I. Digital Realty, the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today the deployment of Amazon Web Services (AWS) Direct Connect 100Gbps capability at the company’s Westin Building Exchange in Seattle, Washington and on its Interxion Dublin Campus in Ireland, bringing one of the fastest AWS Direct Connect [1.] capabilities to PlatformDIGITAL®. Digital Realty’s platform connects 290 centers of data exchange with over 4,000 participants around the world, enabling enterprise customers to scale digital business and interconnect distributed workflows on a first of its kind global data center platform.
Note 1. AWS Direct Connect is a cloud service solution that makes it easy to establish a dedicated network connection from your premises to AWS. This can increase bandwidth throughput and provide a more consistent network experience than internet-based connections.
As organizations bring on new technologies and solutions such as artificial intelligence (AI) and IoT at scale, the explosive growth of digital business is posing new challenges, as data takes on its own gravity, becoming heavier, denser, and more expensive to move.
The new AWS Direct Connect 100Gbps is tailored to providing easy access to larger data sets, enabling high availability, reliability and lower latency. As a result, customers will be able to move bandwidth-heavy workloads seamlessly – and break through the barriers posed by data gravity. Customers gain access to strategic IT infrastructure that can aggregate and maintain data with less design time and spend, enabling access to AWS with one of the fastest and highest quality AWS network connections available.
As an AWS Outposts Ready Partner, Digital Realty’s global platform is optimized to support the needs of data-intensive, secure hybrid IT deployments. Digital Realty supports AWS Outposts deployments by enabling access to more than 40 AWS Direct Connect locations globally to address local processing, compliance, and storage requirements, while optimizing cost and performance. When coupled with the availability of AWS Direct Connect 100Gbps connections, the Westin Building Exchange and Interxion Dublin campuses become ideal meeting places for customers to tackle data gravity challenges and unlock new opportunities with their AWS Outposts deployments.
“As emerging technologies such as AI, VR and blockchain move from the margins to the mainstream, enterprises need new levels of performance from their hybrid solutions,” said Tom Sly, General Manager, AWS Direct Connect. “Deploying AWS Direct Connect at 100Gbps at Digital Realty facilities in Seattle and Dublin is critical to our strategy of helping customers build more sophisticated applications with increased flexibility, scalability and reliability. We’re excited to see the value Digital Realty’s PlatformDIGITAL® delivers for our mutual customers.”
The Westin Building Exchange serves as a primary interconnection hub for the Pacific Northwest, linking Canada, Alaska and Asia along the Pacific Rim. The building is one of the most densely interconnected facilities in North America, and is home to leading global cloud, content and interconnection providers, housing over 150 carriers and more than 10,000 cross-connects, giving Amazon customers low-latency access to the largest companies and services representing the digital economy. The 34-story tower is adjacent to Amazon’s existing 4.1 million square foot campus in Seattle.
Digital Realty offers six colocation data centers in the Irish capital, which forms a strategic bridge between Europe and the U.S. Ireland has particular significance as a global trading hub and provides the headquarters location for several global multinationals within the software, finance and life science industries. Multiple transatlantic cables also land in Ireland before continuing to the UK or continental Europe, making Interxion Dublin a prime location for the new AWS Direct Connect 100Gbps at the heart of a vibrant connected data community.
“Today’s announcement of the opening of AWS Direct Connect 100Gbps on-ramps significantly expands opportunities for customers to scale their digital transformation through our global PlatformDIGITAL®,” added Digital Realty Chief Technology Officer Chris Sharp. “AWS serves some of the world’s most innovative and demanding customers, from start-up to enterprise, that are looking to drive the digital economy forward. Our platform expands the coverage, capacity, and next-generation connectivity that AWS customers need to extend workloads to the cloud rapidly. We are honored to open up next-generation access in collaboration with AWS and specifically at the heart of the rich digital communities at the Westin Building Exchange and on our Interxion Dublin campus.”
The new deployments create centers of data exchange in Network Hubs deployed on PlatformDIGITAL®, enabling distributed workflows to be rapidly scaled and securely interconnected – reducing operating costs, enhancing visibility, saving time and improving compliance. The new capability also gives AWS customers instant access to a growing list of powerful AWS services such as Blockchain, Machine Learning, IoT and countless others – all over a direct, private connection optimized for high performance and security.
AIB, Inc., a leading data exchange and management firm with a software as a service platform deployed at over 1,600 automotive industry customers, recognized the value of deploying a physical Network Hub on PlatformDIGITAL® coupled with a virtual direct interconnection to AWS to enable flexibility in its hybrid IT environment.
