. 20, 2014
Investemnt follows last week's pledge to put $1 billion into Big Blue's Watson Group.

IBM today announced plans to commit $1.2 billion (£730 million) to expand its global cloud footprint through a number of new data centres set to open this year.

The company said it will use the money to open up to 15 new data centres, bringing IBM's worldwide data centre count up to 40 across 13 countries.

The location of the new data centres was not speficied, but IBM did say it will be launching "cloud centres" in London, Washington D.C., Hong Kong, Toronto, Japan, India, China, Canada, Mexico and Dallas.

The company said the cloud expansion will ensure that IBM has at least four data centres in Europe, Latin America, Asia and the Americas, adding that it plans to expand in the Middle East and Africa in 2015.

IBM believes the global expansion will help it accelerate into new markets where the company has seen growing client demand for high value cloud.

IBM also plans to integrate the cloud platform provided by recently-acquired SoftLayer into its wider cloud portfolio, revealing that the investment will go towards doubling the amount of cloud capacity available on SoftLayer, which already supports 130 million online gamers after IBM signed deals with games developers Multiplay and KUULUU.

Indeed, SoftLayer will also become the "foundation" of IBM's varied cloud portfolio, meaning that the SoftLayer infrastructure will provide the base for the global delivery of cloud services spanning IBM's middleware software and solutions.

IBM said the new data centres will enable SoftLayer to provide high performance services to customers across the globe quickly as they won't have to wait for servers several countries away to respond to clicks.

"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 (£1.22 billion) acquisition of SoftLayer to its existing high value cloud portfolio. Today's news is another major step in driving a global expansion of IBM's cloud footprint and helping clients drive transformation.

"IBM recognises the universal need to deliver mission-critical workloads in a cloud environment that are secure, reliable and built on open standards as contrasted with the commoditised cloud model that emphasises low costs, instead of business growth and innovation."

Through the acquisition of SoftLayer, IBM is aiming to compete with several other companies in the infrastructure-as-a-service market, namely market leader Amazon Web Services, but also firms like Microsoft, Google and Rackspace.

John Dinsdale, chief analyst and research director at Synergy Research Group told Techworld: "AWS remains in a league of its own. IBM/Microsoft/Google all have to work very hard just to maintain market in a market which is growing so rapidly. IBM is working very hard, and acquiring SoftLayer made a difference, but it remains a fraction of the size of AWS in this market. IBM's third quarter 2013 revenues (which now includes SoftLayer) equated to only 22 percent the size of AWS revenues.


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