IBM, Microsoft Dive Deep Into Clouds

IBM/Microsoft cloud story updated with information on Dell's $1 billion cloud investment.

SAN FRANCISCO ( TheStreet) -- IBM ( IBM) ramped up its enterprise cloud efforts at a company event for CIOs Thursday, unveiling new products and teaming up with firms like Lockheed Martin ( LMT) and Citigroup ( C) to develop cloud standards.

Clouds are buzzing ... again. IBM's move comes a day after cloud rival Microsoft ( MSFT) announced a $12 million partnership with Toyota ( TM) that will use Windows Azure to develop in-car, digital information services for Toyota's hybrid and plug-in vehicles.

IBM talked about its SmartCloud refresh, intended to improve customers' ability to manage applications on public clouds. "We have added enhancements for the enterprise," Ric Telford, IBM's vice president of cloud services, told TheStreet. Users, he said, can now continually adjust the levels of security, privacy and availability for apps running in the cloud.

IBM claims that this could cut the time spent deploying applications from days to minutes, which is increasingly important as companies push more and more apps into the cloud.

IBM is also juicing its efforts around private clouds, which companies access via VPNs. The tech giant showed off its Workload Developer software, which deploys a cloud app to multiple physical servers simultaneously.

"Before, you would have had to configure and install the application on each server independently," said Telford. "That's a big, time-consuming step."

Given cloud computing's relative cloudy standing with a lot of tech, IBM is also focusing attention on the lack of available standards for the technology, and is forming a customer council to address concerns around cloud management, security, compliance and hybrid clouds. The group includes Lockheed Martin, Citigroup, ADP ( ADP) and insurance giant State Street ( STT).

Telford told TheStreet that IBM expects cloud to be become the "normal" method for delivering IT services by 2015. "We see this technology wave becoming mainstream now in enterprises," he said, adding that IBM has seen its users overcoming initial security concerns about the technology.

This is due, says IBM, to its efforts building network, application and data security into its cloud offerings, as well as ensuring tight security at its data centers running cloud services. Companies using IBM's cloud offerings include American Airlines ( AMR), 7-Eleven, and vehicle history company Carfax, said Telford. "When you see these names, it gives you a pretty good feeling that this is becoming mainstream," he added.

Whether or not that's true, the reality is that a number of corporate giants are finally deploying clouds in a big way. Microsoft recently announced enhancements for its Azure corporate cloud, which is being used by a host of companies to develop applications, including T-Mobile USA, Xerox ( XRX) and Pixar.

Dell ( DELL) also talked cloud details Thursday, announcing a $1 billion investment in new data centers and cloud services. The computer maker will also partner with Microsoft to help customers quickly deploy and manage private clouds.

Laura DiDio, principal analyst at ITIC, estimates that between 15% and 20% of businesses have either deployed a cloud or tested one. "Up to this point, I would say that about a third of companies are considering a cloud deployment," she said.

IBM, which sees cloudy investments as a way to boost its high-margin services business, has been one of the technology's most vociferous -- and early -- advocates. Big Blue launched its Blue Cloud strategy in 2007. IBM hopes that cloud deployment will also drive demand for the company's servers and software.

IBM CEO Sam Palmisano recently said that he expects his firm to generate $7 billion in cloud-related revenue by 2015.

At midday Thursday, IBM shares were dipping 18 cents to $163.86, Microsoft's were down 12 cents to $26.03 and Dell's were somewhat flat at $14.75. Tech stocks seemed to be following the broader market trend, which saw shares dropping on news of another earthquake in Japan.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.

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