“Our Texas-based operations required new cloud zone diversity solutions for our cloud native national vision. Digital Realty provided an innovative and comprehensive solution for AWS cloud access through PlatformDIGITAL®,” said Kellen Dunham, CTO, AIB, Inc.
Digital Realty’s global platform enables low-latency access to both the nearest AWS Region as well as a wide array of options to connect edge deployments or devices. Customers can securely connect to their desired AWS Region using both physical and virtual connectivity options. Globally, PlatformDIGITAL® offers access to more than 40 AWS Direct Connect locations, including 11 in EMEA, providing secure, high-performance access to numerous AWS Outposts-Ready data centers around the world. In addition, the Digital Realty Internet Exchange (DRIX) supports AWS Direct Peering capabilities and dedicated access to multiple third-party Internet Exchanges on PlatformDIGITAL®, providing a direct path from on-premise networks to AWS. The solution is part of PlatformDIGITAL®’s robust and expanding partner community that solves hybrid IT challenges for the enterprise.
About Digital Realty:
Digital Realty supports the world’s leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL®, the company’s global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture (PDx™) solution methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty’s global data center footprint gives customers access to the connected communities that matter to them with 290 facilities in 47 metros across 24 countries on six continents. To learn more about Digital Realty, please visit digitalrealty.com or follow us on LinkedIn and Twitter.
- For more information on locations and availability please visit www.digitalrealty.com/cloud/aws-direct-connect
- Learn about Digital Realty’s Data Hub featuring AWS Outposts solution for data localization and compliance on PlatformDIGITAL
- Explore global coverage options on PlatformDIGITAL®
- Read the AIB case study on deploying hybrid IT flexibly with Digital Realty and AWS
II. Bell Canada today announced it has entered into an agreement with Amazon Web Services, Inc. (AWS) to modernize the digital experience for Bell customers and support 5G innovation across Canada. Bell will use the breadth and depth of AWS technologies to create and scale new consumer and business applications faster, as well as enhance how its voice, wireless, television and internet subscribers engage with Bell services and content such as streaming video. In addition, AWS and Bell are teaming up to bring AWS Wavelength to Canada, deploying it at the edge of Bell’s 5G network to allow developers to build ultra-low-latency applications for mobile devices and users. With this rollout, Bell will become the first Canadian communications company to offer AWS-powered multi-access edge computing (MEC) to business and government users.
“Bell’s partnership with AWS further heightens both our 5G network leadership and the Bell customer experience with greater automation, enhanced agility and streamlined service options. Together, we’ll provide the next-generation service innovations for consumers and business customers that will support Canada’s growth and prosperity in the years ahead,” said Mirko Bibic, President and CEO of BCE and Bell Canada. “With this first in Canada partnership to deploy AWS Wavelength at the network edge, where 5G’s high capacity, unprecedented speed and ultra low latency are crucial for next-generation applications, Bell and AWS are opening up all-new opportunities for developers to enhance our customers’ digital experiences. As Canada recovers from COVID-19 and looks forward to the economic, social and sustainability advantages of 5G, Bell is moving rapidly to expand the country’s next-generation network infrastructure capabilities. Bell’s accelerated capital investment plan, supported by government and regulatory policies that encourage significant investment and innovation in network facilities, will double our 5G coverage this year while growing the high-capacity fibre connections linking our national network footprint.”
The speed and increased bandwidth capacity of the Bell 5G network support applications that can respond much more quickly and handle greater volumes of data than previous generations of wireless technology. Through its relationship with AWS, Bell will leverage AWS Wavelength to embed AWS compute and storage services at the edge of its 5G telco networks so that applications developers can serve edge computing workloads like machine learning, IoT, and content streaming. Bell and AWS will move 5G data processing to the network edge to minimize latency and power customer-led 5G use cases such as immersive gaming, ultra-high-definition video streaming, self-driving vehicles, smart manufacturing, augmented reality, machine learning inference and distance learning throughout Canada. Developers will also have direct access to AWS’s full portfolio of cloud services to enhance and scale their 5G applications.
Optimized for MEC applications, AWS Wavelength minimizes the latency involved in sending data to and from a mobile device. AWS delivers the service through Wavelength Zones, which are AWS infrastructure deployments that embed AWS compute and storage services within a telecommunications provider’s datacenters at the edge of the 5G network so that data traffic can reach application servers within the zones without leaving the mobile provider’s network. Application data need only travel from the device to a cell tower to an AWS Wavelength Zone running in a metro aggregation site. This results in increased performance by avoiding the multiple hops between regional aggregation sites and across the internet that traditional mobile architectures require.
