International Business Machines IBM recently announced that its IBM Cloud for Financial Services is available now with support for Red Hat OpenShift platform and other cloud-native services.
The availability of support for RedHat OpenShift on IBM Cloud for Financial Services will accelerate digital transformation for enterprises in the highly-regulated financial services’ vertical. Enterprises in the financial services domain will be able to design applications using the OpenShift platform and shift virtual machines’ workloads.
With IBM Cloud for Financial services, businesses will better meet the ever-growing compliance requirements.
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IBM Cloud for Financial Services is built on IBM’s public cloud and designed in association with Bank of America. IBM public cloud leverages Red Hat OpenShift as the principal Kubernetes environment.
IBM Cloud for Financial Services also utilizes 'Keep Your Own Key' encryption feature (delivered through IBM Hyper Protect Services) and IBM's fourth-generation confidential computing capabilities to ensure data protection across both cloud and VMWare workloads.
IBM also announced that SAP SE SAP has joined the IBM Cloud for Financial Services ecosystem. IBM Cloud for Financial services boasts a rich partner ecosystem with 90 enlisted partners including many Software as a Service (SaaS) providers and Independent Software Vendors (ISVs).
Rapid Cloud Migration in Financial Services Space Bodes Well
Globally, business enterprises were rapidly shifting their workloads to cloud even before the COVID-19 crisis. The pandemic and the ensuing remote work trend only accelerated this shift. Even enterprises in the highly-regulated banking and financial services industry began to migrate to cloud.
Migration to cloud provides enterprises with increased scalability, faster deployment, cost efficiency and higher security as well as disaster recovery management.
According to a Mordor Intelligence report, global cloud migration services market is expected to reach $448.34 billion by 2026 at a CAGR of 28.89% between 2021 and 2026.
Per a Verified Market Research report, the global finance cloud market is projected to witness a CAGR of 25.1% between 2020 and 2027 and reach $105.13 billion. For cloud service providers like IBM, this underscores massive revenue growth opportunity.
Last year, IBM acquired Expertus Technologies Inc to boost digital payments offering. Expertus Technologies is a fintech company engaged in providing innovative cloud-based electronic payment options to the organizations in the financial services domain.
IBM is endeavoring to gain a larger share of the lucrative cloud market. The tech giant IBM recently launched IBM Cloud Satellite, which will render its hybrid cloud services generally available across all environments including on-premises location along with any cloud platform as well as at the edge environment.
The tech behemoth is also acquiring smaller but extremely cloud-focused companies to meet its hybrid cloud vision. Some of its recent buyouts include Instana, Nordcloud and TruQua Enterprises LLC.
Red Hat acquisition remains IBM’s largest cloud-based acquisition. Red Hat is helping the company to fortify its competitive position in the hybrid cloud market and boost its containerized software capabilities.
For fourth-quarter 2020, IBM’s total Cloud revenues of $7.5 billion improved 10% year over year. The company witnessed healthy uptake of cloud-based solutions and digital transformation offerings, driven by synergies from Red Hat buyout in the last reported quarter.
IBM also announced the split of its business in two separate companies to capitalize on this trend, in October 2020.
Nevertheless, IBM needs to watch out for increasing competition from dominant cloud players like Amazon’s AMZN Amazon Web Services (“AWS”), Microsoft’s MSFT Azure and Alphabet’s Google Cloud.
Currently, IBM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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