Gartner’s latest magic quadrant report on cloud infrastructure puts IBM in the bottom left quadrant, as a niche player, alongside Oracle and Alibaba. IBM is hoping the £34bn it has spent on buying Red Hat will propel its cloud infrastructure strategy.
IBM’s core enterprise customers do not necessarily expect Big Blue to sell them the latest, greatest tech. They often see IBM as a trusted partner, providing systems that support core business functions. As the saying goes: “No one ever got fired for buying IBM.” One could argue this has left those companies that entrust IBM with their technology decisions, on a slower tech adoption curve. Yes, IBM has blockchain, Watson for deep learning and a quantum computing roadmap, but it takes a long time for the culture of a large enterprise to change. And this slowness to adapt arguably affects both its customers and IBM itself.
IBM used to be good at reinventing itself: from a hardware business to a software business and then a services business. Each change has seen IBM offer its traditional enterprise customers a way to evolve their IT function. The cloud is a phenomenon traditional enterprises have been slow to adopt and IBM has made several attempts at providing an IBM cloud for these customers. “IBM appeals to its existing customers who have a strong preference to purchase most of their technology from IBM,” Gartner noted in its magic quadrant for cloud infrastructure. From a cloud infrastructure perspective, Gartner sees the IBM cloud as an option for “Mode 1” IT – which comprises mainly of systems of record type workloads.
The Red Hat acquisition represents a $34bn gamble: will those businesses that have stuck with IBM remain bedded to a traditional approach to IT, or will they eventually shift the majority of their enterprise workloads onto the public cloud? If they chose the latter, AWS or Azure and Google – rated as leaders by Gartner – may, arguably, offer more fully-formed public cloud strategies. But, for IBM, there is a $350bn opportunity – so long as it can convince these organisations that it is the safest pair of hands to make them cloud-ready.