IBM Heads into the Clouds

Stephen DeAngelis

May 1, 2008

Over the past several months, I have written three posts dealing with IBM’s involvement in a concept known as cloud computing [The Coming Age of Cloud Computing, The AIR is getting Blurry with Clouds — Computing that is, and IBM’s Big IT Bets]. The posts dealt mostly with the potential of this new concept. New York Times’ columnist Steve Lohr reports that IBM has now taken the first steps towards creating a cloud computing market [“Cloud Computing Gains Steam With New I.B.M. Gear,” 23 April 2008].

“I.B.M. is entering the market for Internet-focused data centers with computer systems designed to reduce power consumption sharply and take up less floor space. The move by I.B.M. … is the most recent sign that the major computer makers are beginning to compete aggressively to supply Internet companies and others with the specialized hardware needed for so-called cloud computing. In the cloud model, data centers with vast stores of information and processing resources can be tapped from afar through a personal computer, cellphone or other device.”

Although the hardware being offered by IBM is an important step in the direction of cloud computing, it has to be considered only a partial answer to the vision that the concept’s developers have painted. Cloud computing according to Christophe Bisciglia, a 27-year-old senior software engineer at Google, is a network made of hundreds of thousands, perhaps even millions, of cheap servers. These are not the mainframes IBM is usually associated with, they are generally no more powerful than the desktop PCs used in businesses or in homes. This “cloud” of small computers stores almost unimaginable amounts of data that can be searched faster than today’s set-up, which would help companies like Google find quicker answers to user queries. In the highly competitive worlds of search engines and on-line gaming, fractions of seconds make a difference.

“The pioneers in cloud computing have been Internet companies like Google, Yahoo, social networks and online game services, which have often designed their own data centers. The Internet companies’ requirements are growing, but mainstream corporations are also increasingly interested in cloud data centers, opening up a large potential market.”

Over the next five years, that market is supposed to grow into a multibillion-dollar business. That’s the kind of money that attracts IBM; but it’s not alone.

“Sun Microsystems introduced a product for this market last year, a self-contained data center housed in a 20-foot shipping container. Dell started a cloud computing effort last year. Hewlett-Packard, analysts say, is expected to announce its specialized entry soon. Smaller companies like Rackable Systems and Varari Systems have data-serving computers designed for cloud computing. But analysts and customers who have tested the I.B.M. product, called iDataPlex, said the company had taken an original approach that seemed to place it ahead of rivals for now. I.B.M. says its systems consume 40 percent less power than standard servers, and are designed to pack more than twice as many computers into the same space.”

One of the unique innovations introduced by IBM to reduce energy consumption was borrowed from other industries, like the automotive and utility industries — using water cooling systems instead of air conditioning.

“The I.B.M. systems, analysts note, have an innovative water-cooling mechanism, so they do not heat up a data center, thus eliminating the need for most air-conditioning. … The I.B.M. systems … are intended for high-end customers with data centers that have a thousand to tens of thousands of server computers, said James Gargan, the I.B.M. vice president for xSeries computers, which are servers powered by industry-standard microprocessors produced by Intel or A.M.D. The I.B.M. systems will mostly be made to order for large customers. One offering involves putting 1,500 server computers into a 40-foot truck trailer, ready to plug in from a parking lot.”

In addition to companies with a World Wide Web business focus, financial services companies have also expressed interest in cloud computing.

“Some large companies in finance and other traditional industries have been testing them as well. Jeffrey M. Birnbaum, a managing director and chief technology architect of Merrill Lynch, said the I.B.M. systems in a trailer container would cost an estimated 50 percent less in real estate, set-up and construction costs than a similar conventional data center. The energy and operating cost savings, he said, would be an added advantage. Merrill Lynch, Mr. Birnbaum said, has very different computing requirements from an Internet company. But the similarity is that Merrill Lynch has large computing needs, and must add capacity flexibly and efficiently. ‘I have my own cloud, if you will,’ he said. Cloud data centers typically require stripped-down servers, tailored for specific computing tasks. So the big computer makers cannot sell their off-the-shelf servers in this market. ‘It’s a completely different engineering model for I.B.M. to make these low-cost, highly scalable servers,’ said Joe Clabby, an independent analyst in Yarmouth, Me.”

Cloud computing has clearly moved off the drawing board and into the market. In the age of information, cloud computing will fill a niche that was created by the Web. As its benefits become more obvious, other industries may determine they too have a need for a cloud of their own. Cloud computing is unlikely to be the last computing niche that emerges. When computers filling entire rooms were first introduced, people couldn’t imagine that computers would ever prove useful to home users or individual businessmen. As we find ways to use information more effectively, manufacturers will also find ways to improve how that information is delivered.