According to sources, Panasonic Corp. (PC) announced an agreement with International Business Machines Corp. (IBM) under which the latter will provide Panasonic with its Lotus web-based email service and new cloud software for calendars, file sharing, social networking and web meetings.
Management did not provide any comment on the deal and the financial terms were not disclosed. This deployment will be one of the largest cloud computing contracts to date. For IBM, this win is of immense importance, as the company will be able to expand its cloud computing offering in the Japanese market.
To grow its data center solutions and cloud computing initiative, IBM has built an Analytics Solution center, Business Resilience service delivery centers and cloud computing centers worldwide. IBM has approximately 13 cloud computing centers, the world’s largest network of expertise such as server capacity on demand, online data protection and Lotus e-mail and collaboration software on cloud computing. We expect these centers to help increase revenue, going forward.
Panasonic turned to IBM for its LotusLive to enhance its web-based email capabilities and integrate its business globally. Moreover, to reduce upfront costs (for both software and hardware) Panasonic plans to shift all of its 380,000 human resources to web-based mail service. The transition is expected to take place over the next few years.
Panasonic plans to substitute its in-house email systems that are built on Microsoft’s (MSFT) software and systems to IBM’s Lotus email systems. The company further plans to outsource its IT infrastructure business that will help diversify its business.
Although IBM is growing in the cloud computing space, it faces stiff competition from companies such as Salesforce.com (CRM), Microsoft, Google Inc. (GOOG), Amazon.com (AMZN) and Oracle (ORCL) who have already tasted success.
Gartner predicts cloud computing services including email service to grow 47% to $9.6 billion in 2010 and expects about 20% of the companies in the U.S. to spend on email service via web browsers in 2012. IBM has also been executing a strategy to accelerate the adoption of cloud computing to help drive the next cycle of growth and productivity for its clients.
Thus, most software firms are increasing their cloud computing efforts. Recently, Salesforce.com entered into a number of strategic alliances that are expected to enhance the cloud computing service and solutions offered by it. IBM signed a five-year deal to supply LotusLive iNotes to UTV Software, an India-based media and entertainment company.
Moreover, VMware (VMW) announced its decision to purchase Zimbra from Yahoo Inc. (YHOO) last week to enhance its cloud computing capabilities. Also recently, Hewlett-Packard (HPQ) and Microsoft announced a three-year partnership to integrate their software and hardware products and offer new services, based on advanced cloud computing.
We believe the growing initiatives in the cloud computing market are leading to increased collaboration and partnerships that will speed up application implementation, eliminate IT complexities and lower costs. We also believe that the intense competition will make execution difficult, which is something to watch out for.
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