IBM announced several big moves today including their acquisition of Cloudant, increased investment in the cloud and a new partnership with Governor Cuomo on a state-run IT center. After seven consecutive quarters of declining revenue and IBM stock dipping nine percent over the past year, major changes to their current business model come as no surprise.
Why Would IBM Move to the Cloud?
For IBM, moving away from costly on-premise hardware and software installations to invest in the cloud means a more self-service computing environment to host its second-largest revenue-generator: software. According to Quentin Hardy of the New York Times, not only does software bring in $25.9 billion of the company's $99.8 billion in 2013 revenue, but it also draws most of the company's services business. IBM's acquisition of Cloudant serves the same purpose, offering database-as-a-service, and consolidates their long-standing relationship.
For IT professionals, this narrative is familiar. Cloud solutions are continually applauded for their ability to give companies a competitive edge by allowing for leaner, more agile business models. Moving to the cloud means companies can shift resources away from costly or unnecessary infrastructure installations and re-focus them on the company's main business offerings.
The Shift Away from 'HUMAN'
The new storyline popping up in today's announcement is the potential for cloud solutions to replace human capital. Some of the most fervent cloud devotees are small to medium-sized start-ups and their business models don't have clunky on-premise solutions to cut out of the equation. As larger, more established enterprises like IBM re-purpose resources to the cloud, the shift could create a wave in the market, a wave with layoffs in its wake.
How to Protect the Enterprise.
Regardless of the effects, migration to the cloud is ramping up and tools like Bitium help you make the transition by offering essential tools like password management, single sign-on and direct integrations between various apps. Find out how Bitium unlocks the cloud.