IBM Funnels $400M to the Cloud

IBM (NYSE: IBM) has sharply increased its commitment to cloud computing by slotting US$400 million for new data centers in North Carolina and Tokyo. The bulk of the investment, $360 million, is earmarked for a center in Research Triangle Park, between Durham and Raleigh.

A new $40 million data center planned for Tokyo is the company's ninth cloud computing project worldwide. Altogether, IBM has invested $500 million and hired more than 200 researchers in its cloud computing initiatives over the last three years.

Other projects include Europe's first cloud computer center in Dublin, Ireland, launched in March, and centers in Johannesburg, South Africa, and Beijing, both of which opened in June.

Big Boost for Big Green

The project at Research Triangle Park is one of IBM's most ambitious efforts. Phase one calls for developing 60,000 square feet of data center floorspace, which can be expanded in modular increments. Innovations will include water cooling for some equipment and energy-saving measures under the company's Project Big Green initiative.

The North Carolina site, as well as a recently commissioned data center in Boulder, Colo., will also be among IBM's first so-called adaptive data centers -- essentially, operations in which the facility's equipment is capable of adjusting to the needs of the IT equipment in the data center.

IBM began focusing on cloud computing about 2 1/2 years ago, with the rollout of its Innovation Portal, Dennis Quan, director of development in IBM's autonomic computing division, told the E-Commerce Times. The effort has intensified through partnerships with Google (Nasdaq: GOOG) and academic organizations.

"Cloud computing is changing the way large applications and different kinds of development activities can be supported," Quan said. The concept will be central to the development of next-generation mobile and Web 2.0 applications, he predicted.

Industry Moves

IBM is not the only IT provider pouring resources into cloud computing. Last week Intel (Nasdaq: INTC), HP (NYSE: HPQ) and Yahoo (Nasdaq: YHOO) announced plans to develop a massive test bed for academics to use in cloud computing research. The project will utilize a hardware infrastructure supplied by HP and Intel, together with open source software systems including Hadoop from Apache; Pig, from Yahoo Reasearch; and Tashi, supported by Intel.

There's little question that supply, in the form of new data centers, will lag behind demand. Merrill Lynch (NYSE: MER) has estimated that the market for cloud computing may reach $160 billion by 2011. "Certainly, we are seeing a shift or migration here from a model where everyone provides their own computing capacity to something like a utility model where one provider services a lot of customers," Burton Group Vice President and Research Director Guy Creese told the E-Commerce Times.

"The idea behind the concept is to provide incredibly cheap computing power in ways that are useful to companies -- such as licensing and systems operations," he said. Academia is particularly interested in the model, not just because it's interesting to students but because it's cheap, Creese said.

The growing inclusion of universities will mean dividends for IT providers as well. Cloud computing is still an emerging discipline, Creese pointed out. He noted Amazon's (Nasdaq: AMZN) S3 service outage a few weeks back. "There is still a need for research to identify these problems before they occur," he said.