IBM to spend $1.2 billion to expand cloud services

Reuters
The IBM logo is seen outside the company's offices in Petah Tikva
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The IBM logo is seen outside the company's offices in Petah Tikva, near Tel Aviv October 24, 2011. REUTERS/Nir Elias

(Reuters) - IBM Corp said it will invest more than $1.2 billion to build up to 15 new data centers across five continents to expand its cloud services and reach new clients and markets.

The new cloud centers will be in Washington D.C., Mexico City, Dallas, China, Hong Kong, London, Japan, India and Canada, with plans to expand in the Middle East and Africa in 2015.

IBM said the investment will bring up its data center count to 40 this year and double cloud capacity for SoftLayer, which leases online storage space to companies and was acquired by IBM last year for $2 billion.

"This global expansion is aimed at accelerating into new markets based on growing client demand for high-value cloud," the company said in a statement.

IBM said the global cloud market is estimated to grow to $200 billion by 2020.

More companies are opting for cloud computing, which lets them rent computing power, storage and other services from data centers shared with other customers, which is typically cheaper and more flexible than maintaining their own.

IBM also said it will use web hosting technology from SoftLayer for the delivery of its cloud services.

IBM said since its acquisition of Dallas-based SoftLayer, the business has added 2,400 new clients.

(Reporting by Sruthi Ramakrishnan in Bangalore and Nicola Leske in New York; Editing by Gopakumar Warrier)

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