IBM has brushed aside its drop in public cloud market share rankings and insists its open hybrid approach, along with an enterprise legacy, places it well for a future where data and workload portability will be paramount.

The company dropped to fifth in public cloud market share this month, ceding a place to Chinese giant Alibaba. 

Asked about the threat of Alibaba to its cloud business, IBM’s APAC head of cloud, Jason Jameson downplayed the market share switch and attributed Alibaba’s growth largely to within China.

“Ali has plenty of market share in China,” Jameson told Which-50 today. “I think they have 36 data centres [in China] so a lot of their growth is coming out of mainland China. So [that’s] great for them.”

Source: Synergy Research.

Jameson said IBM’s decades of history with enterprise clients has built up a strong cache of trust and Big Blue is still renowned for its cloud security. He also pointed to IBM’s contribution to open source software, which was bolstered by its US$34 billion acquisition of Red Hat in 2018.

Vice President, Cloud Platform, Cognitive Solutions & SaaS, Asia Pacific at IBM. Image: LinkedIn.

“Those sorts of things plus the enterprise experience [and] the industry experience that we bring is really what would be a differentiator.”

IBM is betting on an “open” and “hybrid” future. This model is based on the idea that customers move data and workloads to whatever environment works best. Despite the public cloud hype and its incredible market growth, the reality is around 80 per cent of IT computing still occurs on premise, according to Jameson.

And with 5G and edge computing expected to surge over the next decade, many workloads will remain anchored to the ground or at least in a hybrid environment.

IBM says its hybrid cloud offerings can bring the innovation and efficiencies of cloud environments to wherever customers need them. Analysts speculated IBM’s Red Hat play was more about Red Hat’s flagship product — OpenShift — and tapping its cult-like culture of openness, more than its revenue, customers or open source software.

“Hybrid cloud it’s really about the flexibility to balance the need to keep some workloads on premise or in a hybrid cloud, while still taking advantage of the speed and flexibility of the public cloud,” Jameson said.

“IBM sees this as a way of meeting clients where they are in the journey.”

Despite being leapfrogged by Alibaba, IBM’s cloud business is still growing. While IBM’s overall 2020 Q3 revenue was down, its cloud revenue grew more than 60 per cent and nets Big Blue more than US$5 billion a quarter.

Jameson told Which-50,”We are well and truly growing at a great rate [in cloud]. We’re quite confident we have enough differentiation when you start talking enterprise level and all the things around security compliance.”

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