Data from 451 Research’s Cloud Price Index suggests that IBM is missing a trick. By going all-in and baking SoftLayer with Bluemix, IBM would gain a leading position in the market in terms of completeness of services and global availability, as well as finally delivering a single user experience.
Owen over at 451 suggests that IBM hasn’t yet merged SoftLayer into Bluemix totally, missing out on a high ranking in cloud providers (by functionality, geographic availability, etc.). Also: “The company claims $10.2bn in cloud revenue, a growth rate of 46% Y/Y, and 20,000 new users per week.”
Source: CPI case study: IBM and SoftLayer would be greater together
In a story about Mirantis running on IBM SoftLayer:
Gauging the uptake of OpenStack in enterprises has been tricky, whether it’s deployed afresh or to replace existing Amazon EC2 or VMware installations. Interest in hiring OpenStack talent is growing, and vendors such as Red Hat are tying in OpenStack closely with their respective Linux distributions. But signs show that the average OpenStack installation is rather modest and OpenStack has struggled to find larger market share — possibly, as InfoWorld’s Dave Linthicum observed, due to its continued lack of robust networking features.
Hopefully company’s using OpenStack will start talking more, then we’ll have a fuller picture of it’s adoption, namely, in private cloud.
In our 451 usage surveys, OpenStack ranks high – second, next to VMware, see chart above – so it seems like there’s usage out there. Quoting from that TheInfoPro piece:
While 36% of respondents already have a cloud platform in production use, 35% will be selecting and deploying a cloud platform for the first time in the next two years or more, and it is not unreasonable to expect that some early adopters will switch horses as the race continues to evolve. As a direct result of its dominance in the enterprise workload virtualization market, and corresponding investment in licensing and expertise, VMware is usually guaranteed a place at the table. However, it is by no means guaranteed a leading position in the cloud platform race that is still very much in its early stages. – See more at: http://theinfopro.blogs.451research.com/index.php/2014/06/the-openstack-tipping-point-will-it-go-over-the-edge/#sthash.4WcArbgu.dpuf
One of the better summaries of enterprise OpenStack adoption
The company plans to open 15 new data centers this year, more than doubling the cloud capacity it acquired when it purchased SoftLayer last year for $2 billion. It plans to combine the new data centers, the existing SoftLayer data centers, and the data centers it already ran before the SoftLayer purchase into a single operation that would provide public and private cloud services to its customers, as well as provide services for internal operations.
And, these guys can’t help themselves with the massive revenue targets:
IBM is estimating that global cloud revenue will grow to $200 billion per year by 2020. IBM hopes to generate $7 billion in cloud revenue in 2015.
IBM building out it’s public cloud, doubling capacity this year
The combination of high profitability, heavy competition, lack of differentiation, and volatile reputations leads to frequent mergers and acquisitions.
As just one small example: if you were an EV1 Servers customer ten years ago, a 2007 merger forced you to become a customer of The Planet instead. But in 2010, SoftLayer — which was formed by ex-executives of The Planet — pulled a NeXT and “merged” with The Planet by taking it over, “sunsetting” its infrastructure, and making you a SoftLayer customer… until a few months ago, when IBM bought SoftLayer. Now you’re a customer of a Wikipedia article with “multiple issues”, wondering where your commodity web host fits in “a branded ecosystem of cloud computing products and solutions from IBM” as they assure you nothing will change for the worse.
The hosting industry, from a developer’s perspective
IBM is letting SoftLayer function autonomously for two years. “This will take us through 2014, as we figure out each other,” said Crosby. “They’re taking the approach that no one knows the business as well as we do.”
SoftLayer to be independence for two years at IBM
It looks like Nirvanix has struck a deal with IBM to take over the beleaguered cloud storage startup’s customers. Simon Robinson as my analyst house, 451 Research, has a good, free piece on why Nirvanix failed and its impact to cloud and cloud storage if you’re interested.
Nirvanix migrating customers to IBM SoftLayer
From Louis Columbus’ discussion with IBM SoftLayer at 451’s HCTS conference:
The majority of the top ten customers [I assume by revenue] Softlayer has today are running large-scale clusters of Hadoop, with 40 Hadoop clusters being commonplace. Lance Crosby mentioned these customers are very sophisticated in their use of Hadoop and many of them are in consumer products companies, looking to gain greater insights into customer behavior.
Bare metal servers running Hadoop are one of the fastest growing areas of the Softlayer business right now. Simon West made an excellent point that running Hadoop on bare metal servers instead of through virtualized environment leads to a higher level of throughput, given Softlayer’s internal testing results. Bare metal servers continue to accelerate in the industry and Softlayer’s executives confirmed they are seeing an acceleration of demand in this area.
All that big data takes a lot of compute, esp. as you want to speed it up more. The other thing to point out here is the re-rise of “B2C,” that is, businesses using IT more and more to interact with and get money from consumers, vs. other businesses.
Expaning use of Hadoop at SoftLayer
So what is the impact of IBM’s acquisition of SoftLayer? This analyst believes this acquisition may be a fundamental signal to competitors that the old world of outsourcing is fading and that the only way to the future is delivery of services via an “IT” utility called the cloud. Just consider that 80% of U.S. buyers indicate that they will have transformed 50% of their IT environment to a cloud by 2017 and that they will not have all the resources to manage their own cloud.
—David Tapper, IDC
Tapper also covers a good history of IBM getting into “utility computing,” all the way back to 2000-ish, if not 1957.
I met and talked with Tapper at the recent Dell analyst event. I liked him a lot: he was pretty much as abrasive/honest as the UK analysts! As in this piece, what I like is people who bring the full, shaggy-dog context to what seems like a point in time in the IT industry continuum.