IBM Is Finally Embracing the Cloud—It Has No Other Choice
Startup founder Alex Polvi has a name for the biggest idea in the world of information technology. And, yes, it doubles as a hashtag, a six-character encapsulation of this sweeping movement: #GIFEE.
The acronym has nothing to do with time-wasting animations in your Slack feed. It stands for “Google Infrastructure For Everyone Else!” (exclamation point optional). Nowadays, in the world of IT, the big idea is to give everyone else their own incarnation of the state-of-the-art infrastructure Google built to run its Internet empire. And that’s good news for everyone else. Or, rather, almost everyone else.
This big idea presents a conundrum for venerable tech giants like HP and Microsoft and IBM. For so long, these giants sold a very different type of IT infrastructure, and it keep their profit margins high. The #GIFEE movement undercuts the old way of doing things. But in recent years, Microsoft has regained some of its mojo by embracing the #GIFEE ideal—and embracing it wholeheartedly (though I’m sure they call it something else). And now, it looks like IBM has made the same leap of faith. Google—and, just as importantly, Amazon—left the company no choice.
Google for Everyone Else
This movement started more than a decade ago. As it built the world’s largest Internet empire, Google created an entirely new way of erecting and operating online services. It created a new breed of software that could juggle tasks across dozens, hundreds, even thousands of machines—software that includes everything from data-crunching tools like MapReduce to a contraption called Borg that could run code atop the company’s global network of computers with exceptional efficiency. This was the only way to serve so many people with so many online services so quickly.
It soon forced Facebook and Yahoo and other web giants down the same path. Now, people like Alex Polvi want to bring this new breed of infrastructure to everyone else. In other words: to any business trying to build online services. Polvi is the founder and CEO of CoreOS, a a Palo Alto startup that offers all sorts of software that mimics The Google Way. Yesterday, it officially rolled out a tool that helps businesses mimic the Borg idea.
CoreOS is just one of many startups pushing in the same direction, from MemSQL and MongoDB to Docker and Mesosphere. Amazon is offering similar tools through its enormously popular cloud computing services. And Google itself is now part of the movement, literally offering Google infrastructure to everyone else via its own cloud services.
In the big-money world of IT—information technology that drives the big businesses—#GIFFE is the future. And that’s a problem for traditional IT sellers like Microsoft and IBM and Oracle and HP and EMC, which have traditionally sold a very different kind of tech, tech designed to run on individual machines, not across thousands. Running it on thousands of machines is too difficult and too expensive. But there’s a Catch-22 here: If the Oracles stick with this tech, they’ll slowly fade away. But if they embrace the new way, they’ll cannibalize their existing businesses.
Microsoft faced this problem exactly as it should have: It embraced the new way long ago, competing with Google and Amazon via its Microsoft Azure cloud computing services and getting behind projects like Docker. But other IT giants, such as HP, have floundered. It’s a difficult situation, and their fate is still very much in question.
Miles to Go
Many of the same questions hang over IBM. But it seems that, like Microsoft, the company has at least moved forward. The latest sign arrived this week. Yesterday, as CoreOS rolled out its new container software, IBM unveiled 25 new services that aim to compete head-on with the new breed of cloud computing. After years of painting its old-school IT as something that could compete with the Amazons and the Googles and Microsofts and the upstarts, it’s changing in notable ways. “One thing we are good at as a company is recognizing, and instigating, shifts in technology,” says Angel Diaz, who oversees IBM’s cloud operation.
It has done this, in large part, through acquisitions. It bought a company called SoftLayer, which can compete with Amazon and other cloud outfit, and acquired Cloudant, which specializes in juggling vast amounts of data. Former Cloudant chief technology officer Adam Kocoloski oversees those 25 new services, which are based on Cloudant tech as well as notable open source tools such as Spark. “This is pretty significant,” industry analyst Nik Rouda says of the new roll-out. “It shows them executing on the good raw material they had.”
Meanwhile, using an open source Google-esque creation called Cloud Foundry, the company has built another notable cloud service called BlueMix, and according to Diaz, it attracts 15,000 new (and active) users each month. It should be said, however, that some of those users are paying for the service and some aren’t.
The good news is that there is still an enormous opportunity in this market. Research firm Forrester predicts that, by 2020, cloud computing will span over $191 billion in sales. For a company like IBM, there is still ample runway to find success. And IBM is at least pointing in the right direction. Like everyone else, it realizes things have changed.