Cloud Giant IBM Grows Larger with Inflexible Solutions for the Enterprise

IBM announced in January that they have invested $1.2 billion to launch 15 new data centers across the U.S., China, Hong Kong, India, Canada and the U.K. to increase their global public cloud services, as an alternative to Amazon. But, is this really what the industry and enterprises need?

IBM has had cloud offerings across Europe, including Switzerland, for some time, but they haven’t gained much traction. This is likely due to the disconnect between traditional enterprise service provision and the disruptive cloud delivery mechanism approach to sales and provisioning. Even traditional IBM customers have chosen pure play cloud offerings over their own solution. The fact that IBM is a U.S.-based provider and subject to U.S. laws and data access regulations clearly hasn’t helped matters outside of the US.


If IBM is planning on going after Amazon’s current customer base, then they will likely have a difficult time. Admittedly, Amazon’s customer base receives great service and support. But, this is not always the case. Many use cases that don’t work with AWS’ more restrictive approach. So, if IBM’s cloud offering can’t address Amazon’s inflexible VM and resource provisioning restrictions, users will have to deal with yet another environment that doesn’t fit their needs.

In fact, IBM’s Softlayer cloud technology, which IBM acquired in July for $2 billion, is even more restrictive than Amazon. Therefore, it won’t achieve the ultimate goal of extending the reach and adoption of public cloud computing. Which would be much easier to accomplish by a more flexible offering. Building data centers worldwide certainly soaks up a great deal of capital and makes headlines. However, it doesn’t bring something new to the table for potential customers of the cloud.

Unlike industry giants that offer pre-packaged cloud services and server instances, CloudSigma isdesigned for enterprises with specific needs, for example our media and research science customers, use our public cloud where a flexible, pay-as-you-go approach is needed to accommodate high-performance computing (HPC) requirements in the most cost-effective way possible. That means granting customers access to seamless CPU and RAM scaling when they need it. Also, advanced Vm customisation options to optimise application performance. This avoids over-provisioned and underutilized servers, or suffering performance issues. Amazon can’t meet this need, and they don’t try to.


It’s clear that Amazon does not lack capital; they are the 800lb gorilla in the room. So, going after them by pouring in lots of funding for data centers isn’t going to dent their success. There are many new data centers coming onto the market every day, only forward-thinking innovation can. IBM has had a difficult time transitioning from hardware to software, resulting in an earnings slump for six straight quarters.

For IBM, it would be more prudent to invest in a colocation partnership. In order to gain access to a distribution network that extends globally and allows the company to focus on innovation. For instance, by partnering with Equinix’s global platform of carrier-neutral data center services, we’re able to provide our customers with a foundation to develop platform (PaaS) and software (SaaS) offerings to further expand our reach, while focusing on further innovation and assisting the verticals in which Amazon and IBM’s approach just won’t cut it.

If you’re interested in seeing CloudSigma’s flexible pay options, check out our pricing calculator to see how much we can save you.


About Robert Jenkin

Robert is a Co-Founder and CEO of CloudSigma along with his long-time friend Patrick Baillie. Robert & Patrick had a vision for a different style of cloud focused around customer requirements not computing frameworks created by the service provider; an open environment where end-users could define their infrastructure in a highly flexible way with little or no restrictions, just like they were used to doing in their own private environments. Their shared vision was the genesis of CloudSigma in 2009 in Zürich, Switzerland and as with many great things, it began life sketched out on a napkin! Robert previously has experience in early stage venture capital and corporate finance in the City of London. Robert is a graduate in Economics from Cambridge University.