IBM and AT&T Partner on Cloud Offerings

IBM and AT&T are teaming up to offer their shared customers cloud services that use Big Blue's compute and storage infrastructure and network connectivity provided by the telecommunications carrier.

According to Tuesday's announcement, both companies will jointly sell the combined offering to their respective enterprise customers -- it's targeted at giants in the Fortune 1000 -- as an alternative to traditional infrastructure as a service (IaaS) cloud services which often use standard Internet connections.

The offering, to be released early next year, will use IBM's SmartCloud Enterprise+, the company's public IaaS-based cloud service, along with new virtual private network technology developed by AT&T Labs. The new VPN capability is designed to ensure secure connections and more reliable performance than Internet links provide, said Dennis Quan, vice president of IBM's Smart Cloud infrastructure.

"We feel it will give clients a lot more control over security, privacy and performance and we think will resolve some of the issues enterprises have with adopting cloud computing," Quan said in a telephone interview. Quan added the service is suitable for development and testing, as well as to run enterprise applications and even transaction-oriented Web sites.

Given the target audience of Fortune 1000 customers and the implied, though undisclosed, improvement in performance, this so-called "breakthrough" new VPN capability will come with a price premium, though the companies aren't saying. Also worth noting is the fact that both companies are members of the OpenStack effort. It is unclear when or if this service will support the OpenStack networking protocols. Quan would only say IBM is "deeply committed" to OpenStack.

The new VPN technology from AT&T automatically allocates network services to compute infrastructure, according to the announcement. This automation lets customers scale resources on demand much faster than if provided manually, both companies said. The companies said they will offer service-level agreements, over 70 security functions and "high levels" of security embedded on both wired and wireless devices authenticated to a customer's VPN.

The announcement had me wondering if AT&T is going to scale back its own public cloud infrastructure and platform services in favor of sourcing IBM's. In an e-mailed statement from an AT&T spokeswoman:

"This is AT&T's most recent step in executing its strategy to deliver cloud services that meet the needs of a wide variety of users including large and medium enterprises, developers, and internet-centric businesses. We recognize that one size does not fit all when it comes to cloud, and see the opportunity to provide a managed alternative to AT&T Compute as a Service that pairs AT&T's virtual private network technology with IBM's SmartCloud Enterprise+ infrastructure to deliver a highly secure and flexible cloud offer to businesses."

While these companies compete to some extent, it appears both stand to benefit from working together. AT&T can provide direct links from private cloud and premises-based datacenters to IBM SmartCloud Enterprise+, filling a gap in Big Blue's portfolio while giving AT&T another option to deliver IaaS, even if the service is not AT&T's.

It is not clear how big AT&T's enterprise public cloud service is but IBM's is presumably bigger. The company said it expects its cloud revenue to hit $7 billion by the year 2015. While the company hasn't disclosed its cloud revenues to date, IBM said it doubled last year over 2010.

What's your take on this pairing arrangement? Comment below or drop me a line at [email protected].

Posted by Jeffrey Schwartz on October 10, 2012