IBM (IBM) has set a record as the highest patent holder for the 26th year consecutively. The technology giant achieved a record-breaking 9,100 patents in the U.S. in 2018, crossing the 110,000-patent milestone. Since its inception, the 100-year-old company has experienced different technology eras and has molded itself every time to lead the race.
Here’s a look at how IBM is working on the hybrid multi-cloud space. (ZDNet has a quick intro in what multi-clouds are, if you're not familiar. Check it out here.)
IBM’s strategy is one of “innovation, transformation and a constant evolution to higher value.” Its three strategic imperatives—data, cloud and engagement—are the drivers of transformation, helping it align for higher value.
Just how valuable is it? The revenue from strategic imperatives was reported at $25 billion during in 2014, representing 27 percent of IBM's total revenue. During 2017, that number jumped to $36.5 billion, equivalent to 46 percent of its overall revenue. It is expected to cross $40 billion for the 2018 (earnings to be declared in January 2019).
IBM has channelized its research and development, capital expenditure and acquisitions to back its ‘strategic imperatives’—which is reflected in the fact that nearly fifty percent of the patents granted to IBM in 2018 are “pioneering advancements in AI, cloud computing, cybersecurity, blockchain and quantum computing.”
Over recent years, the cloud computing market segment has grown really fast. The segment holds ample scope for further penetration (and revenue generation) and forms an important business segment not just for IBM but for almost all major technology players such as Microsoft, Amazon, Google and Alibaba—making this space highly competitive. Within this segment, Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS) are the three offerings which can either be on a public, private or hybrid cloud.
While cloud adoption is clearly gaining traction, enterprises are still in the early phases of their journey. A report by Ovum shows that 20 percent of business processes have already moved to the cloud while 80 percent of mission-critical workloads and sensitive data are still running on-premises because of performance and regulatory requirements.
The seamless and secure movement of the critical, more complex workloads requires an open, hybrid cloud approach to developing, running and deploying applications in a multi-cloud environment and existing information technology systems.
IBM is focusing on the emerging hybrid multicloud segment. Based on interactions with its clients, IBM concludes that most enterprises view future cloud environments as being both hybrid and multi-cloud.
“A hybrid approach enables teams to run applications across private, dedicated and multi-tenant public cloud infrastructures, while a multi-cloud approach embraces multiple vendors to support a breadth of enterprise workloads.” A report by IBM highlights that by 2021, 98 percent of organizations plan to adopt multi-cloud architectures, but only 41 percent have a multi-cloud management strategy and just 38 percent have procedures and tools to operate a multi-cloud environment.
There is a huge opportunity which is quantified in numbers in a report that projects the hybrid cloud market size to grow to $97.64 billion by 2023, at a compound annual growth rate of 17 percent during 2017-2023.
IBM is investing in research on cutting-edge cloud technology, engaging in partnerships and acquisitions to strengthen its cloud arsenal. The company received more than 2,000 cloud computing patents during the year—more than one-fifth of the overall patent portfolio. One of its featured patents for cloud computing has been the “specialized micro-hypervisors for unikernels” that takes a lightweight approach to improving isolation and security between a cloud application and its host, while also reducing provisioning times and improving performance.
In October 2018, IBM announced the decision to acquire Red Hat, Inc. (RHT) for $34 billion.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. “IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”
In mid-October, IBM unveiled the world’s first multi-cloud management technology to make it easier to manage, move and integrate apps across different cloud computing infrastructures with increased visibility of business processes, governance and security.
To boost the adoption of hybrid cloud by enterprise, IBM and VMware, Inc. (VMW) announced new offerings in November 2018. Together, they are delivering new solutions to help enterprises “accelerate hybrid cloud adoption without incurring the cost and risk typically associated with retooling operations, re-architecting applications and re-designing security policies.”
While multiple challenges remain, IBM is actively committing resources towards the emerging hybrid multi-cloud landscape which it sees as essential for unlocking deeper and widespread cloud usage by businesses, and placing itself at the forefront of that industry.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
