Microsoft woos Y Combinator startups with big Azure credits

Microsoft wants to boost its cloud’s profile among startups so it’s making $500,000 in Azure credits available to Y Combinator-backed companies.

The credits start rolling with the Winter 2015 class and will continue after that, according to this Y Combinator blog post. This can be a good number of companies — there were 106 companies in the Spring and Winter 2014 classes, for example.

Cloud credits are ubiquitous — Y Combinator has special hosting offers from [company]Amazon[/company], [company]Google[/company], [company]Rackspace[/company] and now [company]Microsoft[/company], according to Y Combinator president Sam Altman. But, $500K is a big number. (Oh, and the startups will also get three years of Office 365 subscription, “access to Microsoft developer staff,” plus a year of CloudFlare and DataStax services.

Qualified startups can typically get $1,000 to $15,000 in Amazon Web Services (AWS) credits, and there are other freebies available. Then, in September, things started going a bit haywire. Google started offering $100,000 in Google Cloud Platform credits to qualified startups. Two months later [company]IBM[/company] upped the ante to  $120,000 in credit for SoftLayer infrastructure or BlueMix PaaS. Again all for “qualified” startups.

This is a strategic gambit for Microsoft, which wants to get more young companies — many of which are probably not Windows focused — to check out Azure. It’s also a way to chip away at [company]Amazon[/company] Web Services’ prodigious lead among startups. AWS is pretty much the default cloud selection for young companies.

This story was updated at 5:24 a.m. PST February 11 to reflect that AWS typically provides qualified startups with up to $15K in promotional funding.

IBM hits the $7B mark in cloud, but what does that mean?

IBM has pledged to deliver a $7 billion cloud business by 2015 for a couple of years — and now, according to its own numbers, it’s achieved that goal. On its fourth quarter 2014 earnings call, IBM CFO Martin Schroeter said — a couple of times actually — that this key strategic business grew 60 percent last year to hit that $7 billion goal.

But, that number is hazy. It is unclear how much of that business comes from older outsourcing deals that are being reconstituted as cloud business. On the other hand, nearly every vendor trots out nebulous numbers when it comes to cloud. As has been reported ad nauseam, [company]Amazon[/company] doesn’t break out the size of its AWS cloud business. There’s also been controversy over Microsoft’s cloud claims.

Having said that, a claim by one [company]IBM[/company] insider that this $7 billion figure makes [company]IBM[/company] the world’s largest cloud provider has to be taken with a big grain of salt. Over the past four quarters, the same category in which AWS resides logged $4.8 billion in sales, and I have to say the idea that IBM has a bigger cloud business than AWS begs disbelief probably everywhere except in IBM’s Armonk, New York headquarters.

Overall, IBM logged fourth-quarter earnings of $5.81 per share, down 11 percent from $6.13 for the year-ago period. Net income was off 13 percent to $24.11 billion from $27.70 billion for the same period. IBM shares, which initially soared to nearly $163 on the earnings news, then swooned as people dug through the numbers and IBM provided a disappointing outlook.
IBM Price Chart

But Schroeter noted that IBM is doing well in strategic “high value” segments: cloud, big data, social media and mobile.

IBM logged $25 billion in revenue from those combined segments, which he said now accounts for 27 percent of IBM’s total business. And, he noted that IBM’s “as a service” business (meaning IaaS, Paas and SaaS etc) is now purring along at a $3.5 billion run rate up from $2.2 billion last year.

In that segment its OpenStack-based Bluemix PaaS and SoftLayer cloud infrastructure businesses are key.

This story of doing well in high-value segments echoed what SAP CEO Bill McDermott, said earlier Tuesday: that SAP’s core (legacy) business is growing but that cloud is growing faster. The question for both these companies is whether growth in new businesses can make up for the dwindling of their bread-and-butter legacy stuff.

Speaking of SoftLayer, Lance Crosby, who retained his CEO title when SoftLayer was acquired by IBM two years ago for $2.2 billion, is now general manager of cloud innovation and business development at IBM. Meanwhile Robert LeBlanc, who joined IBM in 1981, is now the official cloud guy, aka SVP of Cloud  — so those hoping for an outsider perspective to guide IBM’s cloud may be disappointed.