Outside of the AWS Wavelength deployment, Bell is also continuing to evolve its offerings to enhance its customers’ digital experiences. From streaming media to network performance to customer service, Bell will leverage AWS’s extensive portfolio of cloud capabilities to better serve its tens of millions of customers coast to coast. This work will allow Bell’s product innovation teams to streamline and automate processes as well as adapt more quickly to changing market conditions and customer preferences.
“As the first telecommunications company in Canada to provide access to AWS Wavelength, Bell is opening the door for businesses and organizations throughout the country to combine the speed of its 5G network with the power and versatility of the world’s leading cloud. Together, Bell and AWS are bringing the transformative power of cloud and 5G to users all across Canada,” said Andy Jassy, CEO of Amazon Web Services, Inc. “Cloud and 5G are changing the business models for telecommunications companies worldwide, and AWS’s unmatched infrastructure capabilities in areas like machine learning and IoT will enable leaders like Bell to deliver new digital experiences that will enhance their customers’ lives.”
Launched in June 2020, Bell’s 5G network is now available to approximately 35% of the Canadian population. On February 4, Bell announced it was accelerating its typical annual capital investment of $4 billion by an additional $1 billion to $1.2 billion over the next 2 years to rapidly expand its fibre, rural Wireless Home Internet and 5G networks, followed May 31 by the announcement of a further up to $500 million increase in capital spending. With this accelerated capital investment plan, Bell’s 5G network is on track to reach approximately 70% of the Canadian population by year end.
5G will support a wide range of new consumer and business applications in coming years, including virtual and augmented reality, artificial intelligence and machine learning, connected vehicles, remote workforces, telehealth and Smart Cities, with unprecedented IoT opportunities for business and government. 5G is also accelerating the positive environmental impact of Bell’s networks. The Canadian Wireless Telecommunications Association estimates 5G technology can support 1000x the traffic at half of current energy consumption over the next decade, enhancing the potential of IoT and other next-generation technologies to support sustainable economic growth, and supporting Bell’s own objective to be carbon neutral across its operations in 2025.
About Bell Canada:
The Bell team builds world-leading broadband wireless and fiber networks, provides innovative mobile, TV, Internet and business communications services and delivers the most compelling content with premier television, radio, out of home and digital media brands. With a goal to advance how Canadians connect with each other and the world, Bell serves more than 22 million consumer and business customer connections across every province and territory. Founded in Montréal in 1880, Bell is wholly owned by BCE Inc. (TSX, NYSE: BCE). To learn more, please visit Bell.ca or BCE.ca.
Bell supports the social and economic prosperity of our communities with a commitment to the highest environmental, social and governance (ESG) standards. We measure our progress in increasing environmental sustainability, achieving a diverse and inclusive workplace, leading data governance and protection, and building stronger and healthier communities. This includes confronting the challenge of mental illness with the Bell Let’s Talk initiative, which drives mental health awareness and action with programs like the annual Bell Let’s Talk Day and Bell funding for community care, research and workplace programs nationwide all year round.
Comment and Analysis:
AWS already has an edge compute footprint that covers parts of Asia, Europe and North America. AWS, Google Cloud and Microsoft Azure increasingly (unsurprisingly) look like the real power brokers and empire builders in multi-access/mobile edge computing. Rogers and Telus, Bell’s two main rivals. will likely contract with one of the three big cloud service providers for their 5G edge computing needs.
MTN Consulting publishes quarterly vendor share in the telecom vertical, covering more than 100 suppliers of hardware, software and services. Many of them are starting to call out the cloud service providers as among their key competitors. VMware is an obvious one. It notes that “providers of public cloud infrastructure and SaaS-based offerings, such as Amazon AWS, Google GCP, Oracle Cloud and Microsoft Azure” are direct competitors.
Nearly a decade ago, as cloud services began gaining popularity, many telcos hoped to be direct beneficiaries on the revenue side. The cloud market went a much different direction, though, with large internet-based providers proving to have the global scale and deep pockets able to develop the market effectively. From 2011-2020 webscale operators invested over $700 billion in capex, a big portion of it devoted to building out their cloud infrastructure.
Amazon Web Services (AWS) made the earliest strides in telecom, in 2015 (with Verizon), but Azure and GCP were serious about the market by 2017.
By 2020, cloud service providers had made significant progress in the telecom sector. The figure below, courtesy of MTN Consulting, provides an estimate of cloud revenues in the telecom vertical for the three top U.S. based cloud service providers as well as China-based Alibaba and Tencent.
Here is how cloud computing helps telecom operators thrive and provide better services:
- Ensure high scalability: telcos who have made their journey to the cloud can easily scale up for today and scale back down once the demand for telecommunication services returns to its normal.
