IBM jumps into cloud, customers tip-toe behind

IBM SmartCloud's cloud computing service aimed at enterprise customers

In announcing its cloud computing services on Thursday, IBM stressed repeatedly that private clouds -- or those that exist behind the corporate firewall -- are as important to its strategy as those in the public realm.

It seems like a wise strategy, given that even the IBM customers brought to a company event here to showcase their cloud development efforts were either not using the public cloud at all, or still in the early stages with it.

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Tony Kerrison, CTO at financial services firm ING, said his company is running "zero" applications today in the public cloud. Like other financial services firms, ING is heavily bound by regulatory requirements, as well as strict European Union rules about where its customer data can be stored.

Even putting email in the cloud, which is first on Kerrison's wish list, will be "a challenge" because of the regulatory issues, he said in an interview at IBM's Cloud Forum in San Francisco, where IBM announced its latest public and private cloud offerings.

Carlos Matos, senior director for infrastructure management and systems integration at Kaiser Permanente, said his company "dipped our toes" into a cloud initiative this year. Scott Skellenger, senior director for global IT operations Illumina, a life sciences firm that provides genotyping services, declined to specify what applications, if any, his company is running in the cloud.

That's not to say IBM doesn't have plenty of customers using its cloud services. But it highlights the challenges of getting enterprise customers, especially in data-sensitive industries such as health and finance, to embrace public services.

IBM announced two tiers of cloud service at the event Thursday, under the umbrella name of the IBM SmartCloud.

One, the Enterprise service, is an infrastructure-as-a-service offering similar to those from Amazon Web Services. Customers can deploy Windows or Linux applications in IBM data centers and IBM says it will guarantee 99.5 percent uptime annually.

The other, Enterprise Plus, offers higher levels of security and a 99.9 percent uptime guarantee, plus the option to run virtual machines on dedicated hardware, rather than servers shared with other customers, and the option to use AIX as well Windows and Linux.

Enterprise Plus users also get more flexible management, security, and availability options. IBM will manage just the hardware and hypervisors, for example, or almost any combination of the OS, middleware, application, or entire business process.

"IBM is trying to go a step further than the standard cloud offerings already out there, in terms of security, reliability, and availability," said IDC analyst Jean Bozman.

The SmartCloud services aren't entirely new -- IBM has offered them on a custom basis for some time. But it's the first time they are being widely offered as a listed product with a fixed menu of options, said Steve Mills, senior vice president and group executive in charge of IBM's software division.

Pricing wasn't immediately available, but some published reports said the basic Enterprise service is comparable in price to Amazon Web Services, or a little more expensive.

They service will compete with those from Hewlett-Packard, among others, which made its own cloud pitch last month. But while HP hasn't said when its offerings will appear, IBM said its Enterprise service is available now worldwide, and Enterprise Plus will follow later this year.

IBM is also offering the products behind the services as a hardware and software package that companies can deploy in their own data centers. It includes numerous Tivoli and Systems Director products, including Tivoli Service Automation Manager and Tivoli Provisioning Manager for Images.

Public and private clouds are "equally valid," Mills said. "There's nothing about the attributes that you can't implement inside a business," including provisioning new apps in a standard, automated fashion across a pool of virtual computing resources.

The biggest challenge for enterprises will be management, according to IBM, in particular the proliferation of virtual machines and software images. It hopes to distinguish itself from other cloud providers by the level of security and management it says it can offer.

"We see the proliferation of images happening at a rate that makes the proliferation of Intel machines look like it was happening in slow motion," said Robert LeBlanc, IBM senior vice president for middleware.

IBM officials played down the suggestion that they will be competing more directly with partners, such as telecommunications providers, who have been offering their own cloud software based on IBM software. Such "coopetition" is normal in the industry, Mills said.

Although ING isn't using a public cloud, it is deploying "utility" applications such as social media tools on a private cloud, Kerrison said. It has a mix of x86 and IBM Power systems, and the company uses IBM's Tivoli software to abstract the hardware underneath and manage all the servers "at a higher level," he said.

The ITIL best practices for IT are geared towards physical infrastructure, Kerrison noted, so ING has developed its own processes to ensure software stacks in its cloud are as standardized as possible. That makes them easier to manage, and also helps with software development lifecycles, he said: "Developers are clear when new stack releases are coming out. We treat our stacks really like a software release," he said.

ING has found that no single vendor can move a company through the whole process of virtualizing systems and building an internal cloud, Kerrison said.

"I'd recommend forming an ecosystem of partners that's right for your business," he said.

Skellinger, of the life sciences firm Illumina, said moving to the cloud requires greater "business acumen" in areas like contract management.

"Sometimes the skills you needed yesterday aren't going to be the ones you need tomorrow," he said.

Copyright © 2011 IDG Communications, Inc.