IBM share price up, expands international cloud network

IBM announced a plan to increase its data center numbers across the world in order to better compete with other technology companies for a share in the fast-growing demand for online services.

IBM said on Wednesday it had reached a deal with Equinix, provider of carrier-neutral data centers, to boost its international network by nine more cloud facilities in France, Japan, the Netherlands, Singapore, Australia and the US.

Currently IBM has 49 data centers around the world, four times more than a year and a half ago.

“We have had a really good year. We would call it a breakthrough year in cloud,” Angel Luiz Diaz, vice president in charge of IBMs cloud computing business, told Reuters.

In its October report, IBM posted more than a 50% cloud-revenue increase for the first nine months of the year. Despite being IBMs fastest developing business, it still accounts for a tiny part of the companys overall revenue, which declined 4% for the reported period.

The expansion was also prompted by strict laws in many countries that require sensitive information to be stored locally, and the increased performance that IBM would get by having data centers closer to customers.

IBM will also build its own data centers in Japan, Mexico and Germany, one in each country. Germany, with its iron privacy laws, has attracted interest from other technology companies as well. Last month Amazon opened a cloud computing facility in Frankfurt, marking its 11th worldwide data center.

The increased demand for internet services has spurred severe rivalry between technology giants, including IBM, Microsoft and Google, for dominance over the digital market, with each company creating additional information-processing facilities.

“There is a massive race to build liquidity,” said Rick Villars, an analyst at IDC, cited by the Wall Street journal. “They are saying, we are going to be the Federal Reserves for data.”

On its path to increase its cloud capacity IBM has struck a mixture of team-up deals with other technology companies, such as Tencent, Intel, SAP and Microsoft. Those partnerships allow IBMs cloud network to co-operate with other major business systems, providing more options for its customers.

IBM lost 1.08% on Tuesday, but edged up 0.34% on Wednesday and closed at $151.93 in New York, marking a one-year decrease of 13.56%. The company is valued at $150.36 billion. On Thursday per-share price climbed 1.32% to $153.94 in pre-market trading at 14:05 GMT. According to CNN Money, the 23 analysts offering 12-month price forecasts for IBM have a median target of $171.00, with a high estimate of $198.00 and a low estimate of $125.00. The median estimate represents a 12.55% increase from the last price of $151.93.