IBM and Tech Mahindra join hands to create hybrid cloud system

IBM and Tech Mahindra on Tuesday said they are deepening their collaboration, especially in areas like 5G, hybrid cloud, automation and cybersecurity, as the two tech giants work towards building a billion-dollar ecosystem over the next three years.

Some key initiatives underway include the launch of Tech Mahindra’s Blue Marble on IBM Cloud for Telecommunications to drive 5G momentum, collaboration to grow cybersecurity business with IBM Cloud Pak for Security, and strengthening and expanding portfolio through cloud-based offerings.

The partnership will also see co-creation and co-innovation through innovation labs and Centres of Excellence as the two companies strengthen their partnership to pursue the USD 1 trillion Hybrid Cloud market opportunity.

“We see the opportunity in three things. In the near term, we see the opportunity around hybrid cloud and AI. And then in the medium to longer term, we see an opportunity in quantum,” IBM Chairman and CEO Arvind Krishna told reporters during a virtual briefing.

He said hybrid cloud is the destination for most enterprises and governments as these organisations continue to use a mix of multiple public clouds and on-premise infrastructure for various reasons like economics and regulations.

“That (hybrid cloud) opportunity is over a trillion dollars for the industry…artificial intelligence (AI) will unlock between USD 14-16 trillion of global productivity,” he said adding that the partnership with Tech Mahindra brings in a “potential revenue of a billion dollars for each of us”.

About 40 per cent of the revenue will be driven by Telco and 5G, powered by Hybrid Cloud; while 60 per cent will be driven by other industries. The five strategic focus areas include 5G, automation, hybrid cloud, cybersecurity, data and AI.

“We will be adding a lot of value to each other as we build almost a billion-dollar ecosystem for each other. We are building this on the success of the customers by solving some of their critical challenges,” Tech Mahindra CEO and Managing Director C P Gurnani said. He added that the pandemic has accelerated the adoption of technology.

Krishna noted that in 2021, IBM is doubling down to elevate its ecosystem through its new go-to-market model making it easier for partners to work with IBM and make the transition to a multi, hybrid cloud platform seamless for clients. Through this approach, IBM is looking at driving a multi-billion dollar portfolio with its ecosystem partners over the next three years.

India has a significant advantage and IBM India will continue to be at the forefront, driving innovation that is made in India, for India and the world, he added.

“We have an incredible focus on India. First, India as a source of great talent and the proof of that is our employee base in India, and how much service, and intellectual property they provide. And with a lot of collaboration, with a lot of the regulations in India that promote the export of both software and services from India,” he said.

Krishna said IBM is focussed on the India market itself and services top private sector banks and public banks, telecom services providers, industries, and it is on a “path to expand”.

“I think the Indian market is really vibrant… I really believe that remote delivery is going to offer Indian companies a great ability to expand their market share globally. But that implies that they all have to think about what is their digitalisation infrastructure and that is an opportunity for all of us to go in and help them expand,” he added.

The global partnership between Tech Mahindra and IBM spans over two decades. The companies have developed unique solutions and accelerators by leveraging IBM Blockchain, Data and AI and Security capabilities.

This is the latest collaboration between these two firms in hybrid cloud adoption, which started in 2015 when two signed a strategic teaming agreement.

In April of last year, In April 2020, Tech Mahindra had joined IBM hybrid cloud ecosystem with the aim to help customers transform operations by enabling them to migrate core business applications to the IBM Cloud.

In July, Tech Mahindra launched a new digital platform that leverages IBM blockchain for the global media and entertainment industry to enable production houses and content creators to track revenue, royalty payments, manage rights and address content piracy.

Currently, 60.9% of organisations globally are already using or are in the process of piloting a bridge cloud solution, and a further 2.7% plan to implement a hybrid solution within the next 12-24 months, according to a recent report by NTT.

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IBM to go carbon neutral by 2030

After the landmark EU Green Data Center Deal last week, IBM is the next tech giant to make a carbon neutrality pledge.

The veteran tech company announced its plans to achieve net zero greenhouse gas emissions 2030 to combat climate change.

CEO Arvind Krishna said that he is “proud” that IBM is leading the way to significantly reduce carbon emissions, and that this decision will put the company “years ahead” of the targets set out in the Paris Agreement.

