This article is based on reporting originally published by LiveMint and covers statements made by IBM India and South Asia executives in early 2020.
IBM Reports Double-Digit Commercial Cloud Revenue Growth
IBM Corp. recorded double-digit revenue growth in its commercial cloud services segment as public cloud adoption accelerated among mid-market businesses, according to Vikas Arora, Vice-President of Cloud and Cognitive Software and Services at IBM India and South Asia.
IBM defines its “commercial” customer tier as any customer outside its top 200 enterprise accounts. As of early 2020, the company had more than 1,000 customers on IBM Public Cloud, a platform primarily targeting the mid-market segment.
“Our cloud integration platforms over the past two-three years have been very successful. In the commercial space, IBM’s focus has been on new customer acquisition and we are seeing double-digit revenue growth in this space, with public cloud gaining traction.”
Vikas Arora, Vice-President, Cloud and Cognitive Software and Services, IBM India and South Asia
Security Portfolio Sees Robust Growth
Within IBM’s commercial business, the security portfolio experienced particularly strong momentum. Arora highlighted that many smaller banks were actively investing in strengthening their security infrastructure, contributing to this growth. IBM’s broad security offerings — spanning identity, threat intelligence, and managed security services — positioned the company well as regulated industries began cloud migration planning.
The Red Hat Acquisition and the Hybrid Cloud Opportunity
IBM’s $34 billion acquisition of Red Hat — completed in 2019 — formed the strategic backbone of the company’s hybrid cloud push. IBM positioned the deal as unlocking a $1.2 trillion hybrid cloud market opportunity for 2020 and beyond. Red Hat’s open-source portfolio, including OpenShift and Ansible, gave IBM a platform-agnostic container and orchestration layer that could operate across on-premises data centers and multiple public clouds.
This is particularly relevant for regulated industries — such as banking, financial services, and telecommunications — where mission-critical workloads cannot simply be lifted and shifted to a public cloud. Hybrid cloud architectures allow these organizations to maintain compliance and data sovereignty while gradually extending workloads to public infrastructure.
What Is Public Cloud? A Quick Definition
For context, a public cloud is a computing model in which infrastructure resources — such as virtual machines, storage, and managed services — are made available over the internet by a third-party provider. Well-known examples include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Pricing is typically consumption-based, with options ranging from pay-per-use to reserved capacity models. IBM Public Cloud sits alongside these hyperscalers, differentiating primarily through enterprise integration, security, and Red Hat-based open-source tooling.
India’s Public Cloud Market: Growth Projections
The broader market context in India was favorable at the time of this reporting. According to a joint report by Google Cloud and Boston Consulting Group (BCG), public cloud deployments in India were projected to grow at a compound annual growth rate (CAGR) of 25%, expanding from approximately $3 billion in 2018 to $8 billion by 2023. The same report estimated a cumulative GDP contribution potential of approximately $100 billion from 2019 to 2023.
Despite these projections, Arora noted that only 15–20% of the Indian cloud market was on public cloud at the time. The relatively low penetration was attributed to regulated industries — particularly banking and telecommunications — keeping mission-critical workloads off public infrastructure due to compliance and data privacy concerns.
Maturity Curve: From Pilots to ROI-Focused Cloud Strategy
Arora described a clear maturity curve in how organizations approach cloud adoption:
- Early stage: Customers running pilots and proofs of concept for specific AI or data analytics use cases.
- Intermediate stage: Enterprise conversations shifting toward security, data privacy, and managed cloud services.
- Mature stage: Organizations that completed automation years ago — notably banks and telcos — now focused on unlocking new revenue streams and increasing customer stickiness through deeper cloud investment.
Manufacturing represented a sector earlier in the journey, while financial services and telecommunications were described as leading adopters already focused on return on investment (ROI) metrics rather than initial migration planning.
“There is always a very strong focus on RoI through IT spends. Across sectors, some have matured earlier than others like banks and telecom. They accomplished automation several years ago. So, they are looking to unlock new revenue streams by increasing customer stickiness in terms of cloud spends.”
Vikas Arora, IBM India and South Asia
Key Takeaways for DevOps and Cloud Practitioners
- IBM’s commercial cloud growth is driven by mid-market adoption, not just its top-tier enterprise accounts.
- The Red Hat acquisition gives IBM a credible open-source, container-native story for hybrid cloud deployments — directly relevant to teams using OpenShift or Kubernetes.
- Security remains a top concern and a top budget priority, particularly for regulated industries moving toward cloud-native architectures.
- Organizations evaluating cloud strategy should expect to map their position on the maturity curve: pilot/PoC, active migration, or ROI optimization.
- Hybrid cloud — not full public cloud migration — is the dominant model for mission-critical workloads in regulated sectors.