IBM Boosts Public Sector Muscle Slashes SoftLayer Prices

IBM is opening two new cloud services data centers for the government and also upped its game in the server space by slashing the prices of multiple cloud services.

Unlike Amazon, Google or Microsoft, which like to boast about cloud service price cuts, IBM takes a different approach and announced the SoftLayer price cuts very, very quietly.

Keeping a Low Profile

It's unclear why SoftLayer has been so shy about publicizing the good news. It might have something to do with the fact that it still costs slightly more than Amazon ($0.03 per GB per month) or Google, which costs $0.26 per GB per month to SoftLayer’s $0.04 per GB per month.

SoftLayer Object Pricing.jpg

SoftLayer Object Pricing

It could also be that IBM's priority with SoftLayer is not cost, but developing its cloud services portfolio and client base. This would explain why it is promoting the creation of new data centers for government agencies, while the price cuts were introduced almost as an afterthought.

There is also the fact that SoftLayer provides different, if similar, services than the competition by providing access to servers on hourly, or monthly, payment plans. Francisco Romero, SoftLayer’s Chief Operating Officer said they just don’t do competition.

We don’t believe in price wars, because the cloud is not a commodity. There is a significant difference between what you get from one provider to the next,” Romero said. “We see it every day. Other providers might have lower starting prices, but then the customer has to pay an additional fee for bandwidth, storage, support and they tend to be based on an oversubscribed or over segmented infrastructure model."

SoftLayer Government Data Centers

The irony of this is that it comes at the same time IBM announced its new government data centers, which no matter what Big Blue says about competition, aim to give both SoftLayer and IBM a lot more competitive cloud muscle, particularly in public sector computing.

The cloud data center for the US government in Dallas is due to open later this month, and one in Ashburn, Va. is due to open in the fall.

Both centers will provide SoftLayer cloud Infrastructure-as-a-Service (IaaS) that conform to US Federal Risk and Authorization Management Program (FedRAMP) and Federal Information Security Management Act (FISMA) standards.

While companies like Microsoft and Google offer cloud services to federal organizations, the SoftLayer data centers will also open the market to the SoftLayer ecosystem. This in turn will enable SoftLayer's business partners to provide cloud services like desktop virtualization, security and geospatial services directly to the government.

IBM Government Data Centers.jpg

Hybrid Computing

Then there’s hybrid computing through hybrid clouds. Hybrid computing provides enterprises with the possibility of keeping some of the data and computing needs on-premises, and pushing the rest onto the cloud.

In discussions over the past two years with companies like Hyland Software and Alfresco -- both major cloud computing players -- it has emerged that many enterprises are not quite ready to make the full jump to the cloud and are looking at hybrid computing as a stepping stone. Both agreed that hybrid computing is likely to be with us for at least 10 years in the private sector, which means that it will probably be around for a lot longer in the public sector.

The new data centers will have an isolated private network with 2000 GB per second of connectivity across 30,000 servers. This enables enterprises to  support:

  • Data: Enables federal agencies mine data while ensuring the data is kept private and secure
  • Open Integration: Combine existing and new services with existing data for new insights
  • Control: Help clients decide, manage and secure where their data and apps reside

IBM is also building a dedicated Security Operations Center for the new data centers to provide government clients with added security, availability and incident response capabilities.

The new data centers are part of a wider IBM investment in cloud computing and data centers which it announced earlier this year. At that time, IBM committed to investing $1.2 billion in global cloud operations that will result in 40 data centers across five continents and double SoftLayer’s capacity by the end of this year. 

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