IBM has been systematically reducing its dependence on hardware business and increasing its focus on cloud computing services. Its cloud solutions address the full scope of client requirements including private clouds, public clouds and hybrid clouds, as well as PaaS- and SaaS-based solutions (i.e., platform- and software-as-a-service). The company has been promoting its cloud services amongst its existing client base. This strategy seems to be reaping benefits as the company has signed multiple billion dollar deals over the past month. In this note, we will explore the cloud market and the deals signed by IBM.
Cloud Service On The Rise
Over the past few years, cloud services have come to fore for both large and SME (small and medium size enterprise) companies that are looking to improve their businesses by outdourcing IT solutions and services. The advantage of cloud services is the scalability and accessibility to new applications, resources and services. Furthermore, the costs associated with using these services are less, as the onus of management of these services lie with the cloud services provider. As a result, the demand is growing for virtualization services, which enable service provider to create virtual computer domain independent of the underlying software and hardware, so as to increase manageability and reduce cost. This has translated into a CAGR of 17.6% from 2014 to 2020 for the global cloud services market, and expected to reach a market size of $555 billion in 2020 from $209.9 billion in 2014, according to the new report by Allied Market Research.