IBM Spending Big On Cloud Computing In 2014 (NYSE:IBM)

ibmIBM has announced plans to spend heavily on cloud computing during the coming year. To increase the number and quality of computing centers it has worldwide, IBM is moving rapidly on its plans to spend $1.2 billion this year on its efforts. IBM plans to offer over 150 software and software development products in its cloud. Erich Clementi, senior vice president of IBM Global Technology Services, said, “This is a key growth area for IBM. We are building out a global footprint.”

IBM’s chief executive, Virginia Rometty, announced that Watson, an advanced cognitive computing framework, will be among the new products offered. The company’s new Watson division will have 2,500 employees. The company will also continue to sell raw computing and data storage capabilities. Mr. Clementi said, “This is a series of investments that started years ago. Under Gini, we’re doubling down.”

The business of renting a lot of computing power via the Internet is quickly replacing the conventional business of selling computer servers, mainframe computers, and associated hardware and software. Cloud computing is often preferable because of its lower costs and faster deployment. IBM’s cloud provider competitors have been growing rapidly, Amazon Web Services in particular, but also Google and Microsoft. Each of these competitors have said they will spend at least $1 billion annually on cloud computing for the foreseeable future.

IBM bought Softlayer, a cloud company with 13 data centers, last year for $2 billion. This brings IBM’s total number of data centers to 25 when added to the 13 that IBM already has in the United States and overseas. The smallest of these data centers contains over 16,000 servers. The company plans to have 40 data centers in 13 countries across five continents by the end of 2014. IBM also has announced plans to build two facilities in the United States specifically designed to handle government workloads and add computing centers in mainland China and the Middle East.



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