IBM’s Big Bet On ‘Hybrid’ Cloud, Will It Work?

IBM Hybrid Cloud

IBM Hybrid Cloud- IBM is betting big on the next emerging cloud market  — the “hybrid” multicloud.

That’s a computing environment that combines multiple cloud providers and clouds—public, private, software-as-a-service.

And that’s why the technology giant is paying bucks to acquire Red Hat.  The open source technology company will bring to IBM an innovative hybrid cloud platform, and a vast open source developer community.

IBM’s strategy begins with the premise that most companies view the cloud opportunity as incorporating their on-premises facilities, private clouds, and public clouds. “Working with thousands of enterprises across the world, IBM knows that a ‘one-cloud-fits-all approach doesn’t work,” says Steve Robinson, General Manager, IBM Cloud Labs. “Instead, we are seeing clients take a hybrid multicloud approach that allows them to choose multiple cloud providers and clouds—a mix of public, private, software-as-a-service—that best meet their different needs. This gives them the open capabilities, security and flexibility to migrate critical workloads to the cloud, but also ensures they can tap into new innovative services such as AI, blockchain and analytics.”

“This is not an unusual move,” Michael Brook, CTO and Co-founder of Pitchly. “IBM is in the AI/Machine Learning race with Microsoft& AWS,” Brook.  “While IBM took the branding lead with Watson, they have lagged behind in transitioning to a cloud model. You should expect announcements soon of Watson-enabled RedHat applications.”

IBM’s bet on hybrid cloud comes at a time the company is trying to reverse a prolonged decline in revenues and profit margins that has Wall Street fleeing its stock.

IBM’s Gross MarginKOYFIN

IBM’s Stock PriceKOYFIN

Will the bet pay off? It depends on a couple of things. One of them is the validity of IBM’s premise. Is the cloud market really moving from “public” to hybrid?

Some analysts think so. Stephen Elliot, Program Vice President, IDC, is one of them. “The old idea that everything would move to the public cloud never happened,” says Elliot. “Instead, the cloud market has evolved to meet the needs of clients who want to maintain on-premises systems while tapping a multitude of cloud platforms and vendors. The challenge for this approach is integration. Many IT companies have been talking about multicloud, but to date the user experience has been fragmented. IT and business executives are looking for multicloud capabilities that reduce the risks, and deliver more automation throughout their cloud journeys.”

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Article Credit: Forbes

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