IBM said it will expand the number of data centres it offers clients around the world by 25 percent to meet fast-rising demand for internet-based services.
The outfit has quadrupled the number of cloud data facilities it offers around the world to 49 in the past 18 months, responding in part to laws requiring the local retention of data following revelations over US government Web surveillance as well as increased corporate compliance rules.
The company said on Wednesday it has now struck a partnership with data centre provider Equinix for nine more cloud centres in Australia, France, Japan, Singapore, The Netherlands and the United States. It is also opening up three new cloud computer facilities of its own in Germany, Mexico and Japan.
Angel Luiz Diaz, vice president in charge of IBM’s cloud computing business, told Reuters that the company had a good year which was a “breakthrough year in cloud.”
IBM’s cloud revenue amounted to $4.4 billion in 2013 and was up by 50 percent in the first nine months of this year, it reported in October, making it one of IBM’s fastest-growing businesses, although it still accounts for only a fraction of the $94 billion in total revenues which IBM is expected by analysts to generate this year.
It looks like IBM’s multi-year deals of more than $4 billion that are fuelling the company’s expansion in data centres.
IBM also said it had reached a cloud services deal with National Express Group to enable the UK-based bus and trains operator to offer commuters up-to-the-minute train schedules and what it said would be Britain’s first postcode-to-postcode journey planner.
Under the deal, IBM will release what it described as the first wave of IBM MobileFirst for the iOS operating system.
The applications also support web services and big data and analytic abilities to the iPad and iPhone. IBM said MobileFirst for iOS is aimed at enterprise sized companies in banking, retail, insurance, financial services, telecomms, governments and airlines.
Customers who have already signed up include Citi, Air Canada and Spring.
Philip Schiller, a senior VP of Apple marketing, said: “The business world has gone mobile and Apple and IBM are bringing together the.. technology with the smartest data and analytics to help businesses define how work gets done.”
The apps are intended for secure environments, linked to core enterprise processes and analytics.
Apps include Plan Flight and Passenger for airlines, Advise and Grow for the banking sector; Retention for insurance companies; Incident Aware for law enforcement; Sales Assist for Retail and Expert Tech for the telecomms market.
And IBM said 60 percent of enterprises believe they are being outgunned in the cyber war.
Chief Information Security Officers (CISOs) think that sophisticated external threats is their biggest challenge – with 40 percent believing that they top other challenges they face.
Data leakage prevention, cloud security and mobile security are the top three areas that CISOs believe are the areas that need addressing urgently.
Of the respondents surveyed by IBM, 90 percent have either adopted or will adopt cloud initiatives and they expect their cloud security budgets to increase over the next five years.
Only 45 percent of the CISOs think that mobile and device security is being adequately addressed.
With revenues of $8.8 billion, up 5.1 percent from the same period last year, 25 exabytes shipped in the quarter, said IDC. Capacity shipments soared by 42 percent during the quarter, compared to Q3 2013.
IDC said sub $100K external array revenues grew by over six percent during the quarter, but shipments ODMs (original design manufacturers) directly to hyperscale datacentres showed positive growth.
EMC remains at the top spot for the quarter, followed by HP, Dell, IBM and Netapp.
ODM direct sales accounted for 24 percent of the market however, outstripping the traditional vendors. And this trend is continuing, as we’ve reported previously, with ODMs also shipping more and more servers directly and bypassing the brand names,
Those were figures from Gartner. But data from its deadly rival IDC indicate that things were less gloomy for server vendors in the third quarter of this year.
IDC said vendor revenues worldwide rose by 4.8 percent, year on year, to represent revenues of $12.7 billion.
This, said IDC, is the second quarter in a row that the server market has shown a year on year increase in revenue terms.
And shipments in the quarter improved 5.7 percent year on year, representing 2.38 million units. This is largely down to increased spending on hyperscale datacentres. IDC believes it is seeing signs of companies refreshing their servers, which is good news for 2015 too.
