The News: CaixaBank, a leading financial institution in Spain and Portugal, serving more than 15.5 million customers, has announced an agreement with IBM Services (NYSE: IBM) to help accelerate its hybrid cloud journey and continue their work to increase the bank’s capability to develop innovative, digital-first solutions to enhance client experiences. Read the full press release on IBM.
Analyst Take: I believe the announcement of the CaixaBank deal solidifies the market acceptance of IBM as a key partner hybrid cloud partner for financial institutions. Despite the release talking more to the partnership and the solution itself, based upon details of discussions I had with executives about the deliverables, I speculate that the deal size could well be in excess of a billion USD. A significant win for IBM.
In the wake of the announcements around the Financial Services Ready Public Cloud (FS), IBM is off and running with its first big financial services announcement since its Bank of America partnership. That first partnership served as a critical announcement as the ability to tout one of the world’s largest banks and to have built the solution hand in hand to meet the rigorous regulatory and compliance needs of a cloud for financial services meant that IBM was already on a strong trajectory to gain adoption and the attention of other banks looking for a similar solution. CaixaBank, while not part of the FS Ready Public cloud, should be met with similar enthusiasm in the market.
IBM + Red Hat = Strengthened Potential
Since the announcement of the $34 billion dollar acquisition of Red Hat, the market has been seeking further support that the acquisition was sound and can deliver the scale and diversification that IBM would require to compete more broadly in cloud. With the company still trailing AWS and Azure, it is the capabilities of Red Hat OpenShift that will set the stage for growth and for IBM to see broader inclusion in more deals that are run on IBM’s Public Cloud as well as deals that place workloads in other clouds. The multi-cloud discussion is heating up and due to a vast number of variables from redundancy to data sovereignty to unique features sets, companies are increasingly looking to leverage multi-cloud solutions. Red Hat OpenShift is a key enabler for this and as I suggested, will play a part in getting IBM into more deals in financial services and beyond.
For the CaixaBank deal, the bank will leverage IBM Cloud Pak for Applications running on Red Hat OpenShift to manage workloads and applications across its overall cloud infrastructure. Per the company’s release it noted that the bank also agreed to continue to work with IBM in their joint innovation center to apply advanced technologies like AI, and additionally explore quantum computing and blockchain solutions.
It is important to note the inclusion of broader IBM technologies within the Caixa deal–I’m especially paying close attention to the incorporation of AI as banks will look to deliver next generation customer experiences through the development of AI in areas like conversational chatbots, service recommendations and the ever-important delivery of account security and fraud detection.
Overall Impressions of CaixaBank Deal
Once IBM announced its partnership late last year with Bank of America, it became apparent to me that the company was going to lean into the relationship to develop and deliver a scalable offering that would accelerate cloud adoption by the broader banking community.
With Red Hat being a key component to the buy-in. It is also the focus of IBM on enterprise specific deals as well as the company’s deep roots in security rich compliance solutions that positions the company so well to win deals like Bank of America and Caixa Bank.
Hence, this isn’t a momentary shift, but in my opinion serves as the beginning of a trend for IBM. With the company’s deep roots in verticals beyond financial services, I can see the financial services public ready cloud being the first of a series of vertical cloud launches to roll out for IBM–I will expect them to be met with similar success of these significant deals that have been won in the financial services space.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
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The original version of this article was first published on Futurum Research.