The next chapter of cloud computing in Canada – IBM and Red Hat

October 28, 2018 was a big day for IBM. It was the day we announced our plans to acquire Red Hat, the world's leading provider of open source cloud software - the largest acquisition in IBM’s history. It also marks the beginning of a complete reset of the cloud computing landscape, positioning our company to be the world’s number one hybrid cloud provider in an emerging $1 trillion growth market.

But what does this mean for Canadian business?

The cloud is more than a place to store data

At IBM, we believe that enterprises will succeed or fail because of data. Not the data that is on the Internet, but the 80 percent of data that is not searchable that belongs to companies and institutions. It’s customer data, patient data, supply chain data, payments data, underwriting data, data from cars, planes, infrastructure and products of every type. This is a gold mine for companies, but many are ill-prepared to take advantage of it. That’s where the power of the cloud comes in.

Many think of cloud computing as storing and accessing data and programs over the Internet instead of a computer's hard drive. Most companies today are using cloud platforms to do just that, with a combination of public, private and on-premise capabilities, which means running cloud from between 5 and 16 cloud vendors.

In Canada, while cloud adoption has hit the mainstream, companies are at various stages of implementation. In fact, most companies here and outside of Canada are only 10-20 percent along their cloud journey, simply renting compute power to cut costs. They are using the cloud to store data instead of leveraging the full capacity of the cloud to integrate data from their existing system with other kinds of data in the cloud, analyzing it and turning it into something of value.

In addition, research shows that 80 percent of business workloads have yet to move to the cloud, held back by the closed, proprietary nature of the cloud market which makes moving data and services across clouds complex, expensive, and often a manual process of stitching clouds together. This is problematic for obvious reasons, not to mention the major security implications and inconsistent cloud management that come with this approach.

An open, hybrid approach to cloud – connecting the data dots

IBM and Red Hat will provide an open approach to cloud, with unprecedented security and portability across multiple clouds. Companies will be able to securely move all business applications to the cloud, connecting with other kinds of data and optimizing every part of the business.

For example, many companies want to understand and serve customers by combining data from their customer loyalty programs, inventory and supply chain systems with social media, weather and geo-location data coming from mobile devices. This is what the next chapter of the cloud is all about…it’s open, it’s hybrid and it’s about unlocking real business value by connecting the data dots.

Our client, Economical Insurance, one of Canada’s leading property and casualty insurance companies, knows the benefits of working in a hybrid cloud environment to accelerate the delivery of new digital experiences for brokers and customers.

As Kelley Irwin, SVP and Chief Information Officer, has shared, “A hybrid cloud environment is the best way to support our business with the speed and flexibility needed for our future success. The IBM Cloud helps us reduce development time, increase agility, and maintain security.”

IBM and Red Hat will be strongly positioned to accelerate hybrid multi-cloud adoption to more companies like Economical.

In a recent American Banker article, our client, Bruce Ross, group head for Technology & Operations at the Royal Bank of Canada, sums up this opportunity well:

“From a technology standpoint, this is a significant transaction that underscores IBM's commitment to open standards and the importance of a hybrid approach to cloud. From an industry point of view, the financial services sector will benefit. At RBC we're focused on rapidly delivering differentiated digital experiences to our clients. The ability to move quickly and deploy business critical applications between multiple cloud environments safely and securely is a game changer that helps us achieve our mission.”

IBM is building on the progress we’ve already made with our $19B hybrid cloud business and we’ve reshaped our portfolio for this moment. We’ve invested heavily in the emerging technologies that optimize business workflows in the cloud, such as artificial intelligence, blockchain, analytics and cybersecurity. This is a pivotal moment that will help our clients unlock the value of their data and deliver differentiated products and solutions for competitive advantage.