Vodafone's new enterprise cloud partnership with IBM is a
collision between cloud and connectivity. "You're not going to be
able to take advantage of the cloud without being able to connect
to it," Michael Valocchi, managing partner of the communications
sector of IBM Business Services, tells Light Reading.
Simply connecting to the cloud and using it as a data repository
brings benefits, but connectivity becomes an increasingly complex
requirement as enterprises look to the cloud for digital
transformation "The opportunity increases, but so does the
complexity," Valocchi says.
That's the trend driving the partnership between IBM and
Vodafone, announced in
January, of which Valocchi is co-leader, along with a
Vodafone colleague.
For the partnership, IBM brings to bear its own IBM Cloud
platform; as well as its Multicloud Manager to connect to Amazon
Web Services, Microsoft Azure, Google, Salesforce and other cloud
platforms; IBM's blockchain services; and IBM professional
services teams and methodologies.
Vodafone provides connectivity to move data from connected
devices, to the edge, to the cloud, and back again. Vodafone
brings to the partnership its mobility connectivity and networks,
including 5G rollouts in Europe, software-defined networking
skills to transform networks for global enterprise customers, and
Internet of Things platforms. Vodafone already provides
connectivity to 80 million business and industrial devices. And
as Vodafone rolls out its edge computing capabilities, those
become available to the partnership and its enterprise customers
as well, says Greg Hyttenrauch, Vodafone director of cloud and
security, the other co-leader of the Vodafone-IBM partnership.
The partnership is launching with offices in the UK and later in
Germany, and training their separate teams on operating as a
single unit.
IBM and Vodafone chose their partnership so they could present a
single face to the enterprise customer. In a traditional channel
relationship Vodafone would sell to the customer and then turn to
IBM for fulfillment of the cloud component. Vodafone would then
become IBM's customer, and the enterprise would be Vodafone's
customer. Instead, the enterprise will become a customer of the
partnership together, Hyttenrauch says.
"We feel it's essential the customers think they're working with
one entity," says the Vodafone man. "We don't want customers to
see funky handoffs."
However, the two companies stopped short of forming a legal joint
venture, to get to market faster and avoid legal complications
and the requirement for shareholder approval, Hyttenrauch
says.
Vodafone has a history of cloud partnerships: It first partnered
with Alibaba several years ago to provide enterprises with a
uniform cloud platform spanning Europe and Asia, Hyttenrauch
says.
As an example of how the partnership might work, the two
companies cite agriculture. Farmers, coops, and the banks that
serve them want to increase yield and reduce waste. They connect
sensors around crops, in the soil and in the air using drones.
"Farms by their nature are rural, wide expanses, and ability to
connect to IoT is limited," Hyttenrauch says. "We can offer
connectivity with private network solutions." Vodafone can also
capture data to its edge platform, and perform compute
there.
"We can collect all the information about the farm, but what do
you do with it?" Hyttenrauch says. Thats where IBM comes in. IBM
can provide data analysis, combining with weather data from
IBM-owned Weather Company, using Watson for analysis, and
blockchain to manage the complex supply chains inherent in
agriculture.
Part of the partnership is a $550 million
deal for IBM to take over management of Vodafone's data
centers.
Separately, the two companies have had mixed success in the areas
the joint venture addresses. Vodafone
Business service revenues declined by 0.5% in the third
quarter. Those services comprise 30% of Vodafone Group
service revenues. The good news was that fixed, representing 32%
of segment revenues, grew 3.5%, driven by market share gains and
strong growth in cloud services, but that growth was offset by a
mobile decline of 2.2%. However, IoT connectivity revenues grew
strongly, with 27% growth in SIM connections, to 80.9
million.
So for Vodafone, the IBM partnership strengthens its business
services in the areas where those services are already strongest:
cloud and IoT services.
IBM saw full-year
cloud revenue up 12% to $19.2 billion in its most recent
quarter -- a fraction of the rate of the overall market, but IBM
sees itself as operating in a high-value segment of that market,
helping enterprises move mission-critical workload to hybrid
platforms from multiple cloud providers.
To help goose that cloud business along, IBM is
acquiring Red Hat, in a deal valued at $34 billion, bringing
Red Hat's open source mastery to IBM customers.
