2014 in Review: Cloud computing comes of age: Page 2 of 2

Pushing the cloud envelope

This scenario set the stage for several large cloud vendors to push their wares and services in 2014.

Virtualisation giant VMware made a serious transition to become a cloud player by offering new OEM (original equipment manufacturer) hardware-based offerings, as well as re-branding a one-year old hybrid cloud offering.
 
VMware wants to defend its turf and customer base in the wake of rising challenges from other pure-play public cloud providers such as Amazon Web Services.
 
Robert Mahowald, vice president of cloud services at IDC, told the Wall Street Journal, “It’s their rebuttal to Amazon [and other players],” adding that the move comes at a crucial time since as chief information officers (CIOs) are beginning to plan their respective hybrid cloud strategies and implementation.
 
But the Palo Alto, California-based VMware isn’t the only one pushing the cloud agenda as long-time legacy players such as Oracle Corp, Microsoft Corp, IBM Corp and SAP SE are all adjusting their tried-and-tested on-premises software strategy to become more cloud-centric.
 
All these vendors are gunning for a bigger piece of the US$127-billion market potential by 2018, up from US$56 billion today, according to an IDC forecast.
 
This represents a five-year compound annual growth rate (CAGR) of 22.8%, which is about six times the rate of growth for the overall IT market, with public IT cloud services in 2018 accounting for more than half of worldwide software, server, and storage spending growth.
 
Cloud security, privacy

Then there is the issue of security, and by extension, privacy. Several developments over the course of 2014 brought these issues to the fore, but none more clearly than the revelations by Edward Snowden, the former Central Intelligence Agency (CIA) and National Security Agency (NSA) computing contractor.
 
Over a period of months, Snowden began revealing startling details about what the US and British governments were doing behind closed doors.
 
Such was the impact of his revelations that they have prompted enterprises around the world to rethink their cloud computing strategies, with many closely scrutinising how they go about adopting the technology despite acknowledging that there are real benefits, according to an NTT Communications-sponsored study.
 
The main conclusion of the study was that almost nine in 10 (88%) ICT decision-makers are changing their cloud-buying behaviour, with 38% amending their procurement conditions for cloud providers.
 
Additionally, 31% of ICT decision-makers are moving data to locations where the business knows it will be safe; and 62% of those not currently using the cloud feel the Snowden revelations have prevented them from moving their ICT to the cloud.
 
The practical impact of the revelations also prompted one of the world’s largest cloud players, Amazon Web Services (AWS), to specially launch a data centre within the borders of Germany in a bid to calm the fears of those whose feathers were ruffled, including Germany’s Chancellor Angela Merkel.
 
In an interview with Digital News Asia (DNA) early last year, AWS chief technical officer (CTO) Dr Werner Vogels stressed that the company has at no time participated, nor will participate, in any programme by the US Government, or any government, to force the release of customers’ confidential information to any parties.
 
And at the cloud vendor’s annual re:Invent user conference, AWS chief security officer Stephen Schmidt said that every attempt has been made to protect customer information.
 
Schmidt also said that it is AWS policy to inform customers of any request made by parties which have legitimate warrants to access its data centres. To protect data more stringently, he suggested customers further secure their data by encrypting it and holding the keys themselves.
 
The inflection point 
 
Despite security and privacy being at the forefront of many IT decision-makers’ minds, there is growing evidence that companies are strategically embracing the cloud.

Many South-East Asian enterprises are at an inflection point – for one, they better understand the concept compared with five years ago, although some remain wary of the cloud and its benefits.
 
The latter’s concerns can be addressed by understanding what cloud providers can bring to the table. Issues such as security and privacy can be addressed using encryption and the close scrutiny of service level agreements struck with cloud providers.
 
Also, companies considering the cloud don’t have to go all-in immediately, as they can start where they are comfortable and take baby steps toward migration.
 
Additionally, not everything has to go to the cloud, as parts of IT can still reside within a company’s data centre. This is where the hybrid cloud model works best – maintaining the privacy of some parts of the company’s data, while harnessing the power of the cloud in extending services to the public.
 
Finally, a cloud-transition strategy will also need to be driven from the top as a strategic effort rather than a tactical one. This would elevate IT towards an enabling role rather than being perceived as a necessary evil.
 
CTOs and CIOs need to think about re-aligning their IT managers to being skilled in tackling the cloud, as IT management is also changing from being inhouse-focused to one that is about managing third-party providers.
 
2014 in Review:  The telco battleground
 
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Hedging its bets, VMware embraces brave new IT world
 
Can Amazon Web Services serve enterprises effectively?
 
In HANA and Gen-Y, SAP doth trust
 
‘The cloud is safer than you think’
 
 
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