- Guarantee resilience: cloud computing helps telecom companies quickly recover from stressful situations such as sporadic high loads, hacker attacks, hardware failures, etc. It is based on a well-architected approach that allows the self-healing of a system in time. Anomaly detection, automation, and adaptiveness are the key concepts of it.
- Offer quick disaster recovery: anything from a power outage at a data center to a security breach may cause data loss. If you have backups of databases stored in the cloud, you can quickly restore all the data.
- Improve time-to-market: with cloud computing, telecom companies can deliver their products and services faster, because they no longer have to procure individual pieces of hardware for each function in the network. They can now develop network functions from the outset as software and run them on servers hosted in a cloud environment.
- Cut expenses: in terms of cost economics, cloud reduces the operating expense of a company setting up and managing its own data center. This includes various costs associated with hardware, software, servers, energy bills, IT experts, etc. With cloud infrastructure, a telecom company simply pays only for services it uses.
- Enhance customer experience: cloud computing helps telecom operators minimize latency, strengthen security, provide automated customer support, predict customer preferences, and offer new omnichannel digital experiences.
- Enable network automation: cloud helps automate today’s manual processes regarding designing and testing new network components; deploying, orchestrating, and monitoring networks. This becomes possible thanks to continuous integration, continuous testing, and continuous deployment. Modern networks are able to analyze their performance and respond to issues in real-time that only boosts customer satisfaction.
- Make use of data: telecom companies process huge volumes of customer data. And cloud enables operators to drive valuable insights from this data with the help of data science and data analytics. As a result, telcos can use these insights to further improve their operations. For example, during the pandemic, telecom operators provide data to monitor how people and crowds are spreading the virus.
- Generate new revenue streams: telecom operators can monetize their physical infrastructures by partnering with cloud service providers. Until recently, operators and hyperscalers were seen as competitors. But partnerships between telecommunications companies and cloud providers will only support further market growth. Telcos can offer their infrastructures to cloud providers to help them get closer to customers at the edge by launching platform solutions dedicated to telecoms infrastructure and integrate directly with 5G networks.
- The latest of such solutions include: Wavelength from AWS, Azure Edge Zones from Microsoft and Anthos for Telecom from Google Cloud.
Several new telco-cloud collaboration announcements in the last few weeks:
- Telefonica signed a collaboration agreement with Microsoft for Azure Private Edge Zone, combining private 5G connections from Telefonica with Azure edge computing capabilities on the customer premise. (May 11)
- Vodafone expanded on existing work with Google Cloud to create a six-year partnership to jointly build a new integrated data platform to help Vodafone “more quickly offer its customers new, personalized products and services across multiple markets” (May 3)
- Dish Network, a greenfield open RAN-based operator in the U.S., agreed to build its 5G core network on AWS: Local Zones to support low latency, Outposts to extend capabilities to customer premises, Graviton2-based instances for compute workloads, and EKS to run containerized workloads. (April 21)
- Google Cloud and AT&T announced a collaboration to help enterprises take advantage of Google Cloud’s technologies and capabilities using AT&T network connectivity at the edge, including 5G. Additionally, AT&T and Google Cloud intend to deliver a portfolio of 5G edge computing solutions that bring together AT&T’s network, Google Cloud’s leading technologies, and edge computing to help enterprises address real business challenges.
The cloud service providers are leaving no stone unturned in their efforts to go after business in the telecom vertical. Moreover, they are also partnering with the traditional vendors to the telecom vertical to develop joint offerings. Nokia announced three such deals last quarter, one each with AWS, Azure and GCP. There are many other examples. NEC and AWS teamed up in 2019 on a mobile core solution, for instance, and Amdocs has collaborations in place with each of the big three. Just last month Amdocs won a digital transformation deal at Singapore’s M1 which leverages their Azure relationship.
Matt Walker, founder and Chief Analyst of MTN Consulting LLC wrote in a Fierce Telecom article: “Whether the cloud players are competitors, partners, suppliers or all of those, they’re going to continue to reshape telecom’s landscape for years to come.”
Telco’s Move from Virtual Network Functions (VNFs) to Cloud Native Core Networks:
With VNFs, many network operators (e.g. AT&T) have automated portions of their infrastructures. But to satisfy new performance demands and meet the needs of modern customers, telcos are now migrating to fully cloud-native infrastructures.
Cloud-native network functions (CNFs) are a new way of providing a required network functionality using containers.
CNFs are dynamic, flexible, and easily scaled, making them a favored solution in the transition to 5G. While a VM with its own operating system may consume several gigabytes of storage space, a container might only be tens of megabytes in size. Therefore, a single server can host more containers than VMs, significantly boosting data-center efficiency while reducing equipment, maintenance, power, and other costs.
