The $42-million project, which was announced Monday, establishes an IBM Compute Cloud Centre in Markham, Ont. The building will house the company’s “pay-as-you-go service” aimed at letting IT shops buy virtual servers, software images, and storage capacity on a per-hour basis.
The cloud service will take advantage of IBM’s 17 existing data centres across Canada, allowing customers to use computing resources residing in the country.
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Doug Jones, a cloud computing executive at IBM Canada, said customers will be able to select computing resources and services from a pre-loaded menu of IBM technologies at a varying cost of “just a few cents per hour.”
“You log-in and can decide what software, what operating system, and how much memory you want,” he said. “Within minutes, the machine is built and you are up and running.”
A very detailed list of the services and prices offered by IBM Canada is available online.
The company is initially gearing the public cloud service at software and Web developers looking for on-demand computing power for their testing and development environments. Jones said organizations will typically spend “two to six weeks” acquiring and setting up a testing environment.
He added that a classic use case would be for an IT team that needs “100 virtual machines for only three hours on a Sunday afternoon.”
IBM is also offering the cloud centre’s services to IT solution providers and resellers, with two firms, VisionMax Solutions Inc. and Buchanan Technologies, already on-board with the initiative.
IDC Canada Ltd. expects the software and infrastructure-as-a-service markets to reach the $1 billion mark by 2015.
Mark Schrutt, an analyst covering services and enterprise applications for the research firm, said IBM is well positioned in this market as the first global IT vendor out of the gate with a cloud delivery offering hosted in Canada. He said that IBM will compete with services from Amazon and Rackspace Hosting in the U.S., which currently have “a fairly good chuck of the cloud environment for test and dev.”
He added that the company would likely not be competing against established co-location and managed hosting companies.
The IBM public cloud announcement comes just days after research firm In-Stat LLC said the public cloud has limited interested among large enterprise customers in the U.S.
The Scottsdale, Az. research firm said public cloud spending by U.S. businesses will reach US$11 billion by 2014, up from roughly $5 billion in 2010. But despite the large number, 65 per cent of all that spending will be concentrated in the smallest of businesses, according to Greg Potter, a research analyst with In-Stat.
With the small business (1 to 99 employees) and home office segment leading the adoption, Potter said, all indications are that large enterprises are choosing to keep their cloud investments internal.