IBM Offers Cloud Container Service In Australia Datacenters

International Business Machines Corp. (NYSE:IBM) recently announced that its cloud container service is now available from its datacenters in Sydney and Melbourne. The service will use the containerization platform, Kubernetes, leveraging Docker engine.

Cloud containers can be regarded as memory spaces dedicated to hold application specific software and files. Since this service is backed by a single application, instances of security breaches are rare. Demand for such services is on the rise among companies with high safety requirements. Also, they are easily portable to other servers using the same operating system.

IBM will be updating and monitoring the containers to keep them on par with the application’s environment and security requirements. IBM has been working closely with Docker and Kubernetes for the past few years. The container-as-a-service (CaaS) was initially launched on IBM’s cloud platform in Jun 2015.

We believe the availability of the service in the Australian market will provide the company with a competitive edge against peers like Amazon (NASDAQ:AMZN) , Oracle (NYSE:ORCL) and Microsoft (NASDAQ:MSFT) .

Growth Prospects in CaaS

IBM has underperformed the S&P 500 on a year-to-date basis. While the index gained 9.9%, the stock declined 6.1% over the same time frame. However, the growth prospects along with opportunities in cloud computing and Blockchain can help the stock to rebound in the long run.

Per 451 Research, the application container market will grow from $762 million in 2016 to $2.7 billion in 2020, at an estimated compound annual growth rate (CAGR) of 40%. The entire cloud enabled technologies (CET) market is anticipated to be worth $39.6 billion by 2020.

Moreover, with ransomware like Wannacry and Petya hitting the web in quick succession, ensuring the safety of information has become the top priority of firms. One of the distinguishing features of CaaS is its secured way of deploying specific application needs, without involving other computing resources.

Notably, containers create a boundary so that if anything goes wrong with a specific container, it will not affect other applications. The integrity of the files within the containers is maintained and compatibility problems between applications are also mostly solved.

We believe the new service will enhance IBM’s service portfolio for the Australian market, thereby allowing customers to develop and manage secure applications. This will also add to its cloud segment revenues.

Zacks Rank

Currently, IBM has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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