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According to a CNBC article this afternoon, social media juggernaut Facebook Inc (NASDAQ:FB) is making arrangements to move the WhatsApp messaging service off of cloud servers hosted by International Business Machines Corp. (NYSE:IBM) and onto its own bank of data centers instead.

However, the effects of this decision will likely be minimal forboth companies, and negligible forFB stock and IBM stock as well, even though those effects will be in direct opposition to one another.

Earlier today, some other news outlets reported thatWhatsApp is one of IBMsfive largest cloud service customers and described the messaging service as the poster child for the IBM cloud.

However, an IBM representative told me this afternoonthat WhatsApp is not actually one of the companys top five clients. She said:

Contrary to what some of the stories are saying, WhatsApp is not a top 5 cloud client at IBM not even close. We have many multi-million and even some billion dollar cloud clients, including US Army, Wal-mart, BMW, American Airlines, Lufthansa, Emirates, Workday, Chubb, AT&T, Wanda, Etihad, Maersk and many more.

So, losing the WhatsApp account could have a negative impact on IBMs bottom line, but considering thatlist of other cloud clients its likely to be almost insignificant, at least from a financial perspective.

Facebook, on the other hand, stands to gain a bit from this decision. Apparently, Facebook was spending nearly $2 million per month on the IBM cloud, according to an unnamed source for CNBC.

That means once the transition to FBs own cloud servers is complete, the company could realize as much as $24 million per year in savings (not considering, of course, the potential costs associated with maintaining the WhatsApp data on Facebook-owned servers).

While the real reason for moving WhatsApp off of IBMs cloud and onto its own servers has not been disclosed actually, the legitimacy of this entire plan has yet to be confirmed by either company there are myriad possibilities.

I can think of two simple reasons that would justify FB managements decision to pull WhatsApp from IBM: cost and control.

Even though Facebook is the worlds largest, most popular social media titan with a market cap of $440 billion, keeping expenses in check is still a top priority. If the use of the IBM cloud has been costing FB tens of millions of dollars per year, and if the ability exists to shift WhatsApp to in-house servers, then the decision is a no-brainer.

No corporation, even gigantic ones like Facebook, will continue to spend that much money when they can just as easily do the job in-house.

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Excerpt from:
Facebook Inc (FB) to Pull WhatsApp Off IBM Cloud Servers ... - Investorplace.com

In-Depth

Wells and city water have more in common with the cloud than you might think.

With Father's Day approaching, it got me thinking about my father, Darrel, and some of the great stories and lessons he shared with me while I was growing up. His father died when he was young, and although he had a loving mother, he had a hardscrabble childhood growing up in a small town in Utah. One lesson he inadvertently taught me when I was young that I would later reflect on was the importance of cloud computing.

As a kid, we used to visit the house he grew up in. One summer, my brother and I came across an old cemented water well on the property, and we started to talk to my dad about it. I thought that it was way cool to have this "free" source of water on the land that his family had complete dominion over. Then dad (as dads are apt to do) set me right.

Once, the well dried up and the well digger had to drill a deeper well to strike water. For the most part, we could pull water from the well on a regular basis, but during the hot Utah summers, the wind-powered well reliability was not optimal, and they had to use it judiciously.

They eventually moved to an electric well, but the cost of electricity to power the pump could get spendy. Money aside, dad said the worst part of having the well was worrying about potential health hazards; one autumn, the whole family became very ill and the doctor suspected that it had something to do with well water.

Taking these negative aspects of having a property well into account, my dad told me that it was a blessing when the city created a central water system by constructing a reservoir high up in the mountains. The city piped the water down to a station where it was monitored and treated. The vast majority of residents in the town jumped on the chance to join the new central water supply. Some agricultural and industrial users didn't cement up their wells, using them to supplement their city water; but for the most part, people found city water to be cheaper, more reliable and safer to use than well water.

So, how does my father's story about his family's well and city water relate to cloud computing? For the past 50 or so years, we've been using "well" technology in our datacenters. We put in our own servers, and although we sometimes get it right, we more than likely have to rely on getting professionals to help us set things up to make our servers efficient and workable.

We have a finite set of compute and storage resources that need to be closely monitored to prevent them from being used up. Even though we are diligent in preventing viruses and other security vulnerabilities, they still can get through the cracks and cause our datacenters great harm.

But just as a central city water supply solved problems for the citizens of my father's town, cloud computing can solve common issues and inconveniences in your datacenter. The cloud is a reservoir of compute and storage to draw upon as needed, and is almost impossible to deplete. Cloud compute centers are located near cheap, reliable power sources such as hydro-electric dams. Cloud providers can buy compute and storage devices by the boxcar load to get prices you can only dream about.

Due to the economy of scale, cloud centers can be staffed around the clock with dedicated professionals specialized in one aspect of the cloud, delivering a more reliable service. The staff can monitor compute and storage security, detecting and, more likely than not, preventing viruses and other security concerns from affecting your datacenter.

That's how my father taught me about the importance of cloud computing.

(In memory of my father, who taught me more than he realized, encouraged my curiosity, and loved his his wife and kids. He was a good man.)

About the Author

Tom Fenton works in VMware's Education department as a Senior Course Developer. He has a wealth of hands-on IT experience gained over the past 20 years in a variety of technologies, with the past 10 years focused on virtualization and storage. Before re-joining VMware, Tom was a Senior Validation Engineer with The Taneja Group, were he headed their Validation Service Lab and was instrumental in starting up its vSphere Virtual Volumes practice. He's on Twitter @vDoppler.

Continued here:
What My Father Taught Me About Cloud Computing - Virtualization Review