In the near future, it is expected that many of the deployments on the road to 5G will consist of a mix of CNFs and VNFs as we are now at the transition stage of moving to fully cloud-native architectures.
Image courtesy of N-iX (a Ukraine and Poland based provider of software development outsourcing and professional services)
Here are some suggestions to facilitate telco’s move to cloud native core networks from N-iX:
- Decide on the cloud strategy: choose the best deployment model: public, private, or hybrid clouds, select the most suitable approach: single cloud or multi-cloud, settle on the cloud provider (s).
- Create a clear migration plan: it should include your goals, costs estimates, timelines, services and technology to use, etc.
- Choose a VNF migration strategy: define which network functions need to remain as VMs and which can be re-architected as cloud-native microservices.
- Assess and prioritize your apps, processes, and operations: understand app dependencies; categorize your apps into mission-critical applications, business-critical applications, customer-facing applications, and other non-critical apps; define operations that can be automated; simplify processes so that they consist of fewer steps.
- Adopt microservices architecture: transform your monolith architecture into a number of loosely coupled microservices to be able to quickly develop, test, and deploy new features and fixes without impacting other components of the application.
- Make use of containers: Containers make it easy to move applications between environments while retaining full functionality. They also make it possible to build and run scalable applications across public, private, and hybrid clouds.
- Leverage edge computing: edge computing is among the top telecom trends. Telcos should make use of edge networks to reduce latency and improve network performance by bringing workloads closer to the users who need to access them. As opposed to the content delivery network (CDN), which is considered to be the predecessor of edge computing and only stores cached data, edge networks, by contrast, can accommodate a wider array of functionality (they can store and process data in real-time) and device types.
Nokia is a strong supporter of Cloud Native. Here’s what they say:
For 5G, service providers need more from cloud. Cloud must be re-architected to cloud-native so that they can get breakthrough business agility in rapidly onboarding new apps and deploying & operating new services.
The scale of 5G brings many more devices and a very diverse mix of services, there’s no way legacy operations can keep up, they need much more automation, especially for slicing. 5G brings new performance demands, so the cloud needs to move towards the edge, for the sake of low-latency, localized reliability, and traffic steering; for that CSP need cloud-native’s efficiency.
Spending continued to consolidate in 2020 with the combined revenue of the top five public cloud service providers (Amazon Web Services (AWS), Microsoft (Azure), Salesforce.com, Google, and Oracle) increased their spending by 32% and captured 38% of the worldwide total market.
Thanks to an expanding portfolio of SaaS and SISaaS offerings, Microsoft now shares the top position with Amazon Web Services in the whole public cloud services market with both companies holding 12.8% revenue share for the year.
“Access to shared infrastructure, data, and application resources in public clouds played a critical role in helping organizations and individuals navigate the disruptions of the past year,” said Rick Villars, group vice president, Worldwide Research at IDC. “In the coming years, enterprises’ ability to govern a growing portfolio of cloud services will be the foundation for introducing greater automation into business and IT processes while also becoming more digitally resilient.”
While the overall public cloud services market grew 24.1% in 2020, consistent with the past four years, the IaaS and PaaS segments have consistently grown at much faster rates. This highlights the increasing reliance of enterprises on a cloud foundation built on cloud infrastructure, software defined data, compute and governance solutions as a Service, and cloud-native platforms for application deployment for enterprise IT internal applications. IDC expects spending on foundational cloud services (especially IaaS and PaaS) to continue growing at a higher rate than the overall cloud market as resilience, flexibility, and agility guide IT platform decisions.
“Cloud service providers are rapidly expanding their portfolio of infrastructure and platform services to address confidential computing, performance intensive computing, and hybrid deployment scenarios,” said Dave McCarthy, vice president, Cloud and Edge Infrastructure Services. “Extending these foundational cloud services to customer premises and communications networks enables a broader set of use cases than previously possible.”
“The high pace of growth in PaaS, IaaS, and SISaaS, which combined account for about half of the public cloud services market, reflects the demand for solutions that accelerate and automate the development and delivery of modern applications” said Lara Greden, research director, Platform as a Service. “As organizations adopt DevOps approaches and align according to value streams, we are seeing PaaS, IaaS, and SISaaS solutions become increasingly adopted and, at the same time, grow in the range of services and thus value they provide. Innovations in edge and IoT use cases are also contributing to the faster rates of growth in these markets.”
“SaaS applications are the largest and most mature segment of public cloud with 2020 revenues of $148 billion. Organizations across industries hastened the replacement of legacy business applications with a new breed of SaaS applications that is data-driven, intuitive, composable, and ideally suited for more distributed cloud architectures. Organizations looking for industry-specific applications can choose from a growing assortment of vertical applications. The SaaS apps market is dominated by a longtail of providers that account for 65% of the total market,” said Frank Della Rosa, research director, SaaS and Cloud Software.
