- IBM announced Wednesday the wide release of its financial services-focused cloud offering.
- More than 90 software companies are working with the tech giant’s cloud offering.
- Howard Boville, head of IBM’s hybrid cloud, discussed the opportunity for the tech on Wall Street.
- See more stories on Insider’s business page.
IBM’s cloud is ready for primetime.
The tech giant’s cloud offering announced a wide release of its IBM Cloud for Financial Services on Wednesday. Built for banks and other financial institutions, the IBM Cloud has standardized compliance, security, and confidential computing tools alongside more traditional cloud tech.
It also puts the tech giant in position to capitalize on what Howard Boville, the head of IBM’s hybrid cloud, previously told Insider was a $1 trillion market for cloud adoption within enterprise-sized firms.
Now, IBM’s “really moving at a much quicker pace in terms of meeting the specific needs of the marketplaces that we’re facing into,” Boville recently told Insider.
And while building out the foundation of a cloud offering is one step in the battle to compete with the likes of Amazon Web Services, Microsoft Azure, and Google Cloud, that’s only half the battle. It’s the tools built around the cloud that really set it apart, Boville said.
“There’s no real inherent competitive advantage of building a cloud architecture. Twelve years ago that was the case, but no longer anymore. It’s the enrichment that you provide to that,” he continued.
That’s why IBM has nabbed more than 90 partners to work with its cloud service, including one big name also announced Wednesday: Salesforce. Other collaborators include Adobe, Infosys, and VMware, among others.
It’s the latest step in a project that IBM began in 2019 and has only accelerated under the new leadership of Arvind Krishna, who became CEO of IBM last April, and Boville, who also joined the firm a year ago after serving as Bank of America’s chief technology officer.
IBM’s first major partnership was with Bank of America, but the company has since expanded into other markets and established new relationships in finance, including BNP Paribas (the second-largest lender in Europe), Japanese giant MUFG, and Blackstone-owned Luminor Bank.
Cloud adoption across large and small financial firms
Boville said that IBM’s approach to cloud adoption within financial services globally has been, in part, driven by geography — chiefly because of the local nature of compliance and regulations governing the usage of data.
To that end, the partnership announced last July between IBM and BNP Paribas represents an inroad into financial services in Europe.
IBM refers to BNP as an “anchor partner,” or a major firm whose adoption of IBM cloud tech will drive others in the space to do the same. To date, BNP has migrated more than 40 line-of-business applications to IBM’s cloud.
But Boville also said that IBM sees an opportunity in bringing the cloud to regional and community banks as well. A key aspect of its standardized cloud tech allows smaller competitors to drop IBM’s security and compliance protocols into their own architecture.
In the US, especially, the historically-fragmented banking market has seen smaller banks explore ways to upgrade their front-end, digital tech in the midst of the COVID-19 pandemic.
Currently, companies have to work to “build these controls into the cloud provider that you’re working with,” Boville said.
“And that’s okay for the largest banks, with these very big chief information security officer functions and these big, large CIO functions, but it’s not helpful for the regionals and for the community banks,” he added.
One accelerant of this approach has been a recently-launched offering at IBM called Satellite, a distributed cloud model that lets customers integrate IBM’s cloud with that of other service providers or on-premise data centers.
As part of Wednesday’s announcement, IBM also said that it will begin supporting cloud collaboration with financial firms via the open-source development offering Red Hat OpenShift. Red Hat is a key lynchpin in IBM’s hybrid-cloud strategy after the tech powerhouse acquired it in a $34 billion deal in 2019.
IBM sees an opportunity to work within crypto
Boville also said that the landscape of financial institutions encompasses more than just banks.
A critical component of IBM’s cloud development to date has been focused on confidential computing, and Boville said IBM has seen “a massive uptick” in interest from companies working within a growing subset of finance: digital assets.
This January, IBM announced a new partnership with DIA, an open-source, decentralized smart contract and financial data system based in Switzerland.
And in March, IBM also announced a collaboration with Metaco, a digital asset-infrastructure company, that will see IBM’s hybrid-cloud underpin Metaco’s crypto-custody and trading products.
“Protecting digital currency is clearly front and foremost for those companies. And we’ve had well over a score of companies that have defected from other cloud providers to our platform because of the confidential compute capability that we have,” Boville said.
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