Robert LeBlanc, SVP of IBM Cloud

Robert LeBlanc, SVP of IBM Cloud

IBM connects the dots between data, cloud and engagement

At this week’s IBM Insight conference in Las Vegas, IBM brought out the big guns to demonstrate their chops in the data analytics space. Insight is IBM’s conference dedicated to their solutions around data management and analytics. While there are some highlights, other areas are still evolving.

Setting the stage and connecting the dots

Things kicked off with IBM SVP of the Information and Analytics group, Bob Picciano, talking about the important interconnection between data, cloud and engagement.

  • Data is the ‘What’
  • Cloud is the ‘How’
  • Engagement is the ‘Why’

Bob’s messaging paints a good picture of how the technology and data play a central role to the ever-changing IT organization. Engagement is the key to business relationships with customers. The CIO and IT organization need to fully understand how they engage with customers today and how that will evolve over time. Where are the opportunities? How can IT help create deeper relationships with customers? Data and cloud will play a leading role.

Relationships comes in all sizes

The way companies connect with their customers will vary greatly. To that point, there are some core themes here at Insight that mirrors the varied ways. Two of the key areas are social engagement and mobile. Ironically, traffic at the mobile booth seems anemic compared with the social engagement area, which saw constant traffic. In order for IBM to truly capitalize on the changing marketplace mobile will need to take a stronger position.

Getting social, but still a ways to go

Social media plays a central role in customer engagement for many organizations. The impressive thing is that the #IBMInsight hashtag was trending high on Twitter’s list for much of the day. As a data geek, one is always thinking about the value of those metrics. Trending at the top of Twitter is pretty impressive until you start to look at the finer details.

Running data through Tweet Binder provides a bit of clarity (report). Almost 50% of tweeters used Twitter clients for iPhone, iPad or Android speaking to the importance of mobile in social media. Looking a bit further, 61% of tweeters only tweeted a single tweet while 77.51% of tweeters tweeted only one or two times. That is not a good showing for attendees that should be well versed on the impact of social media and demonstrates there is still a ways to go.

Building an ecosystem

Walking the expansive show floor, it is apparent that IBM has worked to build their ecosystem. There are plenty of vendors that provide complementary products based on IBM technology along with plenty of consulting shops too. The interesting point here is that there are not many larger technology companies other than IBM exhibiting. This could be a side effect to IBM’s wide portfolio of services and solutions and a feeling of competitiveness among vendors. Unfortunately, it does not represent the varied needs of the average enterprise customer.

Summary in a nutshell

Putting it all together, IBM is making good waves to support the enterprise around data and analytics. They have made a good start, but still have a ways to go. The solutions still have a traditional IBM ‘feel’ and with rare exceptions span into the newer territories. There was a showing of IBM’s BlueMix platform, but not too much beyond the large enterprise perspective. Even the cloud area competed with the size of the infrastructure areas.

The reality is that turning a company the size of IBM is hard. In addition to size, there are cultures that need adjustment too. But it seems IBM has started to make good strides in some specific areas with ostensibly more to come. It will be interesting to see how IBM addresses solutions going forward and starts to truly pull the different components (data, cloud, engagement) together.

IBM builds up its cloud with Netezza as a service and NoSQL as software

IBM announced a new, promising collection of cloud data services on Monday, adding to an already-impressive collections services on its Bluemix platform. At this point, though, IBM’s biggest challenge isn’t selling enterprise users on the cloud, but convincing them it’s still the best choice.

A fair take on IBM’s BlueMix

In his Weekly Update, Gigaom Research cloud curator David Linthicum has a fair perspective on last week’s BlueMix PaaS announcement from IBM.

The pre-release rollout, combined with a same-day announcement of IBM’s purchase of Cloudant, could be seen as IBM’s version of Mark Hurd’s claim for Oracle that, “We’re going to be the company there first with the best stuff,” as the lumbering industry giants stampede the cloud bandwagon.

But IBM’s offerings are clearly targeted at enterprise shops looking to ease the transition from traditional applications development and support to hybrid cloud, hybrid on-prem/cloud, and hybrid devops and open systems approaches.