IBM and Vodafone form venture for cloud and connectivity

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IBM and Vodafone Business say it will speed adoption of cloud technologies and business applications enabled by 5G, edge computing and software-defined networking (SDN).

As part of the agreement, IBM will provide managed services to Vodafone Business' cloud and hosting unit, in an eight-year engagement valued at $550 million (€480 million). Customers will have access to IBM's optimisation, automation and cognitive capabilities to help them to run their business effectively in a cloud environment.

IBM and Vodafone will also co-develop new digital solutions using technologies such as IoT, 5G, edge computing and SDN.

This deal is hard on the heels of IBM agreeing to pay $34 billion (€29.85) for Red Hat at the end of October. One of the largest technology takeovers in history, it was motivated by IBM’s desire to become the world’s biggest cloud provider. IBM’s hybrid cloud business was worth $19 billion at the time.

Simplifying cloud

Research from IBM suggests that 70% of organisations use up to 15 cloud environments to access digital services. This means the interconnectivity of clouds and the vulnerability of data have become global issues. IBM and Vodafone Business say their new partnership will make it easier for their customers to choose the right technologies by removing complexity, and ensuring data and applications flow freely and securely across their organisations.

"Vodafone has successfully established its cloud business to help our customers succeed in a digital world," said Vodafone’s new 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 multi-cloud, AI and services. Through this new venture we'll accelerate our growth and deepen engagement with our customers while driving radical simplification and efficiency in our business."

"IBM has built industry-leading hybrid cloud, AI and security capabilities underpinned by deep industry expertise," said IBM Chairman, President and 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.

Remote benefits

The partners say their work will benefit those in remote locations too. For example, edge computing and IoT technologies from Vodafone and AI and augmented reality applications from IBM could help oil rig engineers pinpoint and resolve faults on equipment in minutes rather than hours – potentially saving millions in lost productivity. Previously, tapping technology such as this would have been a challenge due to lack of connectivity and disparate IT systems.

The new venture will be operational in the first half of 2019.