IBM has laid out three short and long-term goals to achieve its ambition.

First, the company aims to reduce greenhouse gas emissions by 65 percent by 2025. This figure will be measured against the base year 2010. Next, it will set out to make 75 percent of its electricity consumption renewable by 2025, and 90% by 2030.

Last but not least, IBM also plans to utilise “feasible technologies”, such as carbon capture, to remove emissions in an amount which equals or exceeds the level of IBM’s residual emissions.

What is the EU Green Data Center Deal?

Introduced in late January, the EU’s Green Data Center Deal saw over 40 tech organisations, including Amazon and Google, come together to pledge to go carbon neutral by 2030. This deal was part of the EU’s 2019 Green Deal which aims to make Europe the world’s first climate neutral region by 2050.

IBM’s latest pledge will be carried out in more than 175 countries where it operates, and this may very well include its offices and facilities in Europe as well as China, where President Xi Jinping has also pledged to slash carbon emissions by at least half by 2030.

This also means that if all goes according to plan, IBM will achieve carbon neutrality ten years ahead of its rival Amazon.

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IBM appoints Gary D. Cohn, former Trump advisor, as Vice Chairman

Tech giant IBM has announced the appointment of Gary D. Cohn as its new company Vice Chairman.

Mr. Cohn joins from the White House, where he was chief economic advisor to President Donald Trump from 2017 to 2018. Prior to that, he served as President and COO of Goldman Sachs.

With his expertise and wide range of contacts in the business world, Mr. Cohn will be working alongside CEO Arvind Krishna and the IBM Executive Leadership Team to work on matters such as business development, client services, public advocacy and client relationship management.

Mr. Cohn expressed delight in the company’s decision.

“With the company’s long history of innovation and transformation for every technology era, and a focused growth strategy that will capitalize on the enormous opportunity in hybrid cloud and AI, this is an exciting time to begin working alongside Arvind, the IBM team and IBM’s incredible roster of clients,” he said.

“Gary is a globally respected leader with deep experience operating at the center of business and government,” said CEO Mr. Krishna.

“As a senior representative of IBM, his knowledge of technology and business transformation, combined with policymaking expertise, will bring unique value to our clients and stakeholders as we accelerate our hybrid cloud and AI strategy,” he continued.

Mr. Cohn is currently Co-Chairman of Cohn Robbins Holding Corp. (CRHC), a company that specialises in mergers and acquisitions. He also has investments in various sectors in tech, including cybersecurity, blockchain infrastructure, regulatory technology and medical technology.

IBM and Samsung join forces to spur cloud and 5G development

IBM and Samsung have signed an agreement that will see both tech giants collaborate on hybrid cloud, 5G, and edge computing to steer towards the Industry 4.0 Revolution and encourage digital transformation.

Samsung will be combining its signature Galaxy 5G mobile devices, and end-to-end enterprise network solutions with IBM’s network management hybrid cloud and edge computing offerings.

“The move to standalone 5G has accelerated the adoption of Industrial IoT solutions and will require businesses to adopt an edge computing strategy that allows them to manage their IT environments from anywhere,” said KC Choi, EVP and Head of Global Mobile B2B Team for the Mobile Communications Business at Samsung Electronics.

IBM and Samsung’s collaboration will be built on Red Hat’s open architecture. IBM acquired the open source software company in 2018 for $34 billion.

“We are excited to work with IBM to discover how our unique devices, mobile IoT and network solutions can provide frontline workers with access to better data and more actionable insights to take their business to the next level.” Mr. Choi added.

Both companies plan to set out to lend their expertise to develop private 5G networks, which will also be built on Red Hat via the company’s flagship open source container application platform, OpenShift.

“The transition of communication networks from proprietary architecture to intelligent, software-defined hybrid cloud platforms enables the creation of enormous new value in the 5G and edge era,” said Steve Canepa, Global GM and Managing Director of IBM’s Communications Sector.

The goal of the partnership is to leverage hybrid cloud solutions, which will enable enterprises to draw greater insights from data at the edge, improving operational performance, increasing worker safety, and minimising downtime.