Worldwide Public Cloud Services Revenue and Year-over-Year Growth, Calendar Year 2020 (revenues in US$ billions)
|Segment||2020 Revenue||Market Share||2019 Revenue||Market Share||Year-over-Year Growth|
|SaaS – System Infrastructure Software||$49.2||15.7%||$40.2||16.0%||22.4%|
|SaaS – Applications||$148.4||47.5%||$125.2||49.7%||18.6%|
|Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H20|
Looking at the segment results, a combined view of IaaS, SISaaS, and PaaS spending is relevant because it represents the foundational set of services that end customers and SaaS companies consume when running, modernizing, building, and governing applications on shared public clouds. In the combined IaaS, SISaaS and PaaS market, the top 5 companies (Amazon Web Services, Microsoft, Google, Alibaba, and IBM) captured over 51% of global revenues. But there continues to be a healthy long tail, representing nearly half the market total. These are companies with targeted use case-specific PaaS services or cross-cloud compute, data, or network governance services. The long tail is even more pronounced in SaaS, where customers growing focus on specific outcomes ensures that over two thirds of the spending is captured outside the top five.
According to Gartner, global public cloud spending is forecast to reach $332.3 billion in 2021, increasing by 23.1% from $270 billion in 2020. Growth in cloud spending can be attributed to increased adoption in technologies such as virtualization, edge computing and containerization.
“The events of last year allowed CIOs to overcome any reluctance of moving mission critical workloads from on-premises to the cloud,” said Sid Nag, research vice president at Gartner. “Even absent the pandemic there would still be a loss of appetite for data centers.
Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)
|Cloud Business Process Services (BPaaS)||46,131||50,165||53,121|
|Cloud Application Infrastructure Services (PaaS)||46,335||59,451||71,525|
|Cloud Application Services (SaaS)||102,798||122,633||145,377|
|Cloud Management and Security Services||14,323||16,029||18,006|
|Cloud System Infrastructure Services (IaaS)||59,225||82,023||106,800|
|Desktop as a Service (DaaS)||1,220||2,046||2,667|
BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service Note: Totals may not add up due to rounding.
Source: Gartner (April 2021)
As organizations mobilize for a massive global effort to produce and distribute COVID-19 vaccinations, SaaS based applications that enable essential tasks such as automation and supply chain is critical. Such applications continue to demonstrate reliability in scaling vaccine management, which in turn will help CIOs further validate the ongoing shift to cloud.
“It’s important to note that the usage and adoption of cloud that served enterprises well during the ongoing crisis will not look the same in the coming years,” said Mr. Nag. “It will further evolve from serving pedestrian use cases such as infrastructure and application migration, to those that combine cloud with technologies such as artificial intelligence, the Internet of Things, 5G and more.
“In other words, cloud will serve as the glue between many other technologies that CIOs want to use more of, allowing them to leapfrog into the next century as they address more complex and emerging use cases. It will be a disruptive market, to say the least.”
Cloud Computing Fuels Revenues and Profits for Big 3 Cloud Companies:
Amazon’s market-leading AWS cloud business grew revenue 32% in the first quarter, a faster pace than analysts had expected and accelerating from 28% growth in the fourth quarter. Microsoft’s revenue has skyrocketed since it invested billions of dollars to build a massive, interconnected cloud computing platform. Revenues for its Azure cloud offering were up 50% in the quarter. Meanwhile, revenues at Google’s Cloud business grew 46% this past quarter. However, Google continues to be a distant third to Amazon and Microsoft in the cloud business.
All three cloud providers are making a big push into edge computing and 5G “cloud native” core networks. That effectively makes them leaders in those new tech markets, with the traditional network providers playing a subservient role. For example, Dish Network will build its 5G core network using the AWS cloud infrastructure and services.
These big three cloud businesses are in reality massive cloud (i.e. Internet) resident data centers with high-speed interconnections (Data Center Interconnects). There’s no reason to think growth will slow any time soon. Were they stand-alone businesses, they would be the three largest enterprise-software entities in the world. And they design their own compute servers, making them the world’s largest global computer companies too!
While cloud services boomed in the past year, Gartner suggests that spending on cloud might take a different note in 2021 and 2022 as enterprises shift away from infrastructure and application migration towards advanced applications integrating AI and IoT and 5G.
In the first quarter of 2021, research and analytics firm Canalys reported that global cloud services infrastructure spending grew to $41.8 billion to represent a 35% year-on-year increment and 5% quarter-on-quarter growth.
