Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
IBM (NYSE: IBM ) is the strongest performer on the Dow Jones Industrial Average (DJINDICES: ^DJI ) index today. The Big Blue stock has gained 0.8% on a generally gloomy market day, single-handedly bolstering the index with the gift of about 10 Dow points.
One reason IBM is outperforming today is that it has just staked a confident claim in the cloud-computing services market. The company is aiming squarely at Amazon.com (NASDAQ: AMZN ) and its firmly established EC2 cloud platform.
In a series of just-unveiled commercials with a matching website, IBM claims to power 360,000 websites through its SoftLayer services. By contrast, IBM points out that Amazon EC2 only drives 82,000 sites.
"The fact is that leading companies want to partner with a reliable and secure company with technology built on open standards," the ads say.
There's no question that IBM is a powerhouse across the IT services sector. The company sells hardware, software, and services to support pretty much anything you might want to do with an enterprise-class computing system. Cloud services are no exception to this rule.
But a grain of salt might come in handy. IBM just might be stretching the numbers a little bit in the Amazon comparison.
Amazon is a pure play on actual cloud services (well, not counting those pesky e-commerce operations), because the company doesn't offer plain old site-hosting services. But IBM does, and some of that effort may have counted against those 360,000 sites purportedly built on IBM's cloud services.
None of these nitpicky details matter in the end. Amazon runs a very healthy cloud-services business, which analysts estimate to collect nearly $1 billion in annual revenue nowadays. The company is a veteran and a trailblazer in this field, no matter what IBM might be doing.
IBM is playing in roughly the same cloud-revenue league -- again, according to analyst estimates, as neither one of these companies actually breaks out cloud-computing sales in quarterly or annual reports. It's not the core of IBM's business by a long shot, but cloud services are an important focus for new CEO Ginni Rometty, and her efforts are paying off.
If these cloud service ads accomplished anything, they beamed a spotlight on one of IBM's fastest-growing operations for the world to see. Investors are sitting up and taking notice today.
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