Wounded IBM brings ad war with Amazon to India after losing $600 million contract - Times of India ~ Electronic Gadgets

BANGALORE: Big Blue, which recently lost a high-profile contract in the United States to Amazon, has thrown the first punch in India against its rival for cloud services deals. IBM, which earlier this month started a marketing campaign in the US targeting Amazon Web Services, is doing likewise in India with advertisements positioning itself as the bigger and better provider of cloud-computing services.

IBM's direct attacks come after it lost a $600-million (Rs 3,700 crore) Central Intelligence contract to Amazon. IBM lost again when it challenged CIA's decision in court, which ruled in favour of Amazon.

"After losing the federal contract, IBM is trying to win lost ground and build thought leadership globally," said, Sudhanshu Bhandari, senior analyst at Forrester Research. With estimated revenue of about $3 billion from cloud computing services, analysts consider online retailer Amazon as a clear market leader. However, with its recent $2-billion acquisition of SoftLayer Technologies, IBM is looking to catch up.

"Over the last few quarters, IBM has struggled and continued to see a drop in the revenue from traditional business. With SoftLayer, they are trying to take the public cloud story forward," Bhandari said. IBM enjoys a stronghold among large enterprises while small and mid-market customers have been Amazon's bastion.

As the market for cloud computing grows in India, IBM is looking to displace Amazon as the go-to company for renting computing services on a pay-as-you-go model. In the advertisements, IBM claimed to have 2.7 lakh more customers on its cloud platform than Amazon. Globally, its revenue from cloud-related revenues reached $1 billion last quarter-nearly $460 million from services, while the rest was from hardware to set up cloud-based infrastructure for customers.

Amazon did not reply to emailed queries from ET. However in a recent press briefing, Andy Jassy, head of Amazon Web Services, said that IBM was "jumping up and down" and "creating confusion among customers".

Vamsicharan Mudiam, IBM's country manager for cloud solutions in South Asia, said that the key differentiator for his company is their "higher value cloud, which is open and interoperable as well as reliable. IBM's SoftLayer performs up to 10 times faster than our competitors and offers hundreds of hardware configurations".

"I would not look at this tussle going on for long, because both have different strategies. While Amazon has been a public cloud major, offering computing space in a common infrastructure, IBM builds customised private cloud where companies host data within their premises. But they have grey areas, and Amazon is posing a big threat to IBM there," said Venu Reddy, research director at IDC India.

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