IBM Kills SmartCloud, Long Live SoftLayer IaaS Cloud

IBM is killing its SmartCloud platform and migrating cloud customers to SoftLayer, the recently acquired Infrastructure as a Service (IaaS) provider. It’s a smart move. Here’s why.

IBM is struggling in multiple markets at the moment. The company back in mid-Oct. 2013 announced weak server sales, and IBM missed concensus revenue estimates for the seventh consecutive quarter. At the same time, Big Blue said its cloud business was growing rapidly.

The reality check: IBM has a SmartCloud business that hasn’t really caught on with customers, and big rivals like Amazon Web Services and Microsoft Windows Azure appeared to have the upper hand. Still, Big Blue has a not-so-secret weapon: The recently acquired SoftLayer business.

Where IBM has stumbled, SoftLayer has thrived. The IaaS provider was the largest privately held cloud company before IBM purchased the business in mid-2013. SoftLayer is well-known for its rapid automation and onboarding process. Plus the company has a channel program with a seasoned partner team — led by SoftLayer Channel Chief Drew Jenkins.

Amid those market realities, IBM has notified customers their SmartCloud Enterprise accounts will be terminated Jan. 31 and they must move data and workloads to IBM’s SoftLayer unit by that date, according to InformationWeek. Gartner VP Lydia Leong tweeted the news after being briefed by IBM, InformationWeek reported.

The VAR Guy’s reaction:

The logical approach on item 2: Promote SoftLayer as the off-premises alternative to traditional x86 servers. And figure out if, at last, Lenovo is a serious buyer for that x86 business unit.