“5G devices and network solutions from Samsung, along with IBM and Red Hat’s open, hybrid cloud capabilities, can help organisations across all industries accelerate their transformation and solve real business problems, while unlocking the true power of 5G and edge,” added Mr. Canepa.

Samsung, IBM, and Red Hat also plan to deliver AI-powered solutions for Industry 4.0 and beyond by leveraging the power of 5G devices, cloud-native 5G networks, and advanced edge computing platforms.

IBM to slash thousands of jobs as it prepares for hybrid cloud

Since CEO Arvind Krishna’s historic decision to break up the company’s century-long hardware business in early October, IBM has been actively gearing up to supercharge their cloud technology.

Today, the veteran tech titan has come forward with another major announcement: it is looking to cut up to 10,000 as part of a company restructuring process to prepare for hybrid cloud development.

“Our staffing decisions are made to provide the best support to our customers in adopting an open hybrid cloud platform and AI capabilities,” said an IBM spokeswoman in an emailed statement to Bloomberg.

The job cut will be seen primarily in Europe, with the UK and Germany set to be the most affected. Employees in Italy, Belgium, Poland, and Slovakia are also expected to be laid off.

The mass layoff would be equivalent to the loss of 20% of IBM’s workforce in the region. Bloomberg reports that the job cut in Europe is expected to be completed by the end of mid-2021.

“We also continue to make significant investments in training and skills development for IBMers to best meet the needs of our customers,” the statement added.

IBM has set its sights on India’s workforce by collaborating with India’s Ministry of Electronics and Information Technology (MeitY) to deliver labour upskilling courses to tech professionals in the country.

“This collaboration with IBM aligns with the National Education Policy’s emphasis on learning 21st century skills to ensure the future-readiness of India’s youth and realising the vision of Aatmanirbhar Bharat,” said Dinesh Tyagi, the Managing Director of the Common Services Centre e-Governance Services.

Through MeitY’s Common Services Centre (CSC) Academy, IBM will be curating STEM content, including cloud and AI, for not only professionals in the industry, but also women and underprivileged youths.

On the partnership with the Indian government, Sandip Patel, Managing Director at IBM India/South Asia, said: “Exponential technologies like AI and Hybrid Cloud can drive path-breaking innovations and fuel the nation’s digital India vision. To make this a reality there is a need to create the right avenues and platforms for learners to be equipped with industry-ready skills.”

Arvind Krishna’s decision to focus on cloud came at an opportune time, and IBM’s latest quarterly results show that the company has time to compete in the market. Although total revenue fell by 2.6% to $17.56 billion, it earned $6 billion in cloud revenue, which was a 19% increase year-on-year.

By Jie Yee Ong, Tech Reporter

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IBM beats revenue estimates off the back of cloud strength

IBM has successfully beat Wall Street revenue estimates, driven by high demands for its cloud services.

The tech heavyweight has staked its future on its cloud arm, as it prepares to spin off one of its legacy units to support the venture.

“The strong performance of our cloud business, led by Red Hat, underscores the growing client adoption of our open hybrid cloud platform,” said Arvind Krishna, CEO of IBM.

IBM’s total cloud revenue for their third quarter of 2020 was up 19% to US$6 billion, while their total cloud revenue was up 22% to US$24.4 billion over the last 12 months.

Mr. Krishna believes that separating the managed infrastructure services business into the spin off ‘creates a market-leading standalone company’ that further sharpens their focus on IBM’s open hybrid cloud platform and AI capabilities. IBM believes this will accelerate their growth strategy and better position them to seize the $1 trillion hybrid cloud opportunity.

“In the third quarter we continued to deliver strong gross profit margin expansion, generated solid free cash flow and maintained a sound capital structure with ample liquidity,” said James Kavanaugh, IBM Senior Vice President and CFO.

In Q3 2020, the company generated net cash from operating activities of US$4.3 billion, or US$1.9 billion excluding Global Financing receivables. IBM’s free cash flow was $1.1 billion and $15.8 billion of cash on hand, which is up $6.7 billion from year-end 2019.

“We have the necessary financial flexibility to increase our investments in hybrid cloud and AI technology innovation and skills, while remaining committed to our long-standing dividend policy,” said Mr. Kavanaugh.

