IBM Expands Hybrid Cloud Service, Targeting Banks, Health Care

Brody Ford (Bloomberg) -- International Business Machines Corp. has publicly released its hybrid cloud service, furthering its plan to pivot the business toward the fast-growing market for storing large amounts of data on the internet.

The expanded offering, called IBM Cloud Satellite, allows customers to control how they store their information, with some of it held internally in what’s known as private cloud, and other data stored in public clouds such as Amazon.com Inc’s AWS, or Microsoft Corp’s Azure. As a latecomer to cloud services, IBM is targeting highly-regulated industries such as banking and health care, which have been slow to adopt internet-based storage solutions due to security concerns and scale.

For these industries, the integration of public and private clouds has been “too complex, too expensive, and a huge amount of risk,” said Howard Boville, head of hybrid cloud at IBM. To accommodate such clients, Cloud Satellite is designed to streamline cybersecurity, and make regulatory compliance “invisible,” Boville said.

IBM sees the evolution as a crucial step in Chief Executive Officer Arvind Krishna’s vision to transform the century-old company into a modern enterprise focused on hybrid cloud and artificial intelligence. IBM has collaborated with 65 companies, including Dell, Intel Corp., and Cisco Systems Inc., to help customers run workloads and to provide input on Cloud Satellite’s development.

Lumen Technologies, previously known as CenturyLink, will be a Cloud Satellite partner, and deploy the service at 180,000 enterprise locations. The ability to offer the Cloud Satellite service to companies where the data now lives, will help offer reassurance to businesses whose data is highly sensitive and who have been hesitant to move it to a public storage site, according to IBM.

“Only 20% of enterprise data is in the cloud today, we have an opportunity to help migrate 80% of mission-critical workloads to the cloud,” IBM said in a statement Monday.

Since becoming CEO last spring, Krishna has moved quickly to implement the transformation plan for IBM. During an investor call in January, Krishna said that he was confident the company’s focus on those areas can help it achieve revenue growth in 2021, reversing a ten-quarter trend of no growth or declines in sales.

Krishna, who previously headed IBM’s cloud division, was the driving force behind the company’s $34 billion purchase of open source software provider Red Hat in 2018, the first step toward transitioning IBM into what it sees as a $1 trillion hybrid-cloud market. The company is also expected to complete a spin off of its managed infrastructure services unit into a separate publicly traded company this year.