IBM's Cloud Business: Ex-Employee Divulges Shortfalls
Confidential IBM documents reveal the company's struggles to meet its cloud forecasts, as the SEC and Wall Street cast a skeptical eye.
IBM's cloud computing revenues are smaller and less "cloud-intensive" than customers and Wall Street analysts might think. That's the claim of a former IBM employee who backed up more than a few of his/her critical assessments of the vendor's cloud prowess with a number of confidential internal documents shared with InformationWeek.
The documents put IBM's 2012 cloud-related revenue at $2.26 billion, a figure the company has declined to disclose publicly. In 2011, IBM did issue a roadmap that set forth the goal of reaching $7 billion in annual cloud revenue by 2015, so the much lower figure raises doubts about whether the company is on track.
IBM also said in 2011 that only $3 billion of that total would come from net-new business, suggesting that $4 billion would be tied to cloud-based ways of delivering its current hardware, software and services.
Noteworthy is data that shows that roughly half of current IBM cloud revenues are tied to hardware, in many cases systems used to run customers' private clouds or partner clouds. "This is not what your readers would think of as cloud," said the former IBM employee, who reached out to InformationWeek after reading a column I wrote challenging IBM to be more transparent about its cloud revenue. "They will think of Amazon EC2, Salesforce.com and IBM SmartCloud as real cloud. Not stuff sitting on their data center floor."... Read full story on InformationWeek
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