IBM has scored a notable victory in the cloud market after being selected ahead of Amazon Web Services (AWS) and Microsoft Azure by cloud software provider Workday for a seven-year contract.
IBM explained that Workday will use its service as the foundation for the company's "development and testing environment".
"This is quite a coup for IBM, not only because of the length of the cloud contract and Workday's status as a cloud pure play but because Workday chose it over AWS which it uses to run its production services," said TechMarketView analyst Angela Eager.
"Microsoft and Google would no doubt have welcomed high-calibre Workday with open arms too, but Workday may have felt IBM was more of a neutral partner given Microsoft's existing business applications and Google's move towards enterprise applications."
IBM's global cloud data centre presence includes nearly 50 facilities in 17 countries on six continents. The company delivers enterprise cloud services ranging from business intelligence tools and, in particular, its Watson artificial intelligence and analytics services, to blockchain and Internet of Things tools and services.
Significantly, perhaps, Workday intends to expand the use of IBM Cloud over time beyond development and testing. IBM already effectively resells and helps implement Workday services to clients via its Workday Consulting Services practice. The firm acquired Workday services partner Meteorix in 2015 to expand in this area of cloud computing.
IBM has also deployed Workday Human Capital Management internally to manage its own HR across the world for 370,000 staff.
Robert LeBlanc, senior vice president for IBM Cloud, described the deal as proof that IBM has a part to play in the cloud market.
"Leading enterprises like Workday continue to turn to IBM Cloud for its global reach, flexibility and resiliency. Through a preferred cloud partnership with IBM, Workday can accelerate its innovation efforts to better serve clients around the world," he said.
Workday now claims annual revenues of $1.16bn, while its suite of software encompasses all the services in which PeopleSoft used to specialise, i.e. HR, payroll and financial management.
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