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IBM's Cloud: Jim Comfort On Competitive Advantages - IBM Exclusive Interview (Part 2)

In this second part of my interview with Dr. Comfort, we talk about how transparency and control plays an important part of IBM's positioning against the competition.

Dr. Comfort also highlights the need for IBM to make their messaging simpler without oversimplifying the concept of cloud itself.

At the end, I have outlined my own analysis based on what I learned from Dr. Comfort.

IBM Datacenter in Toronto

In Part 1 of my interview with Dr. James Comfort, IBM's (NYSE:IBM) Chief Technology Officer for Cloud, he spoke about how the company was positioning itself in the industry as a leader in hybrid cloud and how that approach was the one that many enterprise customers would be open to. Click here to see Part 1.

In this segment, I ask him about IBM Cloud's competitive advantages and how they are responding to the competition's approach to the market.

In order to help follow the thread of the conversation, I have interspersed the interview with my own thoughts, opinions and analysis.

Shudeep Chandrasekhar:

So, moving on to data centers, over the last 12 months, IBM has been aggressively adding data centers - about five additional data centers in the last one year alone. This is quite an aggressive move. How exactly is IBM leveraging that presence? Is it something for the future that you're planning for now, or is there something specific around that?

Jim Comfort:

We are building out the distributed model because our model allows us to do that and bring the economics into multiple regions. We were convinced early on that regulatory compliance and data privacy and other enterprise factors would gravitate toward a local model. Local might be within the EU or in the Americas or Canada, so our strategy has been to open multiple datacenters in various regimes that have strong regulatory compliance requirements.

Our network is unique in the industry in that it interconnects all of the data centers and it allows clients to be in control over what does or doesn't move. When we sit down and go through with the CSO of a large financial institution or other regulated industry, that difference becomes very, very clear.

Microsoft (NASDAQ:MSFT), AWS (NASDAQ:AMZN) and Google (GOOG, GOOGL) have a degree of opaqueness. They'll tell you, they'll promise me, you know, "trust me," but you can't really verify. In SoftLayer, we can expose and give them visibility so they can be assured that once the devices are theirs, we - IBM - no longer have access. They have total control, they can audit that control, they can verify it - and that's a very powerful element of helping clients through that.

Again, three or four years ago, security was a reason not to move to cloud. Now, it's an engineering problem to be solved. What we're doing with the build-out is that we're making it easier to address compliance and regulatory concerns, as well as performance and other factors. By being able to have the services that need to be local "local," and being able to aggregate data faster across the network, there's a lot of benefits.

You've now seen that Amazon did not open new regions in the past - they've now opened or are planning to open five or six new regions this year. Microsoft has been pretty aggressive - they had to come up with a strategy to enter into Germany, for instance, with partners. So, quite frankly, we've been leading in this space, and they are recognizing the same thing we saw three years ago, when we acquired SoftLayer.

My Commentary

The data center element is a crucial one for cloud operators targeting the enterprise segment. Local compliance and regulatory restrictions are often prohibitive for large companies with sensitive data attempting to move to the cloud.

But the real question is: do they actually have an advantage with only 47 data centers against Microsoft's 100+? The answer here may not be in absolute numbers. As Dr. Comfort points out, IBM does take the effort to showcase the transparency and control that highly regulated industries can rely on. If you go to the SoftLayer web page about their data centers, you'll see that each data center's capabilities are laid out individually and...