IBM Forms Joint Cloud Services Venture with Vodafone

IBM announced today it had created a joint venture with Vodafone under which IBM will be primarily responsible for delivering IT services to clients of the telecommunications carrier.

Under the terms of the agreement, IBM beginning in the first half of this year will provide managed services to Vodafone Business’ cloud and hosting unit as part of an eight-year engagement valued at approximately $550 million.

As cloud computing continues to evolve the telecommunications provider decided to rely more on external expertise to service the needs of its existing enterprise customers, says Bill Lambertson, director of cloud industry solutions for the telco industry at IBM.

A big part of the reason Vodafone decided to partner with IBM is that IBM has demonstrated an ability to not only support multiple cloud computing environments, it is also working to unify the management of various cloud computing environments under a common platform, says Lambertson.

“Enterprise customers are making it clear they don’t want to be locked into a single cloud platform,” says Lambertson.

Other factors that also played a role in the decision was the investments IBM has made in artificial intelligence (AI) platforms such as Watson as well as IBM’s pending move to acquire Red Hat, says Lambertson.

Finally, as a telecommunications provider operating primarily in Europe Vodafone shares IBM commitment to privacy laws such as the General Data Protection Rule (GDPR), adds Lambertson.

As part of the agreement, some Vodaphone employees in the United Kingdom, India, Germany, and Romania will become IBM employees. Vodafone.

Vodafone, meanwhile, will continue to invest in next-generation 5G wireless networks that it will own and operate, while the joint venture builds and support cloud applications that will take advantage of both 5G networks in the future and existing 4G wireless services.

It will be interesting to see what degree other carriers will follow Vodafone’s lead by partnering with IT services providers for cloud expertise as part of an effort to focus more of their resources on next-generation networks. Given the level of investment required to build those networks, chances are good more such partnerships are in the offing.