IBM whistleblower calls cloud washing into question

As reported by Doug Henschen over at InformationWeek,  “IBM’s cloud computing revenues are smaller and less “cloud-intensive” than customers and Wall Street analysts might think. That’s the claim of a former IBM employee who backed up more than a few of his/her critical assessments of the vendor’s cloud prowess with a number of confidential internal documents shared with InformationWeek.”

IBM has to be a bit nervous over this news, considering that the SEC launched an investigation into IBM’s accounting practices around what’s a cloud solution, and what’s not.  Indeed, this could be something that sets the tone with how companies account for revenue, and can perhaps stop them from pushing everything and anything into the cloud computing category when it’s clearly not.

“The documents put IBM’s 2012 cloud-related revenue at $2.26 billion, a figure the company has declined to disclose publicly. In 2011, IBM did issue a roadmap that set forth the goal of reaching $7 billion in annual cloud revenue by 2015, so the much lower figure raises doubts about whether the company is on track.”

IBM Is not the only “cloud washer” out there.  Other large companies are moving to the cloud and claiming huge growth in cloud-based revenue.  It’s more likely that their numbers are much smaller when you consider what’s truly cloud computing technology or services.  However, the term “cloud computing” is still widely defined, thus I’m not sure they are breaking any laws by spinning their technology as ‘cloud.’

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David S. Linthicum

SVP Cloud Technology Partners

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