Last month, IBM announced that its cloud (opens in new tab) revenue topped £22 billion in 2020, up 20% from the previous year and accounting for 37% of IBM’s total revenue. Agnieszka Bruyere, VP Public Cloud EMEA at IBM, discusses the reasons behind the company's cloud momentum and why it's betting on hybrid cloud.
What has driven IBM’s growth in the cloud market at the same time as overall revenues have dropped?
The pandemic forced businesses to shift vast amount of data (opens in new tab) and workloads into the cloud to adapt to remote operations in 2020. During this period, companies started to understand the benefits of hybrid cloud strategies in facilitating their transformation journeys.
IBM has made big, bold bets on the hybrid cloud market over recent years, acquiring Red Hat for £25 billion in 2019 and working with them to offer the only true open, hybrid cloud platform built on open-source technologies such as Linux (opens in new tab) and Kubernetes (opens in new tab). This allows enterprise clients to securely deploy, run and manage data and applications across on-premise, private and public cloud environments.
We have also made strategic acquisitions to bolster IBM’s hybrid cloud capabilities and cloud services expertise, including Nordcloud, a privately held European leader in cloud consulting services.
This helped us become a leading provider of open hybrid cloud data and artificial intelligence (opens in new tab) solutions and we were able to capitalize on the increased demand for digital transformation when the pandemic started. We subsequently announced a range of new clients throughout the year, including BNP Paribas, Daimler, Coca Cola European Partners, and Telefonica.
Why do you think businesses are moving towards hybrid cloud solutions?
The measures taken by businesses in response to the pandemic has highlighted the importance of interoperability, portability and reversibility in cloud infrastructures.
As companies rapidly shifted operations and business models to adapt to new ways of working, many faced the challenge of managing data and applications across anything from six to 15 cloud platforms.
It has resulted in widespread interest in hybrid cloud strategies, where businesses can leverage multiple vendors and seamlessly move data and applications to adapt to industry, regulatory, geographic and customer challenges whenever they need to.
We expect demand for hybrid cloud to intensify in 2021 as companies accelerate digital transformation initiatives and begin to migrate mission critical workloads. We work with our clients to modernize their technologies, improve efficiency, bridge varied cloud environments and ensure mission critical workloads are integrated with security (opens in new tab) and resiliency.
How do cloud platform requirements differ for different sectors?
Every cloud journey is unique, with organizations facing challenges based on an array of different factors including industry, regulation, geography, size, operating model and customers. This is why enterprises need a cloud solution designed to the specific needs of their industry.
When it comes to highly regulated industries like financial services, healthcare, insurance and telecoms, there are also unique regulatory, compliance, security and data protection requirements to consider.
IBM has been addressing such needs. Together with Bank of America, we launched the world’s first public cloud for the financial services industry in 2019, with a growing ecosystem of financial institutions and technology providers including the likes of BNP Paribas and Luminor Bank in Europe. And in November, we announced IBM Cloud for Telecommunications with over 35 partners including Samsung, Nokia and Cisco.
We are making good headway in our focus on industry clouds, leveraging over 100 years of enterprise expertise to provide solutions that will facilitate digital transformation initiatives in the years ahead.
Is the shift to cloud creating new opportunities for cyber criminals?
With the pandemic accelerating digital transformation initiatives, businesses are increasingly having to shift mission critical data and workloads into the cloud.
As a result, cloud-based cyber-attacks rose 630% between January and April 2020 (McAfee), and CIOs and CSO – particularly those in sensitive, high regulated industries – are under pressure to help ensure data privacy (opens in new tab) for their consumers.
Businesses need to have full autonomy over their workloads in a cloud environment to enable successful transformations but also be supported by the most innovative and comprehensive security tools. That’s why IBM has invested so heavily in security and compliance, including Confidential Computing, to offer cloud security that is second to none.
How are cloud providers securing their cloud platforms?
With businesses shifting to the cloud, and increasingly finding themselves stewards of sensitive data – from bank account numbers to healthcare information – many are seeking new, more advanced solutions for keeping data private. One such innovation is Confidential Computing.
Confidential Computing is a cloud computing (opens in new tab) technology that isolates sensitive data into a secure enclave during processing. In a standard cloud configuration, data is decrypted for processing, leaving it potentially vulnerable. With Confidential Computing, data is essentially hidden in a secured area using embedded encryption keys, ensuring that it cannot be seen by anyone – not even the cloud provider.
IBM became the first cloud provider to offer confidential computing for use in production during 2018. In addition, we developed the IBM Cloud Security & Compliance Center – built directly into the IBM Cloud platform to make it easier to manage and monitor security and compliance related activities.
What can we expect from IBM in the hybrid cloud market in 2021?
IBM will continue to invest heavily in the areas where we see clients focusing their efforts – open innovation, security and high-value services delivered via the cloud.
AI and open-source tools will also simplify migration and the use of hybrid cloud platforms, while the confluence of emerging technologies such as 5G (opens in new tab), edge, AI and quantum will increase demand for custom clouds.
With these emerging technologies, we’ll also see businesses start to consider the opportunities of ‘distributed cloud’ which enables them to leverage their local investment in their infrastructure whilst enabling them to deploy cloud services where data resides. This will give businesses access to real time data analytics (opens in new tab) and AI whilst keeping their full control.
As a result, we fully expect the hybrid cloud market to continue its exponential growth over the course of the year. As a company, we will continue to invest significantly in our hybrid cloud offerings to help our customers tackle the challenges of their industries. We have already announced projects with the likes of Telefonica, Luminor Bank and DIA across Europe this year and are excited to work with many more partners.
- Agnieszka Bruyere, is VP of Public Cloud EMEA at IBM (opens in new tab).
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