Vodafone and Google Cloud today announced a new, six-year strategic partnership to drive the use of reliable and secure data analytics, insights, and learnings to support the introduction of new digital products and services for Vodafone customers simultaneously worldwide.
In a significant expansion of their existing agreement, Vodafone and Google Cloud will jointly build a powerful new integrated data platform with the added capability of processing and moving huge volumes of data globally from multiple systems into the cloud.
The platform, called ‘Nucleus‘, will house a new system – ‘Dynamo‘ – which will drive data throughout Vodafone to enable it to more quickly offer its customers new, personalized products and services across multiple markets. Dynamo will allow Vodafone to tailor new connectivity services for homes and businesses through the release of smart network features, such as providing a sudden broadband speed boost.
Capable of processing around 50 terabytes of data per day, equivalent to 25,000 hours of HD film (and growing), both Nucleus and Dynamo, which are industry firsts, are being built in-house by Vodafone and Google Cloud specialist teams. Up to 1,000 employees of both companies located in Spain, the UK, and the United States are collaborating on the project.
Vodafone has already identified more than 700 use-cases to deliver new products and services quickly across Vodafone’s markets, support fact-based decision-making, reduce costs, remove duplication of data sources, and simplify and centralize operations. The speed and ease with which Vodafone’s operating companies in multiple countries can access its data analytics, intelligence, and machine-learning capabilities will also be vastly improved.
By generating more detailed insight and data-driven analysis across the organization and with its partners, Vodafone customers around the world can have a better and more enriched experience. Some of the key benefits include:
- Enhancing Vodafone’s mobile, fixed, and TV content and connectivity services through the instantaneous availability of highly personalized rewards, content, and applications. For example, a consumer might receive a sudden broadband speed boost based on personalized individual needs.
- Increasing the number of smart network services in its Google Cloud footprint from eight markets to the entire Vodafone footprint. This allows Vodafone to precisely match network roll-out to consumer demand, increase capacity at critical times, and use machine learning to predict, detect, and fix issues before customers are aware of them.
- Empowering data scientists to collaborate on key environmental and health issues in 11 countries using automated machine learning tools. Vodafone is already assisting governments and aid organisations, upon their request, with secure, anonymised, and aggregated movement data to tackle COVID-19. This partnership will further improve Vodafone’s ability to provide deeper insights, in accordance with local laws and regulations, into the spread of disease through intelligent analytics across a wider geographical area.
- Providing a complete digital replica of many of Vodafone’s internal support functions using artificial intelligence and advanced analytics. Called a digital twin, it enables analytic models on Google Cloud to improve response times to enquiries and predict future demand. The system will also support a digital twin of Vodafone’s vast digital infrastructure worldwide.
- In addition, Vodafone will re-platform its entire SAP environment to Google Cloud, including the migration of its core SAP workloads and key corporate SAP modules such as SAP Central Finance.
Johan Wibergh, Chief Technology Officer for Vodafone, said: “Vodafone is building a powerful foundation for a digital future. We have vast amounts of data which, when securely processed and made available across our footprint using the collective power of Vodafone and Google Cloud’s engineering expertise, will transform our services, to our customers and governments, and the societies where they live and serve.”
Thomas Kurian, CEO at Google Cloud, commented: “Telecommunications firms are increasingly differentiating their customer experiences through the use of data and analytics, and this has never been more important than during the current pandemic. We are thrilled to be selected as Vodafone’s global strategic cloud partner for analytics and SAP, and to co-innovate on new products that will accelerate the industry’s digital transformation.”
Revenues at Google’s Cloud business grew 46% this past quarter. However, Google continues to be a distant third to Amazon and Microsoft in the cloud business.
All data generated by Vodafone in the markets in which it operates is stored and processed in the required Google Cloud facilities as per local jurisdiction requirements and in accordance with local laws and regulations. Customer permissions and Vodafone’s own rigorous security and privacy by design processes also apply.
On the back of their collaborative work, Vodafone and Google Cloud will also explore opportunities to provide consultancy services, offered either jointly or independently, to other multi-national organizations and businesses.
The platform is being built using the latest hybrid cloud technologies from Google Cloud to facilitate the rapid standardization and movement of data in both Vodafone’s physical data centers and onto Google Cloud. Dynamo will direct all of Vodafone’s worldwide data, extracting, encrypting, and anonymizing the data from source to cloud and back again, enabling intelligent data analysis and generating efficiencies and insight.
Cisco Systems is extending the concept of software-as-a-service (SaaS) technology with the introduction of Cisco Plus, which is a network-as-a-service (NaaS) offering focused on cybersecurity and hybrid cloud services. The new service offering can also provide computing-as-a-service and data-storage-as-a-service.
