IBM links up with Vodafone for $550m cloud computing contract

IBM and Vodafone have entered into a joint venture to provide businesses with support for linking up cloud systems, which can support next-generation technology such as machine learning or 5G networks.

Vodafone will pay IBM $550m (£423.4m) under an eight-year contract as part of the deal, the firms said today, enabling it to offer tools such as artificial intelligence to its networked businesses.

Two global executives will be moved to London to lead the venture, where it will be headquartered. It is expected to become operational in the first half of 2019.

It is hoped that the joint venture will make it easier for businesses to link up their separate cloud systems, without having to completely redesign their network from start to finish. Vodafone said an estimated 70 per cent of the world's organisations use up to 15 different cloud systems at any one time.

“Vodafone has successfully established its cloud business to help our customers succeed in a digital world,” said Vodafone CEO Nick Read.

“This strategic venture with IBM allows us to focus on our strengths in fixed and mobile technologies, whilst leveraging IBM’s expertise in multi-cloud, AI and services. Through this new venture we’ll accelerate our growth and deepen engagement with our customers while driving radical simplification and efficiency in our business.”