IBM expects to generate $7 billion in cloud computing revenues by 2015: CEO
That some of the big IT players are expecting big bucks from cloud computing is nothing new; what’s new is Big Blue IBM’s amazing optimism on the future of the market in general and its fortunes in particular. On 8 March 2011, IBM CEO Sam Palmisano said that he expected the company to generate $7 billion in cloud computing revenues by 2015. He was speaking at IBM’s annual investor meeting.
Palmisano remarked that cloud computing “is the next technical shift in the enterprise” and that it “represents about $7 billion of opportunity” for the company. IBM recognized the opportunity in the field quite early, with its Blue Cloud strategy being launched in 2007. With its portfolio of servers, software and services, all required in cloud computing, IBM is not wrong in expecting a windfall from the technology.
However, are its expectations a bit too optimistic? According to a report published by market research firm In-Stat, by 2014, businesses in the United States will spend more than $13 billion on cloud computing and managed hosting services. Even if that spend is doubled considering the international market, the market will be around $30 billion by 2015, and IBM is expecting a market share of 25%.
With established players like Amazon, Google and Salesforce.com, IBM may not find the going too easy. Swiss investment bank UBS has predicted that Amazon Web Services will notch up $2.5 billion in 2014. Salesforce.com is the first cloud computing superstar with its rise in prominence fully predicated on its cloud-based offerings. Google with its Google Apps is the company that brought cloud computing to the masses.
As can be seen, there are several claimants to the cloud computing pie, some with as much intellectual and financial capital as IBM, few with a head start in this emergent field. Therefore, getting one-fourth of the pie for itself may not be as easy, unless the market grows substantially.
At the same time, IBM is a company that has endured for 100 years and for several decades, has filed the maximum number of patents in the world. $7 billion by 2015 may be difficult, but not impossible for Big Blue.
By Sourya Biswas