As IBM prepares to release fourth-quarter and full-year earnings this afternoon, the company is building significant hybrid-cloud momentum for 2019 with two large and sweeping customer deals totaling $875 million over the next several years.
The huge engagements with Vodafone for $550 million and Juniper for $325 million showcase IBM’s broad and deep strengths in two of the hottest areas in the enterprise cloud today: hybrid cloud and multicloud. While IBM’s cloud business is structured differently than most of its competitors in the Cloud Wars Top 10, #5 IBM continues to carve a high-value spot for itself by fully leveraging its strengths across the traditional IT world of on-premises technology and the modern realm of the cloud.
In addition, its vast capabilities in software, integration and cybersecurity position it as a major player in the multicloud game, where business customers are looking for expert help in making all their different clouds work together simply, elegantly and securely.
Vodafone
IBM and its longtime customer and business partner are taking their relationship to a more-intimate and strategic level by creating a new venture aimed at blending their respective digital capabilities to provide mutual and new customers with the types of modern technology services and industry knowledge necessary in the unfolding world of digital business.
“With more than 70 percent of organizations today using up to 15 cloud environments as they strive to access powerful new digital solutions and services, the interconnectivity of clouds and the vulnerability of data have become global issues,” IBM said in a press release. “Together, IBM and Vodafone Business will help companies remove the complexity and barriers from their technology choices and ensure that data and applications flow freely and securely across their organizations.”
An IDC analyst was bullish on the deal.
“To deliver multi-cloud strategies in the real world, enterprises need to invest at many levels, ranging from cloud connectivity to cloud governance and management,” said IDC’s Carla Arend, Senior Program Director for European Software in the press release. “This new venture between Vodafone and IBM addresses the ‘full stack’ of real-world multi-cloud concerns with a powerful combination of capabilities that should enable customers to deliver multi-cloud strategies in all layers of their organizations.”
With IDC predicting the global cloud market for hardware, software and services will reach $420 billion in 2019, “the combined market opportunity here is huge,” said Arend in the release.
Indeed, the new venture should open up significant new revenue opportunities for IBM as Vodafone Business customers will gain access to IBM’s complete portfolio of cloud offerings and vertical-market expertise.
For Vodafone, the new venture will also create additional external business opportunities, while internally IBM’s extensive cloud capabilities will help Vodafone operate more efficiently and with more insight, said CEO Nick Read.
“Vodafone has successfully established its cloud business to help our customers succeed in a digital world,” Read said in the press release. “This strategic venture with IBM allows us to focus on our strengths in fixed and mobile technologies, whilst leveraging IBM’s expertise in multicloud, AI and services. Through this new venture we’ll accelerate our growth and deepen engagement with our customers while driving radical simplification and efficiency in our business.”
Juniper
The networking company has picked IBM to help it optimize its mix of traditional and cloud technologies to achieve better business outcomes and deliver maximum flexibility in today’s fast-changing world.
Juniper CIO Bob Worrall said in a press release that the deal is a “key element of our digital transformation,” particularly in how it will allow Juniper and IBM to collaborate to create “innovative solutions for our cloud-first business model.”
That will include deploying IBM’s cognitive technologies, including Factory Development for application management, to ultimately create a cloud-native environment at Juniper.
IBM’s Martin Jetter, senior vice-president of Global Technology Services, said in the release the company has learned that “a ‘one-cloud-fits-all’ approach doesn’t work,” and that clients are accordingly choosing and integrating multiple clouds in a way that aligns with their business needs.
For Juniper, Jetter said, IBM is “integrating cloud solutions with their existing IT investments” to give Juniper “the opportunity to generate more value from existing infrastructure” as they simultaneously “manage strategic services that are critical to their business.”
While these two deals are squarely in IBM’s wheelhouse, very few of IBM’s competitors could deliver on all the requirements put forth by Vodafone and Juniper, and that’s exactly why IBM—in spite of its untraditional approach to the cloud—retains a solid hold on the #5 spot in the Cloud Wars Top 10 here at the outset of 2019.
Disclosure: At the time of this writing, IBM is a client of Evans Strategic Communications LLC.
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