IBM is closing SmartCloud Enterprise (SCE) and offering its customers free migration to newly acquired SoftLayer, a company spokesperson confirmed Thursday. Industry analyst Holger Mueller speculated that the migration will be the largest ever shift of cloud customers.
Analyst tweets reported the move Wednesday night, and cloud consultant CohesiveFT reportedly posted a letter from IBM to SCE customers on its blog, but the post has since been removed. The closure is expected to be completed by Jan. 31, 2014.
“IBM can confirm that clients using its public cloud platform will be transitioned to the SoftLayer (an IBM company) public cloud platform, providing clients with a higher performing public cloud solution with advanced functionality,” an IBM spokesperson told The Register.
IBM recently won a contract worth $1 billion to host the US Department of the Interior’s cloud, but lost a contract with the CIA to AWS. The CIA’s decision, which IBM appealed, was in part based on the inferior auto-scaling capabilities IBM was offering compared to AWS.
SmartCloud Enterprise+, IBM’s premium, managed cloud IaaS offering, will continue unchanged operation.
IBM recently released an earnings statement for Q3 which included $1 billion in cloud computing revenue. Earlier this year the SEC investigated how IBM reports revenue from its cloud business, but no complaint has resulted from the investigation.
SmartCloud Enterprise is the second significant cloud offering to be shuttered in 2013, after Nirvanix filed for bankruptcy protection in September. In that case, migration assistance was provided by IBM, who had a previous partnership with Nirvanix. This experience with mass cloud migration, plus the three month window, should allow SCE customers to smoothly transition from one platform to the other.
Competition for the over $2 billion per quarter cloud platform and infrastructure markets is fierce, and IBM is attempting to establish itself as the next service provider of choice after Amazon, ahead of Microsoft and Google.
SCE was introduced in 2012 to allow IBM to serve managed service providers and mid-sized businesses, but SoftLayer targets SMBs and has a superior reputation. Streamlining its cloud offerings allows IBM to shed an underperforming product while potentially cutting cost.