IBM to battle Amazon in the public cloud

IBM has opened the door on a public cloud Infrastructure as a Service offering for the enterprise.
The company has quietly added the Smart Business Cloud - Enterprise to its Smart Business Cloud
product line. SBC - Enterprise is a pay-as-you-go, self service (for registered IBM customers) online
platform that can run virtual machines (VMs) in a variety of formats, along with other services from
IBM stepped into the cloud early, but the market has been very dynamic the past two
Dana Gardner, principal analyst with Interarbor Solutions
The Smart Business Cloud - Enterprise is a big step up from IBM's previous pure Infrastructure as a
Service (IaaS) offering, the Smart Business Development and Test Cloud. Users can provision stock
VMs running Red Hat Enterprise Linux, SUSE Linux Enterprise Server and Microsoft Windows
Server, or they can choose from an arsenal of preconfigured software appliances that IBM, in part,
manages and that users consume. These include Industry Application Platform, IBM DB2, Informix,
Lotus Domino Enterprise Server, Rational Asset Manager, Tivoli Monitoring, WebSphere
Application Server, Cognos Business Intelligence and many others.
In what may tell the back story of IBM's own cloud computing development path, all of the images
and applications being offered from SBC - Enterprise presently run in Amazon's Elastic Compute
Cloud environment. Not all of the announced IBM cloud applications run in the IBM compute
Screenshots and a video demo show a familiar sight by now for cloud users: a point-and-click
provisioning system in a Web interface. Apparently sensitive to its enterprise audience, IBM has
taken some pains to offer higher-end features, including access and identity management control,
security and application monitoring tools, and VPN and VLAN capabilities, as well as VM isolation.
IBM technical support will also be available.
IBM has been a consistent supporter of open source software for the enterprise market and the
inclusion of Red Hat Enterprise Linux (RHEL) and SUSE Linux are indications that IBM feels those
products have the chops for big customers running Linux. Being based on Linux (Blue Insight) also
makes it easy for IBM to port its technology into an Amazon-type network.
Analyzing IBM's entrance into public cloud
Some industry observers say they believe the cloud-based product disclosure is overdue, and a step
in the right direction. The move is a natural one if IBM wants to extend the lofty position it currently
holds in on-premises application integration.
"IBM needs to start talking about integration as a service (in the cloud)," said Dana Gardner,
principal with Interarbor Solutions in Gilford, N.H. "They are a market leader in enterprise apps
integration in the physical space, so the next step is to be a leader in the cloud space. They seem to
be going in the right direction."
IBM looks for cloud computing projects in unlikely places
Gardner, along with other analysts and IT pros, have criticized IBM's overall cloud strategy as
"scattershot" the past couple of years. After getting off to a promising start through a number of key
acquisitions and technology introductions, the company's efforts appear to have lost momentum and
"IBM stepped into the cloud early, but the market has been very dynamic the past two years,"
Gardner added. "When people think of the cloud now, they think about mobile, big data and
analytics, along with cost reductions and simplifying. IBM hasn't stepped up to the latest zeitgeist
around cloud to take all this on."
Other analysts said they believe IBM's delivery of its SBC - Enterprise is coming in the nick of time.
It fully anticipates that fast-moving competitors, such as, Google and Amazon, will
debut much more capable products and services in areas where IBM still hasn't ventured.
"[IBM] is still looking at a pack of hungry competitors who have little trepidation about moving their
cloud initiatives forward, moving way beyond the Infrastructure as a Service level offering things
like run-time support and tools," said one analyst who requested anonymity. "Services are going to
get a lot more sophisticated from the Googles of the world."
Competitive pricing disclosed
An official IBM Charge Schedule lays out price per instance in four tiers: Copper, Bronze, Silver
and Gold. A Copper RHEL instance costs $0.19 per hour, and Gold is $0.46 per hour. Windows
instances start at $0.10 per hour.
IBM needs to start talking about integration as a service (in the cloud).
Dana Gardner
IBM will also sell reserved capacity, just as Amazon Web Services (AWS) does, for those looking
for a long-term discount. Reserved Capacity is significantly cheaper, although a six-month
commitment will cost a minimum of $1850 per month.
A Reserved Capacity RHEL instance costs $0.0154 per hour and a Gold instance will run you $0.30
per hour. Windows pricing starts at $0.064 per hour. Licensing is either determined by the
application you consume or bring-your-own-licensing (BYOL). The pricing appears to be in line
with other public cloud services like AWS and Rackspace.
IBM makes its entrance to the public cloud market in a big way. The service is apparently live and
available to order right now. recently put IBM in its top ten list of
cloud providers based just on the strength of its success with the Smart Business Test and
Development Cloud, a $30 million business after little more than a year in operation.
With its long history of delivering IT services, software and support to the Global 2000, some
believed it was only a question of time until IBM made a decisive move into the cloud computing
marketplace. It's too early to say if it will dominate the public cloud space, but it has everything it
needs to do so, including global data centers, connectivity, service delivery capabilities, and the allimportant
enterprise user base.
Ed Scannell is an Executive Editor and Carl Brooks