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Introduction

IBM is aggressively investing in the cloud, buying numerous companies since 2010 and plowing capex into new data centers. IBM’s cloud push puts it in direct competition with other network operators, including the largest telcos and other ICPs.

Highlights

  • The IBM Cloud network of data centers and related infrastructure is used by IBM's four other strategic business areas (analytics, mobile, social, and security). As such IBM is investing heavily in both new data center construction and strategic alliances with global data center operators.
  • IBM is positioned well to profit from the growth of the cloud in telecom, selling technology needed to build the cloud’s nodes and selling cloud services to the broader market. IBM Cloud has one of the largest installed bases of data centers around, and the company has a strong track record of partnering or buying the resources needed to fill gaps.
  • The company has recently reorganized to better sell to the telco vertical, through the Infrastructure Services Group. It already has a large telco revenue base of well over $5bn/year. IBM hopes this will grow as telco capex shifts more to network-based software, white-box platforms, systems integration, and professional services – all areas where IBM is strong

Features and Benefits

  • Reviews IBM's recent financials and strategic direction
  • Analyzes IBM's Cloud business unit – its infrastructure and positioning
  • Assesses IBM's role as a vendor to telcos
  • Identifies IBM's existing network infrastructure assets

Key questions answered

  • What is IBM's strategy as it relates to the cloud?
  • What are IBM's strengths and weaknesses as an ICP?
  • What vendors does IBM use to build out its cloud network? What is IBM's contribution?
  • How is IBM positioned relative to competitors in selling technology and integration services to telcos, and cloud services to the broader market?

Table of contents

Summary

  • In brief
  • Ovum view
  • Recommendations

Evaluation

  • Introduction
  • Business model and financials
  • Competition
  • IBM sales to telcos
  • Start-ups, M&A, and partnerships
  • Technology and networks
  • IBM’s role as vendor to telcos complements its cloud business

Appendix

  • Network and Technology Profile methodology
  • Further reading
  • Author

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