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Placing Smart Money on Nirvanix: IBM's OEM storage cloud bet and what it means for all of us

When the seventh most profitable company on the Fortune 500 makes a move the world is watching. And when it chooses to purchase or resell the technology of other companies despite spending many tens of billions of dollars on its own research and development efforts, you can bet it is with good reason.

Today IBM Global Services, a $37 billion dollar contributor to IBM's 9-figure top line, announced that it placed a 5 year bet on Nirvanix's cloud storage technology.[1] In Data Mobility Group's opinion the agreement cements Nirvanix's leadership role in cloud-based storage services while filling a critical gap that existed in IBM's SmartCloud for its enterprise clients.[2]

Until now, Data Mobility Group viewed IBM SmartCloud as a promising F1 team with the best chassis, most experienced drivers, most efficient pit crew and generous sponsors--running a second rate fuel system that threatened to undermine the entire operation. Ask the owners of any winning racing team and they will tell you that the highest performance engine is little more than an expensive oversized paperweight without a right-sized fuel system. Over the past couple of years and especially in the period following its leadership overhaul, Nirvanix proved that it could reliably fuel some of the world's most demanding petabyte-scale information powerplants such as those at NBC Universal (2+PB growing at a rate of 100-150TB/month) and Advocate Healthcare's (0.5PB).

It is worth nothing that Nirvanix's new management team changed the company on multiple fronts including posting consistent sequential growth; expanding beyond public clouds to encompass private and hybrid deployments; and forging this global OEM pact with IBM that should prove to be a material revenue accelerator for both companies.

Why should we care?

"The whole is different from the sum of its parts"—Wolfgang Kohler

Like chocolate and peanut butter, IBM and Nirvanix go well together. IBM had an immediate need for a proven enterprise-class cloud storage infrastructure which it could 100% trust to underpin its otherwise industrial strength cloud services. Nirvanix technology and infrastructure provides IBM-scale storage (i.e. petabyte plus) in a single, consistent, self-healing, geo-enforceable global namespace designed to maintain "one uncorrupted version of the truth." There are no file size limits as is often the case with today's cloud storage offerings. And Nirvanix's multi-tenancy, military grade security, self-provisioning and five nines service level agreements address common concerns about data accessibility and manageability in the cloud.

On the flip side, Nirvanix needed IBM's sales and support horsepower (and enormous portfolio of value-added development, deployment, information management and analytics services) to extend its reach to a global client base that might not otherwise know it exists or have the opportunity to leverage its cloud storage services. Together the two companies will provide what Data Mobility Group believes is the most complete set of enterprise-ready front- and back-end cloud services available anywhere today.

Vendors with at least one foot in the storage industry should be very concerned about their future cloud storage opportunities, especially the box vendors and the consumer cloud vendors in hot pursuit of enterprise accounts. The enterprise is no place for half-baked or woefully inadequate services or support. IBM placed its bet on Nirvanix as the best possible cloud storage backend for its customers with good reason and Data Mobility Group is in agreement. Combined, IBM and Nirvanix provide a set of enterprise-ready cloud services currently without equal in IT.

[1] IBM press release, October 12, 2011

[2] Why Nirvanix?

[DISCLOSURE]: Vendor Briefs are the unsolicited professional opinion of the analysts of Data Mobility Group. Companies featured in Vendor Briefs may include past or present DMG clients. Data Mobility Group maintains sole copyright and editorial control.

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