IBM Brags About Its Cloud Prowess Thanks To SoftLayer

November 11, 2013 Timothy Prickett Morgan

IBM is ratcheting up the marketing machine after having lost out in a contentious bidding war with Amazon Web Services for a $600 million contract to build a private cloud for the US Central Intelligence Agency. To get a different story out there, Big Blue is now citing the data of a third party hosting counter to claim that the IBM Cloud, which means the SoftLayer cloud it bought earlier this year for an estimated $2 billion.

Citing data compiled by HostCabi, IBM is saying that it has over 270,000 Web sites hosted, ranking it second in the world behind GoDaddy and ranked well ahead of Amazon. HostCabi reckons IBM now has a 5.7 percent share of the hosted sites worldwide, and IBM is saying in its marketing campaign that it has 270,000 more Web sites more than Amazon, which has a 1.2 percent share. If you do the math, than the HostCabi universe is 6 million Web sites.

GoDaddy has a 7 percent share of the Hostcabi data, or somewhere around 420,000 sites. But GoDaddy is not a cloud provider in any strict sense. Rackspace Hosting, which like IBM and Amazon actually operates a compute cloud and is not just a hoster, ranked seventh according to HostCabi, and its 1.6 percent gives it around 96,000 sites. Amazon ranked ninth on the Web domain rankings, with a 1.2 percent share and 72,000 sites.

This marketing campaign by IBM is mixing up the idea of cloud computing and hosting just a bit. And Web sites are not customers. As far as I know, Amazon Web Services has hundreds of thousands of customers–many of them developers, to be sure–and is probably on track to break through $2 billion in revenues this year. SoftLayer had around 21,000 customers when IBM bought it in June and an annual run rate of $340 million in revenues.

I think that these numbers matter a whole lot more than the ones IBM is citing. And I also think that if IBM wanted to really shake things up, it should have bought Rackspace as well as SoftLayer.