Editor’s note: Analysis: Principal Analyst Allan Krans of Technology Business Research says IBM’s announced purchase last week of Blue Box clarifies Big Blue’s strategy for cloud computing with an emphasis on OpenStack.

HAMPTON, N.H. – Blue Box brings IBM’s cloud focus back to the core: Private infrastructure

IBM (NYSE: IBM) spent the better part of five years navigating a course to get to the market position it wanted in cloud. IBM’s focus in all markets is on premium offerings that provide significant value for customers, typically in exchange for relatively high prices and associated margin. In the cloud market, IBM’s focus is the same, but the route to achieve a “premium” position in the market has been less direct. The route to arrive at its intended cloud position has been more of a meandering journey through a deep dive into low-margin public cloud, business applications and corporate reorganization. All those investments and approaches are necessary for IBM to have enough relevance, breadth and credibility for “permission to play” in the higher-value services it wants to provide.

Now, after navigating that twisting path in the cloud space, the purchase of Blue Box reinforces the core of IBM’s cloud value proposition. Blue Box unabashedly focuses only on private-hosted and on-premises cloud environments, providing a range of management options to help customers implement OpenStack cloud environments.

Though IBM Cloud Service GM Jim Comfort mentioned public cloud could be in the future road map, the Blue Box solution is not currently aimed at public cloud. Not only is Blue Box not designed to manage IBM SoftLayer public cloud environments, it does not manage any public cloud services. Also, a prominent feature of Blue Box’s offerings is the management of the cloud environments, whether delivered from Blue Box or customer data centers.

Though customers have the choice of either a co-managed or fully managed model, support and management of OpenStack cloud environments is at the heart of the Blue Box value proposition. The current customer and revenue base for Blue Box may not be large, but given its focus on higher-value cloud offerings, it is a good fit with the core market position IBM has strived to attain in cloud.

IBM can now directly address the skills gap holding back OpenStack adoption

The promise of OpenStack may still hold tremendous value, but the realization is taking time to gain momentum. For IBM, the Blue Box purchase enables it to help customers and partners overcome very real barriers implementing OpenStack cloud environments. The interesting dynamic we report in our Cloud Customer Research is that while OpenStack is influencing cloud purchase decisions, the skills gap to implement OpenStack looms large. Cloud in general is a shift that is difficult for customers to make, and the lack of support and best practices for OpenStack makes it all the more difficult. Not only do most customers not have OpenStack expertise today, but they are also not looking to make the significant training investments needed to handle all tasks on their own. This is where co-managed and fully managed models for Blue Box align quite well, provide the support for enterprise customers and service provider partners to shift to OpenStack without significant hiring or training investments.

IBM sees familiar faces as it advances in OpenStack

As Donald Rumsfeld said, “There are two types of unknowns, known unknowns and unknown unknowns.” IBM is definitely not alone in its pursuit of managed services around cloud and OpenStack, but more of its primary competitors are becoming “known unknowns.” Unlike smaller competitors that either fall below the radar or have a business model dramatically different than IBM’s, these are vendors IBM knows well.

In fact, on the very day IBM announced the acquisition of Blue Box, Cisco purchased OpenStack private cloud firm Piston, and Oracle acquired the engineering teams and intellectual property of Nebula. These may be strong challengers to IBM in its capitalization of Blue Box and the OpenStack cloud movement in general, but they each have a predictable strategy and approach.

Cisco’s purchase is aimed at solidifying its InterCloud initiative and streamlining the addition of OpenStack technology. And after lagging behind in cloud for years, Oracle is increasing its focus and the purchases of Nebula IP, along with the earlier purchase of Nimbula, provide pieces of technology and expertise it needs to regain lost ground. IBM will need to rapidly build out the partner go-to-market strategy for Blue Box to capitalize on the broader data center footprint and managed support models.

In the cases of both competitors’ acquisitions, TBR believes IBM is ahead in its OpenStack cloud initiatives, and its purchase of Blue Box only serves to widen that gap.

(C) TBR