Analysts don't count IBM as one of the 'big three' cloud vendors - here's why Big Blue is annoyed

IBM is wrongly being placed behind Google when the world's largest cloud vendors are ranked by size, according to European cloud boss Sebastian Krause.

Amazon Web Services (AWS) is universally considered the largest cloud business in the world, with Microsoft Azure the challenger and Google placed third.

But it's not as straightforward as taking the figures from each vendor and ranking them, because different data is published by each.

AWS releases clear revenue figures; Microsoft provides only an Azure revenue growth percentage; and Google recently started providing revenue for its overall cloud business.

Google said that quarterly sales for its cloud business - including Google Cloud Platform and G-Suite - came in at $2.6bn (£2bn) for its Q4, and $9bn for the year.

And it's Google's figures that IBM has a problem with.

IBM reported cloud revenue of $6.8bn for the same quarter, and $21bn for the year.

But analysts consistently place IBM behind Google and, globally, Alibaba, which has irked IBM (to the point that the firm got in touch with CRN after we ran an article about the "big three").

Speaking to CRN at IBM's Southbank, London office, European cloud boss Krause said that the publication of Google's numbers shows that the web giant's cloud business is smaller than most people thought.

"Now everyone can look basically under the hood of what Google has been doing, so it's pretty clear that they are not number three," he said.

"We are way ahead of Google and these are nice figures that we can put out into the market, but for us it is really important that we are serving our clients and the markets that we are addressing, which we are doing quite well - the enterprise and mission-critical capabilities.

"We clearly have a message that is resonating with customers that know us, but we need to get that message out to a broader degree to make sure people understand our full portfolio."

Krause said that IBM was ahead of the curve when, in 2015, it proclaimed that the world would eventually settle on a hybrid model, despite the likes of AWS saying every workload could run in the cloud.

IBM's portfolio now spreads across private, hybrid, and public cloud infrastructure, as well as the services that can manage workloads across all environments.

It's here that IBM's claims to be the third-largest cloud provider in the world become a bit sketchy.

The cloud unit that IBM refers to is actually called Cloud and Cognitive Services and, the vendor says, includes cloud and data platforms, Red Hat, IoT, AI, security, applications, and transaction processing platforms.

This unit accounted for $23bn of its total $77bn in its last financial year.

Confusingly, IBM also publishes a figure for "total cloud revenue", which was $21bn in the last financial year.

This figure contains elements of multiple business units, for example services, cloud migration and software sales.

Essentially, IBM takes "cloud" in its broadest sense.

But the market analysts that IBM has taken issue with will generally take a narrow approach: sales generating from the renting of servers and compute power.

Because of IBM's reporting guidelines, Krause was unable to explain how Big Blue arrives at its cloud revenue figure, or what contributes the most sales.

But he did say that IBM has not given up on chasing down AWS, Microsoft and that elusive third place with its own public cloud offering.

IBM's approach, he said, is to provide the layer on top of multiple cloud and on-premise environments.

He said that public cloud is fast becoming a commodity, to the point where it doesn't matter which vendor's infrastructure is being used, just that the data can be managed effectively.

"Cloud is a continuum from on-prem to public and where you are deploying it and what infrastructure you are choosing underneath," he said. "It's about the cloud-native capabilities that you want to provide.

"Some of the customers I'm talking to are already at the point where they are saying that [the cloud provider they use] is not relevant to them, so long as the infrastructure is reliable. So I think, to a degree, we have reached that point already."