IBM commits $1.2bn to cloud data centre expansion

IBM chief executive Virginia Rometty wants to expand her company's cloud services business

IBM, the global computing giant, has said it is investing more than $1.2bn (£735m) expanding its data centres and cloud storage business.

It plans to build 15 new centres around the world, bringing the total number up to 40 during 2014.

IBM bought cloud services company SoftLayer for $2bn last year, and this investment will double the subsidiary's storage capacity, the company said.

IBM believes the cloud services market could be worth $200bn by 2020.

Businesses are increasingly leasing data storage, computing power and web hosting services from a growing number of specialist cloud companies - effectively outsourcing their IT needs to cut costs and improve efficiency.

IBM says it has added 2,400 new clients since it acquired Dallas-based SoftLayer.

Supercomputer investment

In a related announcement last week, IBM said it would spend $1bn creating a new division for Watson, its supercomputer.

Watson, which aims to mimic how people think, using natural language capabilities and analytics, beat its human rivals in the US TV quiz show Jeopardy in 2011.

IBM plans to farm out Watson's abilities to businesses and consumers via SoftLayer, and is encouraging developers to create new apps that tap in to the supercomputer.

The growth of mobile devices, wireless connectivity and cloud computing means businesses and public sector organisations - particularly healthcare providers - will increasingly access intelligent data services remotely from a range of providers, such as IBM.

Investment bank Credit Agricole has predicted that Watson spin-offs could account for more than 12% of IBM's total revenue by 2018.