More on IBM’s Cloud Play

November 24, 2008

Larry Dignan’s article “IBM Launches Cloud Computing Services” provides more color for what I perceived as a gray and wispy initiative. You can read his story for ZDNet here. He also provides a link to other ZDNet articles about IBM’s new initiative to regain territory ceded to Salesforce.com and other early entrants in the cloud computing space. For me, the most interesting comment in his article was:

Of IBM’s services, its security efforts may be the most interesting. IBM said it has cooked up a company wide project to create a security architecture for cloud computing environments. The project pulls together IBM’s research and security arms with the rest of the business. The idea is that enterprises provide and get cloud services with security at least as good as what they get in traditional computing environments.

When I read this passage, I thought of Oracle’s attempt to sell enterprise search based on the Oracle security functions. I don’t think lead balloons flew too well when SES10g lifted off, and I don’t think security will work much better for IBM. Here’s my reasoning, and you can provide your facts about why I am wrong in the comments section to this Web log:

  1. IBM has not been able to stick with a network services business. The company dabbled in Internet services and dumped the business to AT&T where it ran aground a decade ago. Need to refresh your memory? Click here. Neither IBM nor AT&T have proven themselves able to do much more than stick with well worn grooves. If you have ever been to Pompeii, you will see the grooves that carts made in stone streets. Once these companies hit a groove, change becomes really difficult. I know about the elephants dancing stuff, but I think cloud computing is not likely to be the winner for IBM that IBM hopes it will be.
  2. Success in the cloud requires capital investment. I don’t think that most companies appreciate the cost of the moving applications to “out there” on the Internet. Microsoft’s massive investments, if they are really made and supported, could sink the $65 billion in revenue giant into a sea of debt. Building plumbing is one thing. The real cost comes from upgrading and enhancing the infrastructure. IBM has not demonstrated that it can pull off this type of operational plan. The company has shifted its chip business because of the cost issue. I don’t think the company will have the appetite for infrastructure because it tried that meal once before and exited the business.
  3. The technology challenges for cloud computing are significant. Security is one modest component, but there are larger, far more troublesome thorns to pick out of IBM’s blue sweater. For example, the need to create multi tenant operations that deliver satisfactory performance and stability. Also, the challenge of engineering around the bottlenecks that old software like IBM DB2 throws into the face of licensees with far less demanding data tasks. In short, IBM has legions of engineers, but moving IBM inventions from the lab and making money from them is not an assembly line process. IBM is primarily a consulting firm, and its operational competencies continue to raise questions in my mind.

You may have greater confidence in Big Blue than I do. That’s fine. I don’t plan on shifting my company’s future to IBM’s cloud. In fact, I don’t think IBM realizes that its pal Google is going to be a big player in cloud services, which calls into question how Google and IBM will interact in this important new computing environment. My hunch is that the GOOG will dine on some IBM body parts. IBM’s elephant may be too big to notice that its tail was gobbled by Googzilla. An elephant can dance, but I sure hope it can fight too, not just trumpet.

Stephen Arnold, November 24, 2008

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