IBM fleshes out edge strategy with Cloud Satellite and Power Private Cloud Rack

IBM fleshes out edge strategy with Cloud Satellite and Power Private Cloud Rack

By Daniel Beazer, Contributing Analyst at Structure Research.

With some fanfare, IBM has put its riposte to AWS, Microsoft and Google’s multi-cloud, on-off premise offerings into general availability. With Cloud Satellite and Power Private Cloud Rack, IBM’s edge and cloud strategy continues to evolve with one highly publicized product announcement and another less heralded but just as critical to Big Blue’s chances of success at the edge.

About Cloud Satellite

As is the case with Outposts, Anthos and Microsoft’s products, Satellite is a managed Kubernetes service that allows IBM’s customers to run workloads off-premise, on other public clouds, and at the edge. Lumen (formerly CenturyLink) is using the platform to deliver edge computing services. At the analyst briefing for the launch, IBM was asked how it saw Cloud Satellite versus the competition, and it identified the richness of its catalog (Cloud Paks), security and compliance, and the open-source origins of OpenShift versus the proprietary nature of Amazon, Microsoft and Google’s cloud platforms.


IBM’s share of the cloud market remains stubbornly small but IBM has rightly identified two strengths that are not to be underestimated. Firstly, Red Hat OpenShift, its OpenStack-based hybrid cloud manager, has been partially successful with over a thousand customers; it is the dominant player in its market along with VMware Cloud Foundation. Secondly, IBM feels it has a head start in confidential computing. Confidential computing uses encryption that can only be unlocked via keys the client holds, meaning cloud providers have no access to the data in any shape or form. Rather than encrypted at rest or in transit, data is encrypted in use. IBM has been investing heavily in this area for a decade and the offerings here are some way ahead of the hyperscalers, especially when it comes to the larger corporates such as banks. IBM sees only about 4% of workloads across its customer base running in the cloud and compliance and security remains a roadblock for many of them, and it is hoping confidential computing services like its Cloud Hyper Protect can unlock that remaining 96%.

Private cloud strategy

IBM likes to talk about its security and OpenShift opportunities, but Power Private Cloud Rack is another part of its strategy that remains mostly under the radar. IBM still earns much of its profits from its mainframe and other legacy business, but it has struggled to gain a foothold in the application modernization market in the way that, say, VMware has. IBM hopes OpenShift will be the game changer here, and it has just launched a Power Private Cloud Rack Solution which gives IBM’s many Power Server customers the ability to migrate to cloud-native. IBM’s Power servers run on IBMs’ UNIX variant, AIX, and are something of an enterprise workhorse, generating billions of dollars in revenue for IBM every year.

Still, IBM knows that it needs to have an answer to those who want to modernize their applications and move to a container-based platform. Hence, Private Rack contains three Power servers, a storage enclosure and it runs OpenShift Container Platform on Red Hat Enterprise Linux 8.

Analyst take

Power Private Cloud Rack is an interesting product, well-differentiated against Outposts and Anthos. It could well be attractive to enterprises in a way that running Apache Web Servers on IBM Cloud was not, especially when coupled with the kind of advanced security tools that IBM’s banking and other highly regulated enterprise customers need.

About the author

Daniel Beazer is a contributing analyst at Structure Research, an independent research firm focused on the cloud, hosting and data center infrastructure service provider markets.

DISCLAIMER: The views expressed in this contributed post are that of the author, and don’t necessarily reflect the views of Contact us if you want to contribute a guest post.

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