As Microsoft and Yahoo go their separate ways, IBM and Google are cozying up to move into what they think will be the dominant IT delivery model of the future–so-called cloud computing.

Over the next year, IBM and Google plan to roll out a worldwide network of servers from which consumers and businesses will tap everything from online soccer schedules to advanced engineering applications. The IBM-Google cloud, fresh off testing at several major universities, runs on Linux-based machines using Xen virtualization and Apache Hadoop, an open source implementation of the Google File System.

Google already has launched numerous cloud-based services for consumers, such as e-mail and storage. With the exception of security requirements, “there's not that much difference between the enterprise cloud and the consumer cloud,” Google CEO Eric Schmidt said earlier this month during an appearance in Los Angeles with IBM chief Sam Palmisano. “The cloud has higher value in business. That's the secret to our collaboration.”

A STUDY IN CONTRASTS
Palmisano and Schmidt insisted that their companies are similar, despite obvious differences. “We're boring, they're exciting. We're slow, they're fast. We're fat, they're skinny,” Palmisano joked. But the contrasts are mostly skin deep, he said, noting that the companies share “a common technical alignment.”

IBM believes the cloud model will allow it to reach small and midsize companies around the world, which it says represent a $500 billion IT market that it has trouble serving profitably through the usual sales channels. Google and IBM could conceivably supply computer users–both business and consumer–with hosted offerings ranging from basic productivity software like word processing and calendaring to sophisticated management and security tools through IBM's Tivoli brand and Google's Postini unit.

Under a portion of its cloud strategy it's calling the Blue Business Platform, IBM plans to launch an online marketplace offering its own pre-integrated products and services, as well as those from other software developers. Customers will be able to use the software they buy “on premises or in the cloud,” Palmisano said.

DIG DEEPERSAAS: BEYOND CRM Here's how to drive your software-as-a-service strategy beyond the old standbys.Download this InformationWeek Report>> See all our Reports