Despite this success, IBM shares fell by 3% after the company did not issue a forecast for the current quarter, citing uncertainty around a global economic recovery due to the COVID-19 pandemic.

“Clients’ near-term priorities continue to include operational stability, flexibility and cash preservation, which tends to favor [operating expenses] over [capital expenses]. This is resulting in some project delays and purchase deferrals,” said Mr. Kavanaugh.

IBM’s total revenue fell 2.6% to US$17.56 billion in Q3 220, but was slightly above analysts’ estimates of US$17.54 billion, according to IBES data from Refinitiv.

Excluding the impact from currency and business divestitures, sales declined 3.1%, while the global technology services segment, IBM’s biggest unit that caters to some of the world’s largest data centers, reported a 4% drop in revenue to $6.5 billion.

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Is India ready for a hybrid cloud future?

Multinational tech company IBM published its September report on hybrid cloud market in India, revealing that the country’s businesses are ready to embrace hybrid cloud driven growth. 

IBM projects that spending on cloud systems in India will increase by 49% in 2023. But currently only 20% of organisations have moved their workloads to the cloud, despite 90% of global companies adopting a form of the technology.

What is hybrid cloud?

Hybrid cloud is essentially a combination of public cloud and private cloud systems, allowing data to be shared between them. Using a hybrid cloud system accelerates key business operations by harnessing data for improved decision making, enhanced process automation and higher cost efficiency.

IBM estimates that the value derived from using a full hybrid and multicloud platform delivers 2.5 times more than a single platform and vendor approach, but only 29% of businesses in India take advantage of a multicloud strategy.

While businesses in India still fall behind in hybrid cloud adoption compared to international standards, the tech giant’s report predicts the size of the Indian market will come to prove in time the importance of turning to cloud management platforms for increased governance and efficiency.

One of the biggest challenges of digitally transforming operations is achieving buy-in from stakeholders and ensuring employees have ample skills to transition to the new technology. But IBM found that 51% of respondents in India understand the business and IT benefits of switching to a multicloud strategy, which might explain why a predicted average of six hybrid cloud platforms will be used by businesses in India by 2023.

Who’s adopting hybrid cloud?

Top companies in India, including Bharti Airtel, Vodafone Idea, Godrej Group and even Century Cement are leading the transformation to hybrid cloud. 

Airtel, one of India’s largest telecommunication services, is currently building a new network cloud to maximise capacity and minimise capital expenses by onboarding services faster with seamless integration with current systems. 

Vodafone Idea’s new hybrid cloud platform allows the company to deliver core network functions and implement edge computing technologies for its 300 million telecommunication subscribers at a breakthrough speed.

Indian conglomerate, Godrej Group, leveraged hybrid multicloud solutions to build a future-ready IT infrastructure, resulting in a 10% reduction of total cost of ownership and 100% increase in disaster recovery coverage.

Even cement shipping company Century Cement adopted cloud technology to connect their electronic billing processes with government systems, saving 60% more time on paperless processing and management as well as reduced operating costs.

What’s next for hybrid cloud?

The next chapter of the cloud is expected to see a shift of core business operations, optimising everything from supply chains to sales, with more investment in hybrid multicloud platforms on the way.

IBM’s advice to Indian businesses consists of five steps. First, businesses should strategise by understanding how digitally transforming to the cloud aligns with their wider operating models.

Next, the task is to design your transformation journey by understanding and coordinating the different cloud platforms available, including public cloud, private cloud and traditional IT environments.

Third, is the matter of moving to a hybrid cloud platform. IBM recommends using containers and unified open platforms to decouple the rate and pace of transformation from specific deployment models or constraints.

After the much anticipated move, it’s time to build a multicloud orchestration platform used to control costs, address security concerns and skill gaps in an organisation. It is important during the build phase to combine data and applications when building multicloud solutions.

Finally, once you have your solutions, it is important for your business to constantly manage and assess the platform with regard to cost, optimisation and regulations.

To achieve a competitive advantage, businesses have to start prioritising operations that can be moved to cloud, then migrate said skills and optimise continuously.

Aligning businesses activities with cloud platforms is the business model of the near future. Indian firms have the drive to prepare for the transition, and should do so in order to keep up with a global market reshaped by COVID-19.

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