Sunday, 8 September 2013

IBM Strikes Gold with $1 Billion Cloud Computing Deal

Few companies have been able to strike as huge a contract as IBM just did with the Department of the Interior. With a $1 billion ten-year contract, IBM has agreed to assist in the transition of the department's networks to a cloud computing infrastructure. IBM, along with nine other companies, was selected to assist with this tremendous endeavor. Drawing on the success of IBM's data storage practices, the strength of its database solutions, its ability to host websites, and many other factors, the Department of the Interior is hoping that this contract will help them with cost-saving measures while providing a secure solution for its ever-growing network of computers and devices.

IBM has a long history of providing technological and networking solutions for federal and state government contracts. With their recent success in the emergence of the cloud computing market, IBM has been at the forefront of development of new services and security in cloud computing. As a result, investors and agencies are all flocking to IBM to assist in the transition from traditional networks to more versatile and secure cloud-based solutions.

The $1 billion contract over ten years is only part of the Department of the Interior’s massive IT budget, which allocates nearly $1 billion a year for the department’s IT needs. With sixteen agencies reporting to the department that manage everything from national parks to relationships with Native American tribes, the department has a wide array of needs. Due to IBM's diverse offerings and portfolio of cloud-based solutions, the transition to the cloud is expected to save the department a tremendous amount of money as it hopes to close hundreds of data centers across the country.

In addition to the Department of the Interior, the agreement with IBM states that other departments may further utilize cloud-based solutions down the road. IBM and the other contractors hope that this contract is only one of many to come as the government seeks to cut down on its expenses and transition its services to the cloud.

So what does this mean for IBM? As this is the company's largest cloud-based contract with US government to date, IBM will continue to expand its portfolio of cloud-based solutions. In addition, IBM, along with all of the other companies included in the contract, will gain a competitive advantage in the highly competitive cloud services market. As technology analysts have seen in recent months, any edge in this market will give companies the potential for huge profits as the industry continues to balloon.

Industry analysts have predicted that the growth of the cloud computing industry has only just started. With large contracts like this one from the Department of the Interior, cloud-based service providers are expecting to see profits and contracts come streaming in during the next few years. The transition from local networks to cloud-based services on a web host will need to be performed by companies with experience. Few companies have as much experience in a wide variety of industries as IBM. This contract could only be the tip of the iceberg in potential profits for one of the oldest computing companies in the world.
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