IBM opens data centre in Melbourne to capture cloud demand

IBM is betting on the insatiable demand from Australian businesses for cloud infrastructure, opening a data centre in Melbourne as part of a $1.2 billion global bid to turn its fortunes around.

Following its $US2 billion ($2.15 billion) acquisition of cloud-hosting company SoftLayer in July 2013, IBM is opening two local data centres incorporating SoftLayer’s infrastructure.

The data centres, the first of which opens next month, will offer SoftLayer’s full portfolio of cloud services, and will hold more than 15,000 physical servers at full capacity.

“Australia is one of the places in the world where we see the most progress [in cloud adoption],” IBM Australia and New Zealand general manager Jeff Rhoda said at the launch.

“Cloud, analytics, mobile and social in particular are where we see almost all the growth in the IT industry, and that’s not the data centre part of IT, but the line of business spending around IT.”

The move comes after IBM Australia reported a $118 million fall in profit in the 2013 calendar year.

It was also reported that more than 1000 local jobs had been cut as part of the company’s shift towards the cloud.

The Melbourne data centre will provide local residency for data, providing a secure and easily integrated platform for security-conscious businesses such as finance and healthcare.

Since its launch in 2005 SoftLayer has become one of the world’s largest cloud providers, playing host to start-ups-turned-global leaders including Netflix, HotelsCombined and Whatsapp.

SoftLayer chief executive Lance Crosby said Australia was an obvious choice for extending the company’s “global backbone”, as the country represented 5 per cent of SoftLayer’s revenue.

He said IBM’s reputation and scope have given SoftLayer the ability to invest in Australia, for which they had previously lacked capital.

The Melbourne data centre is one of 15 being built by the IBM and SoftLayer partnership, adding to SoftLayer’s 13 established centres and IBM’s 12.

But Mr Crosby denied reports that the Victorian government had provided a significant incentive to lure the data centre to be built in Melbourne ahead of Sydney.

“It basically came down to the construction schedule. It broke ground at almost exactly the same time and this one just happens to finish 60 days prior to Sydney,” he said.

The Sydney data centre is scheduled to open later this year.


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