IBM and AT&T Planning Enterprise Cloud Service for 2013

Service will combine compute and storage infrastructure, new VPN technology.

IBM and AT&T will be uniting to offer their shared customers cloud services that use Big Blue’s compute and storage infrastructure and the telecom giant’s network connectivity. The firms will jointly sell the offering to their respective enterprise customers (those in the Fortune 1000) as an alternative to traditional infrastructure as a service (IaaS) cloud services; such IaaS providers often use only standard Internet connections.

With release expected early in 2013, the service will use IBM’s SmartCloud Enterprise+, the company’s public IaaS-based cloud service and new virtual private network (VPN) technology developed by AT&T Labs. The new VPN ensures secure connections and more reliable performance than do Internet connections alone, according to Dennis Quan, vice president of IBM’s Smart Cloud infrastructure, and will provide improved control over security, privacy, and performance.

The so-called “breakthrough” new VPN capability will come at a price, though the companies aren’t saying how much that premium will be. Furthermore, although both companies are members of the OpenStack effort, it is unclear when (or even if) this service will support the OpenStack networking protocols. Quan would only say that IBM is “deeply committed” to OpenStack.

The VPN technology automatically allocates network services to compute infrastructure; such automation lets customers scale resources on demand faster than if handled manually, according to the two providers, which also will offer service-level agreements, more than 70 security functions, and “high levels” of security embedded on both wired and wireless devices authenticated to a customer’s VPN.

Although the two giants compete to some extent, both stand to benefit from working together. AT&T can provide direct links from private cloud and premises-based data centers to IBM SmartCloud Enterprise+ filling a gap in Big Blue’s portfolio; AT&T gains another option to deliver IaaS, even if the service is not AT&T’s.

It is not clear how big AT&T’s enterprise public cloud service is, but IBM’s is presumably bigger. The company said it expects its cloud revenue to hit $7 billion by the year 2015. The company hasn’t disclosed its cloud revenues to date, but IBM said it doubled last year over 2010.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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