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Digital Transformation

IBM, Microsoft to Let Each Other Use More Software in The Cloud

Interesting news came today. Two software behemoths and sometime fierce competitors have decided that co-opetition may be the best model. IBM and Microsoft today announced a partnership making it easier for cloud customers to access each other’s software.

The News

IBM cloud users will be able to get Microsoft products like Windows Server and SQL Server, while customers of Microsoft’s Azure service can use IBM’s WebSphere Liberty and DB2, the companies said today in a statement. Clients will be able to cut costs by using software licenses they already own on each company’s cloud.

Cloud computing is transforming the technology industry by letting companies rent processing power and data storage over the Internet instead of buying and maintaining their own hardware. The shift is pitting the giants of corporate computing, like IBM and Microsoft, against relative newcomers like Inc. and Google Inc.

My Take

While the IBM and Microsoft news is new, the partnership approach among legacy software vendors is not new. (See Oracle, Salesforce, Microsoft news) The article correctly states the pressure being put upon both Microsoft and IBM by the likes of Amazon and Google.  Yes, Microsoft has poured billions into a strong Office 365 SaaS offering and in Azure. Yes, Azure is worth more than a billion dollars to Microsoft right now. IBM bought Softlayer which is known for being an easy to use and manage IaaS / PaaS play. IBM is also in the process of putting every piece of software they own on Softlayer. If there’s a cloud play  at IBM, it’s going on Softlayer.

However, both Microsoft and IBM have a problem. What do you do when a client says they have Java apps on Linux or some .net apps on C#?  What do you do when SQL Server or DB2 is involved? Well, you could order up another cloud service that supports either of those options or you partner with your sometimes nemesis to put together a more comprehensive offering. Obviously Microsoft and IBM have chosen the latter.

Here’s another value.  IBM excels in the middleware layer with MQ, WebSphere ESB, PureApp and WebSphere Liberty.  Microsoft excels with firewall, virtualization (Hyper-V), and SQL Server. With both companies now supporting these tools on their respective cloud platforms, you open up a lot options when it comes to building true enterprise solutions. It makes both companies more competitive.

Overall, this can only be good for both because most times the competition isn’t IBM or Microsoft or Oracle for that matter.  It’s Amazon and Google. So it makes sense to do this. I only question how much of a difference this will make. In a world where these large software companies talk about a billion or multiple billions of dollars in revenue from cloud platforms, will this pump up the revenue enough to make a difference?  I don’t know the answer, although I welcome any and all thoughts on the subject.

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Michael Porter

Mike Porter leads the Strategic Advisors team for Perficient. He has more than 21 years of experience helping organizations with technology and digital transformation, specifically around solving business problems related to CRM and data.

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