Illustration: Christopher T. Fong/Protocol
The painful history of IBM Cloud

Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about cloud and enterprise software. This Thursday: how IBM squandered its cloud-era chances, Cloudflare thinks it can take on AWS, and the strangest thing Satya Nadella ever did.
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IBM was once — and still is, for people whose main sources of information about technology are television ads during sporting events — an American innovation icon, a company that literally created what we now think of as information technology. But its failure to turn the acquisition of SoftLayer into a viable public cloud continues to haunt the company, which now helps its customers generate revenue for AWS, Microsoft and Google.
That's what more than a dozen current and former IBM employees told Protocol about the last decade inside IBM's attempts to adapt to a changing enterprise tech market. They described a company caught moving in two directions: a group that correctly understood how the cloud was going to play an enormous role in the future of enterprise computing, matched up against a sales-driven culture that prioritized the needs of its large customers over the work required to catch up with AWS.
IBM's cloud development was messy from the start, according to the sources, with plenty of missteps:
And its key product came too late. By the point it could genuinely compete in the market, the Big Three cloud providers had firmly established themselves as the backbone of enterprise infrastructure. How did it get to this point?
Now, IBM is betting on the hybrid cloud. There's no question about whether that buzzword is a real-world infrastructure strategy in 2021: Even AWS is on board with products its customers can use to manage applications running in their own data centers or other public clouds, which would have been unthinkable for the cloud pioneer to release just a few years ago.
The problem for IBM is that hybrid cloud, by definition, incorporates a public cloud component.
But there may be a silver lining to this story. IBM insiders credited current CEO Arvind Krishna with ending the company's multifaceted approach to its public cloud product strategy once he got control of the division. That gave them hope he could find a way through to yet another one of IBM's fabled turnarounds.
— Tom Krazit
The world of payments is changing — and fast. As more of us shop online, businesses are trying to break down barriers to making payments and purchases online. The goal is to improve payment performance, and utilize the role of payments as a strategic tool for growth.
R2 units: Cloudflare CEO Matthew Prince enjoys playing the foil to AWS, and this week his company introduced its most direct challenge to one of the cloud leader's core businesses: the S3 storage service. I talked with Prince about R2 ("one less than S3," he said) and how Cloudflare plans to offer cheaper storage options by waiving data-egress fees for its service.
Dream on: Salesforce is on a roll right now, raising revenue guidance for its fiscal year coming off its annual Dreamforce conference. Protocol's Joe Williams assessed the company's fortunes as it digests the $27.7 billion acquisition of Slack and fends off upstarts hoping to make data analytics their calling card.
Smartphones changed everything about the way enterprise tech was designed and consumed. But 15 years after the debut of the iPhone, is there any innovation left in the category?
Join Protocol's David Pierce for a conversation about the future of the smartphone with Drew Blackard, vice president of mobile product management at Samsung; Christina Cyr, CEO of The Cyrcle Phone; and Nicole Faerber, CTO of Purism, next Tuesday, Oct. 5, at 10 a.m. PT / 1 p.m. ET. RSVP here.
Our own research with Oxford Economics shows that consumers in Europe, the U.K. and the U.S. are all willing to pay more for products when they are rewarded by the ease and speed of one-click payments. We are also seeing an increasing number of merchants moving toward, and nudging their customers toward, subscription models — and why wouldn't you?
Thanks for reading — see you Monday!
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