IBM has opened four new data centers: two in London, one in San Jose (California) and one in Sydney.
The new facilities bring the company’s total to 59 data centers in 19 countries, including four in Australia, five in the UK and 23 in the US.
In the first quarter of 2017, IBM had the third largest share of the cloud market after AWS and Microsoft Azure.
The company reported its second quarter results yesterday, and found that its net income has decreased by two percent since Q2 last year, marking the 21st consecutive quarter of revenue decline. Despite this, IBM’s cloud revenue is up 17 percent year-on-year (with adjusted currency, 15 without). In 2016, its cloud revenue grew by 35 percent.
IBM has stated that it expects revenues from so-called strategic imperatives (such as AI and cloud computing) to increase in the second half of 2017 as a result of having signed new cloud contracts, including a 10 year cloud outsourcing deal with Lloyds Bank and a joint venture with China’s Dalian Wanda.
According to Synergy Research, overall cloud revenues worldwide are expected to increase between 23 and 29 percent on average every year for the next five years, meaning there is more room for IBM’s cloud to grow.
The company believes that becoming the first cloud platform to adopt the EU’s Data Protection Code of Conduct for Cloud Service Providers, the official recommendation set out ahead of adoption of GDPR, means that organizations seeking out security in the cloud will flock to its services.
IBM’s chief financial officer Martin Schroeter also stated that the company’s “cognitive cloud” - i.e. its cloud platform combined with cognitive computing system, Watson - will give it the upper hand over other cloud providers.
At the same time, Wall Street analysts at Jeffries have suggested that, even though IBM offers “one of the most complete cognitive platforms available in the marketplace today,” it is also one of the most complex, requiring ”significant consulting work to gather and curate data.” Furthermore, the report found that IBM is not employing nearly as many AI experts as its rivals, meaning the system could soon become obsolete.