IBM Data Center Czar: Enterprises Adjust to ‘Big Data’ Needs

Large enterprises that see the perils of forthcoming Big Data are planning ahead by upgrading their computer centers now, a senior VP of IBM (NYSE: IBM) said.

That's good news for IBM, the No. 2 computer services provider, said Steve Sams, VP for site and facilities for the Armonk, N.Y. company.

It also fits with new market research from International Data Corp. that flow of information by all means as Big Data will skyrocket to $16.9 billion by 2015 from only $3.2 billion in 2010, a compound growth rate of 40 percent, 7 times the growth rate of traditional communications.

Sams, who oversees IBM's global computer centers and last month turned over a giant new center in India to Tulip Telecom (NSE: TULIP), said the move is good for IBM and its rivals. To prepare, the computer giant surveyed end-users and found, in essence, that those who planned ahead were planning to invest more on advanced services.

Enterprises that considered themselves very efficient spent 50 percent more on new services, software and services than those who didn't. Information technology (IT) managers who planned ahead had 10-year plans that accounted for growth, Sams said.

Least Efficient Pay More Maintenance

By contrast, IT managers who regarded their companies as being among the least efficient spent 65 percent of the budgets just to maintain aging systems, rather than invest on new products, he said.

The more-efficient managers had also invested more in new technologies such as virtualization, or using software to permit running the same applications on different servers across a network, Sams said.

Again, IT managers who'd rated their enterprises as low efficiency hadn't implemented virtualization, Sams said.

The IDC study published this month estimated storage capacity may be the single largest growth sector of the shift to Big Data. IBM is already among the world's biggest storage and services providers, competing against rivals such as Hewlett-Packard (NYSE: HPQ), EMC (NYSE: EMC), Oracle (Nasdaq: ORCL) and Computer Sciences Corp. (NYSE: CSC).

The top companies have environments that are flexible, said Sams. They are the ones now more able to add new data requirements as employees use smartphones and tablets to access and transmit company data.

Sams said IBM clients such as transport implements maker Deere & Co. (NYSE: DE) and the National Football League are among the more advanced customers. He declined to cite the laggards.

IBM shares rose 73 cents to $204.98 in late Wednesday trading, not much below their record high of $207.52 set last Friday. Shares have gained 11.5 percent in 2012 and 30 percent in the past 52 weeks.