Australia to get IBM public cloud in Q4


news Global IT giant IBM today confirmed plans to deploy its enterprise-class public cloud computing infrastructure in Australia, in a move which will give large organisations and government departments with data sovereignty concerns another option for utilising public cloud facilities based in Australia, as opposed to offshore.

IBM has a long history of offering cloud computing services and offers a multi-faceted cloud computing service offering to clients. Certain aspects of its software suites, for example, such as its Lotus Notes/Domino platform, can be purchased as a software as a service offering, and the company is also one of the largest providers of private cloud solutions in Australia — counting names such as the Australian Open on its local roster.

However, although the company has for several years operated dedicated cloud computing facilities around the globe, including public cloud offerings with shared infrastructure, the company has until now been reluctant to deploy its own infrastructure in Australia. This isn’t unusual; other public cloud providers such as Amazon and Microsoft have also been reluctant to deploy such datacentres environments in Australia.

However, an IBM spokesperson today confirmed to Delimiter that the company would in the fourth calendar quarter of this year make what it termed a ‘SmartCloud’ point of deployment available to local customers. This story was first reported by, which has today published extensive details of IBM’s planned Australian deployment.

‘SmartCloud’ is a concept launched by IBM in April 2011. At the time, the company said in a media release that the technology would constitute a “next-generation, enterprise cloud service delivery platform” which would allow clients to select “key characteristics of a public, private and hybrid cloud to match workload requirements from simple Web infrastructure to complex business processes”. SmartCloud comes in two implementation options — Enterprise and Enterprise+. It appears when the service was launched in 2011 that the Enterprise version expands on IBM’s testing and development cloud facilities — allowing, for example, the rapid provisioning of new development environments.

In comparison, IBM said its Enterprise+ model — also coming to Australia — “will complement and expand on the value of Enterprise, offering brand new capabilities provide a core set of multi-tenant services to manage virtual server, storage, network and security infrastructure components including managed operational production services”. You can find further information on IBM’s SmartCloud offerings onlineincluding a complex document detailing the platform’s charges (PDF).

I find IBM’s deployment of its own public cloud computing infrastructure in Australia to be fascinating.

Right now, companies ranging from the big telcos (Telstra and Optus) to the traditional IT services firms like Fujitsu, CSC and HP are hustling as hard as possible to get a piece of the cloud computing pie, as major Australian organisations start to enter the paradigm shift of migrating many of their IT infrastructure assets into the cloud.

Up until now, I’ve believed that companies like Telstra and Fujitsu were broadly out in front of the pack in this area, based purely on the numbers of customers which they have publicly disclosed, as well as the maturity of the platforms which they have demonstrated to me. However, IBM is a huge factor in this equation which can’t be taken for underestimated. And I think the deployment of its own cloud computing infrastructure in Australia has the potential to shift the goalposts in the growing cloud computing market substantially.

Firstly, when it comes to IT services, IBM is really the king of the market in Australia; a much larger beast than its rivals. Big Blue is where everyone — be it Westpac, NAB, the Department of Immigration and Citizenship or even Telstra — turns first when they need a big parcel of IT services. IBM is involved or just lost out on every major IT services deal signed in Australia in one form or another.

With the deployment of SmartCloud in Australia, IBM has given all of those organisations, many of whom would have been tempted by, for example, the mature cloud computing offerings of Telstra and Fujitsu, yet another reason to turn back to IBM and extend the amount of services they are buying from the company. And IBM really does get corporate IT services. Where a big government client would be nervous in putting data into the public cloud facilities operated by Amazon or Microsoft, with IBM they wouldn’t really hesitate. The minute chief executives or even chief financial officers hear the word “IBM” in any situation, they associate that word with safety and security. When they hear “cloud computing” and “Amazon”, they think about risk and the loss of data sovereignty.

To illustrate this situation, think about a bank like Westpac.

Westpac already has a major existing, multi-year IT outsourcing relationship with IBM. Despite Westpac’s occasional protestations to the contrary and attempts to get more independence, the pair are virtually chained together at the wrist. And Westpac also has extensive internal private cloud infrastructure based on technology from the VCE consortium, which IBM no doubt helped it build.

With IBM deploying its own on-shore public cloud infrastructure, it will make perfect sense for Westpac to begin offloading some workloads from its own private cloud into IBM’s own cloud. These won’t be the sensitive workloads, but there’s no reason not to do this with test & dev, which is, after all, the first thing which always goes into the cloud these days. And over time, as that situation gets more familiar at the bank, you can see Westpac offloading more and more onto IBM’s infrastructure. As time goes by, I’m sure we’ll see more and more of this kind of behaviour with major Australian organisations and IBM. The case is so strong, it almost writes itself — even in government departments.

For comparison’s sake, now try writing the business case for Westpac to offload data to Amazon Web Services. See the difference?

Now, many feel that IBM is a bit stodgy and slow to innovate at times, and of course there are more nimble, smaller players in the cloud computing market. In addition. I’m not saying IBM’s rivals don’t already have strong cases; Telstra does make a strong case for organisations to integrate their telco infrastructure with their cloud hosting in its datacentre; as I’ve previously mentioned, Fujitsu already has a mature capability, and CSC obviously has Australia’s resources sector stitched up tighter than an OpenBSD install in the FBI.

But all of these players would be wise not to underestimate IBM when it comes to cloud computing. Big Blue has the sheer scale to make its Australia cloud infrastructure work; and it will be fascinating to see what it can do if it really applies its massive bulk in this area.

Image credit: Patrick H, Creative Commons


  1. Unless IBM gets some legally separate entity to run their AU cloud they will still be affected by the Patriot Act. And so will their customers…

    The test I give the vendors is can you assure me that when the FBI or Secret Service show up in your office in the USA and lean on your CEO you won’t have to legally give them access to our data. Usually they say yes it is safe. But they never provide that in writing from their legal counsel… Odd that!

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