There is a difference depending on the type of server. Volume systems showed 8.8 percent revenue growth, midrange systems showed an 18.4 percent growth year on year. But high end enterprise systems plummeted by –23.2 percent, year on year.
IDC figures show HP is n number one place, followed by IBM, Dell, Cisco and Oracle. The “ODM Direct” category is interesting because these are largely Taiwanese companies producing unbranded boxes for multinationals – with prices to match. This chart shows the changes.
Like Gartner, IDC saw a recline in non X86 servers – the thirteenth consecutive quarter of revenue decline. IBM is in pole position here, with a share of 60.8 percent share. Blade servers accounted for 18 percent of total server revenues in the quarter.
Gartner said that growth seen in the second quarter of this year was “a short lived phenomenon and marginal revenue growth…highlights the fragility of demand”.
But despite this, revenues grew for the third consecutive quarter following 10 previous quarters where revenues declined.
HP managed to grow its revenue lead in the regions with 6.4 percent growth, although shipments declined by 8.2 percent. The growth was largely accounted for by demand for rack optimised and blade system.
Dell managed to displace IBM as second in place in terms of both revenues and shipments. It managed to grow nine percent in revenues and 3.4 percent in shipments. IBM, of course, is ridding itself of its X86 business to Lenovo, while its RISC shipments were hit by a fall in demand for Unix systems. Its lucrative mainframe business is in stasis as Big Blue readies new launches.
Gartner thinks one of the problems is that IT departments in enterprises are struggling because there are datacentre modernisation initiatives which means they are taking their eyes off the ball in the traditional server marketplace.
If RISC, the Intel Itanium and Unix revenues are counted as one, they fell in the quarter by 13.2 percent.
And now James Lovell, European retail guru, has got his analytics engines to work and notices that although sales fell compared to last year, the percentage of sales made on mobiles rose by around a third.
He said mobile phone usage as a percentage of overall sales rose by 42.88 percent, and tablets used to buy stuff rose by 12 percent.
The average order value on “Black Friday” was £88.86 percent, and mobile traffic represented 59.8 percent of all online traffic in the UK.
Contrasting different mobile operating systems, Lovell said Android OS sessions as a percentage of overall “Cyber Monday” sales grew by 55 percent, but only represented 11 percent of the overall sales spend.
But the desktop is not dead – over half of all online sales were made by people tip tapping into whatever flavour of Windows they’re being forced to use.
Amro thinks that the men in suits are exactly the sorts of types it wants running its cloud operations. However it is a case of “better the devil you know”. IBM has been running Amro’s computer services for a while now.
Under the first €1.5bn deal in 2005, 1,500 people in IT lost their jobs when the bank outsourced most of its IT to the global outsourcing arm of IBM.
At the time, IBM took over the management of the datacentres for the bank’s commercial and consumer clients, private clients, asset management, and new growth markets.
IBM has had some difficulty attracting much interest in its internet-delivered services, as it seems a bit outclassed by the likes of Oracle, Microsoft and Amazon.
IBM will provide fully managed services for mainframe computers, servers, storage and end-user computing as well as a help desk and other technical support. IBM did not disclose financial details of the deal.
Actually it has been a good few weeks for IBM. It recently won a 7-year outsourcing contract from Germany’s Lufthansa worth $1.25 billion that will see the U.S. company take over the airline’s information technology infrastructure services division and staff.
That’s according to a report by market intelligence firm IDC, which said during the first half of this year, the market grew by 10.7 percent, compared to the first half of 2013.
IDC thinks the market will continue to grow in the next five years with a compound annual growth rate (CAGR) of 10.5 percent.
Areas of growth include mobile application development and device management, security software, systems software and engineering applications.
Shweta Baidya, a senior market analyst at IDC, said that large and small to medium enterprises want to curb capital expenditure and move into the cloud.
Virtualisation and cloud players like Vmware, Salesforce and Red Hat generated good business, and database and analytics companies including Teradata, Oracle, Qlik and others saw double digit growth.
IDC provided a pie chart which shows market share in the region.