New venture from IBM, Vodafone Business to tap global multi-cloud connectivity market

London: IBM and Vodafone Business have signed a key commercial pact to set up a new venture focused on helping companies across Europe and elsewhere in the areas of multi-cloud, connectivity and digital transformation through new technologies and drive future innovation.

The new venture designed as a startup will be responsive to changing market needs and customer demands. It will provide clients with the open, flexible technologies they need to integrate multiple clouds and prepare for the next wave of digital transformation enabled by AI, 5G, edge and Software Defined Networking (SDN).

“To deliver multi-cloud strategies in the real world, enterprises need to invest at many levels, ranging from cloud connectivity to cloud governance and management. This new venture between Vodafone and IBM addresses the ‘full stack’ of real-world multi-cloud concerns with a powerful combination of capabilities that should enable customers to deliver multi-cloud strategies in all layers of their organizations,” said Carla Arend, Senior Program Director, European Software, IDC.

With over 70 percent of organisations today using up to 15 cloud environments to access new digital solutions and services, according to IBM Institute for Business Value, the interconnectivity of clouds and the vulnerability of data have become global issues.

“This is an era of unprecedented disruption with companies having to react fast to new competitors and business models as well to changing economic and political landscapes. Companies need choice, speed and flexibility. For this reason, the cloud market needs more diversity and more ventures like this,” said Roy Illsley, Distinguished Analyst Infrastructure Solutions – Ovum.

That’s where the new venture which is expected to be operational by first half of 2019, aims to help companies remove the complexity and barriers from their technology choices and ensure that data and applications flow freely and securely across their organizations.

IBM’s Red Hat buyout along with Vodafone’s new 5G technologies, according to IDC’s Arend have the potential to help enterprises to drive future innovation. “We estimate the global cloud market (hardware, software, services) to be worth $420 billion in 2019. If you add to that the global cloud connectivity market which is worth $2 billion, the combined market opportunity here is huge,” she added.

Under the pact, IBM will provide managed services to Vodafone Business’ cloud and hosting unit, in an eight-year engagement valued at approximately $550 million (€480 million). Customers will benefit from IBM’s optimisation, automation and cognitive capabilities which help them to run their business effectively in a cloud environment.

“IBM and Vodafone are getting ahead of the game and by coming together are striving to make it easier for businesses to use any cloud, any data, any workload in any location – this could open up huge possibilities for the enterprise,” added Ovum’s Illsley.

The new venture will co-develop new digital solutions, combining Vodafone’s strenghts in IoT, 5G and edge computing with IBM’s multi-cloud, industry expertise and professional services capabilities.

“IBM has built industry-leading hybrid cloud, AI and security capabilities underpinned by deep industry expertise,” said IBM Chairman, President & CEO Ginni Rometty. “Together, IBM and Vodafone will use the power of the hybrid cloud to securely integrate critical business applications, driving business innovation – from agriculture to next-generation retail.”

“Vodafone has successfully established its cloud business to help our customers succeed in a digital world,” said Vodafone CEO Nick Read. “This strategic venture with IBM allows us to focus on our strengths in fixed and mobile technologies, whilst leveraging IBM’s expertise in multicloud, AI and services.”

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