IBM seeds clouds on global profit drought

Once you get into the complexity of a cloud, questions like whether you're running Linux or Windows, open or closed source go away. You're buying cloud services and for IBM the money just pours down.

IBM's strategy for both growing and squaring the circle of open source profit comes down to a single word.

Clouds.

Dennis Quan, whose title is director of autonomic computing, made this clear in a ZDNet interview as IBM announced the completion of IBM Blue Clouds in Qatar, Japan and South Africa, which will be used by six universities.

Taken together the clouds demonstrate that IBM has multiple business models for cloud formation.

  • The Qatar cloud is build-to-suit, for three area universities who will do data mining, environmental work and business analysis.
  • The South African cloud will be managed by IBM, again on behalf of university clients.
  • The Japan cloud will be aimed at cloud education, building high-level cloud expertise for use in building the market.

Quan called clouds an "ongoing evolution" of trends in Web hosting, grid computing, virtualization and distributed computing over 20 years, but the result poses some very complex system management and scalability challenges.

IBM likes complex things. In complexity there is profit.

Clouds are about offering massively scalable facilities over the network. All the aspects of the cloud service lifecycle – sign-up, SLAs, utilization, metering and billing, termination and rescheduling – all those are part of the service management story we have at IBM about managing clouds and the services they get from clouds.

What's important is that there isn't just one cloud. There will be many clouds built under many arrangements, public and private, some of them heavy on back-end processing, others heavy in user-facing applications.

Once you get into the complexity of a cloud, questions like whether you're running Linux or Windows, open or closed source go away. You're buying cloud services and for IBM the money just pours down.

IBM in Second Life

IBM in Second Life

Some more details on the specific deals:

  • The Qatar Cloud Computing Initiative is being done for  Carnegie Mellon University in Qatar, Qatar University, and Texas A&M University at Qatar. It will be housed at the first school. Most of its work will be for data-intensive oil exploration applications for local industries, but they are also building an Arabic-language search engine.
  • The Higher Education Alliance for Leadership Through Health (HEALTH) Alliance is using the African cloud, which will be located at the University of Pretoria in South Africa. Locally it will be used on medical research, regionally to build a "virtual university" accessed remotely.
  • Kyushu University in Fukuoda will house the Japanese cloud, mainly for a course called Societal Information System Engineering that teaches ethics as well as development and business skills. Think of it as a Ph.D program combining computing and management.

Much of this is aimed at building a virtuous cycle. You train the very best engineers on IBM clouds and you make money both building and renting them. Knowledge and expertise become the product worth paying for. And it is worth paying for, worth paying big for.

But also notice how many borders are crossed in these deals. Not just borders on source, but borders between public and private, selling and renting, distributed grids and SaaS.

IBM's hope is that the complexity of the necessary work, and the connections it builds with both business and political leadership worldwide, will help shield its profitability from the economic storm.

That may be a good bet.

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