NEW YORK (TheStreet) -- The Hartford (HIG - Get Report) has signed a $500 million, six-year cloud deal with IBM (IBM - Get Report) as the tech giant doubles down its efforts to tap into enterprise cloud dollars.
The Hartford, Conn.-based financial services firm will move to a private cloud infrastructure based on IBM's PureFlex System technology. Big Blue will also be providing mainframe, storage, backup and resiliency technology.
"The partnership with IBM will help The Hartford implement a strategic technology infrastructure that will provide us with greater agility and offer us more flexibility and transparency as we continue to grow our businesses," said Andy Napoli, The Hartford's president of consumer markets and enterprise business services, in a statement.
The two companies are also creating a joint innovation committee to build new business models for The Hartford.Unlike a public cloud, where services are made broadly available, to say, the general public, private clouds are operated for a specific organization's users. Tech research firm IDC estimates that the market for private cloud infrastructure will grow from $12.3 billion in 2012 to more than $22.2 billion in 2017. In her annual letter to shareholders last month, IBM CEO Ginni Rometty vowed to strengthen the tech giant's links to its vast enterprise customer base, which experts say will be critical as the company shifts focus onto more profitable areas. Specifically, the IBM chief promised to remake enterprise IT infrastructure for the cloud era. Since 2007, IBM has invested more than $7 billion in 17 cloud-related acquisitions. During its fiscal fourth quarter, IBM's cloud revenue came in at $4.4 billion, a year-over-year increase of 69%. The company's total revenue was $27.7 billion, down 5% compared to the prior year's quarter, or 3% adjusted for the effects of currency. Tech's heavyweights are jostling for pole position in an attempt to grab cloud dollars. Last month, for example, Cisco (CSCO) announced what it described as the "world's largest global intercloud," an open network of clouds hosted on global data centers run by the networker and its partners. Shares of IBM, which reports its fiscal first-quarter results after market close, dipped 0.22% to $196.59 in late morning trading. Analysts surveyed by Thomson Reuters are looking for revenue of $22.91 billion and earnings of $2.54 a share. -- Written by James Rogers in New York. Follow @jamesjrogers >Contact by Email.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts