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December 4, 2015

IBM’s SoftLayer set $1bn cloud revenue goal in 2016

News: Public cloud unit would be required to increase revenue by around $200 million.

By James Nunns

A $1bn revenue target has been set for IBM’s public cloud unit, SoftLayer, to reach in 2016.

The target would require a revenue increase of around $200-$300 million; based on the revenue the cloud business is expected to take this year, according to analysts.

Big Blue’s combined private and public cloud revenue reached $9.4 billion in the last 12 months, while in 2014 it was around $7bn. The company does not break down revenue into its individual cloud units.

Katy Ring, 451 research director, told CBR: "$1bn is quite agreessive. They will be hoping it will come from their huge IT services business, to burst from that onto SoftLayer rather than AWS."

The company has been progressively expanding into potentially large markets such as China, with Bluemix Local made available across the country.

In November, AWS was reported to expect revenue to surpass $7bn a year for its cloud services, suggesting that the $1bn target revenue cited by a Bloomberg source, has a long way to go till it matches AWS in public cloud.

Acquired for $2 billion in 2013, SoftLayer was purchased to boost its public cloud offerings to compete with the likes of AWS and Microsoft Azure. In 2014 IBM said it would spend $1.2 billion to build 15 additional data centres.

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