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IBM Opens Its First Public Data Center in India

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IBM CorporationIBM opened its first public cloud data center in India at Chennai. This data center forms a part of IBM's $1.2 billion global cloud data center expansion strategy.

IBM already has a private cloud data center located in Mumbai. The Chennai data center is expected to provide "local customers and end users increased performance and speed for data traveling to and from the region." It will provide an entire range of SoftLayer infrastructure services.

SoftLayer is the primary infrastructure of IBM's cloud operations. IBM acquired SoftLayer for nearly $2 billion in 2013 and since then has been rapidly expanding its cloud data center footprint worldwide. A few days back, the company opened a cloud services support data center in Jundiai, São Paulo, its second such facility in Brazil and third in Latin America.

Data centers form the backbone of IBM's business and the company's continuing investment reflects its commitment on developing the technology. Cloud computing, being one of the pillars of IBM's growth plan, is expected to contribute revenues of $7 billion by the end of 2015.

Apart from cloud, other long-term growth drivers include Big Data & business analytics (worldwide data spending expected to be $266 billion, revenues are likely to grow at 6% CAGR through 2017), mobile ($103 billion addressable market), security ($74 billion market opportunity) and social business ($89 billion addressable market).

IBM's Chennai data center also reflects the company's policy to grow operations in the strategic Indian market. India is expected to see rapid growth in cloud computing given the tremendous growth in its financial sector. Gartner, Inc. projects India's public cloud services market to grow 33% year over year to $838 million by 2015. Also, the firm expects cloud services spending in India to reach $1.9 billion by 2018.

As per Evans Data Corp., the number of developers in the country will reach 5.2 million in 2018, nearly doubling from the current figure of 2.75 million developers, making it the world's biggest developer populace overtaking United States.

To tap the huge potential, IBM has also tied up with the country's largest software trade organization, National Association of Software and Services Companies or NASSCOM to launch Techstartup.in. Techstartup.in is a digital platform through which IBM expects to bring all the components of the "Indian start up ecosystem" to interact with each other and pave the way for growth of cloud computing in the country.

IBM will also be launching developerWorks Premium, which should enable developers both in India and across the globe to efficiently "prototype and deliver new cloud projects." IBM has also forged partnerships with regional information technology service providers such as Tech Mahindra, Accenture and CSC to offer its cloud technologies, including IBM Bluemix, to developers across the globe.

It's not just IBM that realises India's potential. A few days back, Microsoft Corp. MSFT announced the launch of three Azure data centers in the country, in Pune, Chennai and Mumbai. Even Amazon.com Inc. AMZN is well aware of this fact and therefore has been investing heavily in the market. In an era where Indian enterprises are shifting from traditional data infrastructure to cloud-based services, Amazon has announced its plans to develop an AWS infrastructure region in India in 2016.

At present, IBM carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Top Image Systems Ltd. TISA , sporting a Zacks Rank #2 (Buy).

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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.

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