IBM cloud revenues rose 80 percent in Q4 2012. But how does that compare against Amazon, Google, Microsoft, HP, Dell and Oracle? Here are some estimates and educated guesses.
IBM's (NYSE: IBM) cloud revenues jumped 80 percent during the technology company's Q4 2012. But what exactly does that figure mean, and how is IBM performing against cloud giants like Amazon (NASDAQ: AMZN) and entrenched rivals like HP, Microsoft and Oracle? The answers are difficult to find but here are some educated clues for channel partners that are considering public and private cloud engagements with IBM.
During IBM's earnings call on Jan. 22, 2013, Senior VP and CFO Mark Loughridge (pictured) said:
"Our SmartCloud portfolio addresses the full scope of enterprise client requirements. We have seen continued strong demand for our foundational offerings in hardware and software that help companies build and run their private clouds, as well as for cloud-based solutions like our SaaS offerings. With strong global growth, our cloud revenue for the year was up 80%. In 2012, we launched our family of PureSystems expert integrated systems as well as our SmartCloud Enterprise Plus public and managed private cloud offerings for large enterprises. These offerings further extend our cloud capabilities."
Still, IBM did not disclose the following information about its cloud revenues:
- How much of it involves one-time hardware, software and consulting engagements to customers that are building private clouds?
- How much of it involves SaaS and IaaS services that generate recurring revenues?
- Overall, what's the strategy for SmartCloud Docs, the new rival to Google Apps and Microsoft Office 365?
Dig a little deeper and I suspect a lot of the cloud revenue growth involves IBM's software business. Later in the earnings call, Loughridge said:
"If you look at the business mix with those [Smarter Planet, Cloud computing], about 50 percent of the revenue mix within those initiatives is software. So, a much higher software mix than we see in the base business. That too should help propel our mix into higher margin content."
Cloud Rivals and Revenue
While the cloud market continues to grow it's difficult to pinpoint exactly how much revenues big vendors are generating in the cloud.
A market research firm suggests Google's cloud business will triple to nearly $1 billion in 2013. Oracle President Mark Hurd said the company already has a $1 billion recurring revenue cloud business. Microsoft Channel Chief Jon Roskill has suggested his company already is the world's largest supplier of cloud software. And Dell and HP are busy building their respective public clouds at the moment.
Once cloud revenues become more substantial, I suspect many technology companies will begin to break out specific results for their SaaS, PaaS and IaaS pursuits. In the meantime, solid numbers are hard to come by.
Meanwhile, IBM's cloud evangelists are busy briefing channel partners. One example: Annette Miller, a worldwide cloud development executive, recently spoke that Tech Data's (NASDAQ: TECD) TDCloud conference near Tampa, Fla. Miller described how the SmartCloud strategy would empower partners -- whether they want to launch private or public cloud services.
Key to that strategy: IBM is building cloud relationships with four major distributors in the U.S. -- Arrow, Avnet, Ingram Micro and Tech Data. Stay tuned for more details on those moves.