IBM, Moving Into Cloud Computing

The deal, in which IBM will sell products from Sunnyvale, Calif.-based Juniper under its own name, builds on similar relationships IBM has with other networking companies. The Armonk, N.Y.-based technology giant already resells networking equipment from Cisco Systems Inc. (CSCO), the world’s largest networking equipment company and Brocade Communication Systems Inc. (BRCD), another networking product maker. Cisco, Juniper and Brocade all make routers and switches, used to “network” computers together, as well as direct information and data over the Internet. IBM’s deal comes amid growing interest in “cloud computing,” the concept of selling computing services that are accessed online and paid for on a metered basis. Cloud computing is shaking up the technology sector - Microsoft Corp. ( MSFT) and Google Inc. (GOOG) have launched products to establish themselves in the field - and several big technology vendors are seeking to augment their portfolios with products which can better serve the cloud computing platform.

IBM has traditionally resold some networking equipment made by companies such as Juniper and Cisco, through its massive technology services unit. In particular, Hewlett-Packard Co. (HPQ), IBM’s biggest rival in the hardware and IT services market, has been beefing up its ProCurve networking division and is starting to compete more aggressively with Cisco and others. Cisco, for its part, recently announced its intention to start making servers, bringing it ultimately into more direct competition with IBM, while Oracle Corp. (ORCL), the database and software giant, also recently moved into the hardware business through its acquisition of Sun Microsystems Inc.

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