- Cisco announcing plans to lead the industry with new Network-as-a-Service (NaaS) solutions to deliver simpler IT and flexible procurement for customers looking for greater speed, agility and scale
- Cisco also reveals plans to help customers build a SASE foundation today (with Cisco SD-WAN and security) with as-a-service offer coming soon
- Cisco Plus offers include flexible consumption for data center networking, compute and storage now, and commits to delivering the majority of its portfolio as-a-service over time
“I believe every organization would benefit from simplifying powerful technology,” said Todd Nightingale, Senior Vice President and General Manager, Enterprise Networking and Cloud, Cisco. “Network-as-a-service is a great option for businesses wanting to shift to a cloud operating model without a heavy lift. Cisco is leading the industry in its approach with Cisco Plus. Together with our partners, we intend to offer the majority of our technology portfolio in the simplest, most flexible way: cloud-driven, cloud-delivered, cloud-managed and as-a-service.”
“Network-as-a-service delivery is a great option for businesses wanting to shift to a cloud operating model that makes its easy and simple to buy and consume the necessary components to improve and grow their businesses,” said James Mobley, senior vice president and general manager of Cisco’s Network Services Business Unit.
Cisco Plus NaaS solutions will provide:
- Seamless and secure onramps to applications and cloud providers
- Flexible delivery models, including pay-per-use or pay-as-you-grow options
- End-to-end visibility from the client to the application to the ISP
- Unified policy engine to ensure the right users have access
- Security across everything, not bolted on as another point solution
- Real-time analytics providing AI/ML-driven insights for cost and performance tracking
- API extensibility across the technology stack
- Partners layering additional value and delivering their services faster
The NaaS rollout will first focus on a cloud-based solution as-a-service for secure access service edge (SASE). The Cisco SASE offer currently available enables customers to easily leverage future services with investment protection. Cisco is planning limited release NaaS solutions later this calendar year that will unify networking, security and visibility services across access, WAN and cloud domains.
While Cisco plans in the next few years to introduce what will likely be many service options under Cisco Plus, for now it is introducing two flavors. The first, Cisco Plus Hybrid Cloud, includes the company’s data-center compute, networking, and storage portfolio in addition to third-party software and storage components all controlled by the company’s Intersight cloud management package. Customers can choose the level of services they want for planning, design and installation Mobley said.
Cisco Plus Hybrid Cloud, which will be available mid-year, offers pay-as-you-go with delivery of orders within 14 days, Mobley said.
“As enterprises recommit to their digital transformation strategies, they are increasingly looking for more cloud-like, flexible consumption models for procuring and managing their IT, cloud and network infrastructure. These “as-a-service” deployment options provide much needed flexibility and scalability, along with a simplification of network deployments and ongoing operations. Cisco’s transition to as-a-service via Cisco Plus shows the company is committed to meeting customer needs for predictable costs, cloud-like agility, first-class security, and more.
“With Cisco Plus, it’s taking NaaS and its hybrid cloud offerings to the next level by including hardware and the full portfolio into this as-a-service offer, that provides cloud-like simplicity and flexibility of consumption on one end, and on the other, it provides a rich set of intelligent operational enhancements that go a long way to deliver enhanced IT experiences and outcomes. This has also been made possible by increased embedded intelligence now available in network and IT hardware and software, coupled with advanced telemetry options in many of these platforms.”
— Rohit Mehra, Vice President of Network Infrastructure, IDC.
“With Cisco Plus, we couldn’t be more excited that Cisco is diving deeper into the as-a-service era, helping us in our transformation to deliver IT as a service to our customers. In this way, we are better equipped to help our customers simplify their IT operations, and free up resources to invest in innovation of their core business.” — Jeffrey den Oudsten, CTO Office Solutions Director, Conscia Nederland
“There’s always been a push and pull in how to operationalize and finance IT infrastructure. Cisco Plus is the matching pair to a cloud operating model. Delivering Cisco Plus across the majority of Cisco’s portfolio helps us at Insight to further deliver the transformation to a cloud operating model our clients want. With Cisco Plus, organizations can not only operate their infrastructure as a cloud, but also consume it in a similar fashion, enabling a true hybrid, multi-cloud.” — Juan Orlandini, Chief Architect Cloud + Data Center Transformation, Insight
“At Presidio, we have seen this shift coming for a long time. Our customers are very clear: They want to consume reliable, best of breed infrastructure with consumption-based financial models. And with the launch of Cisco Plus, Presidio and Cisco in partnership are doing just that.” — Raphael Meyerowitz, Engineering VP, Office of the CTO, Data Center, Presidio
The second Cisco Plus service, which did not have an availability timeframe, will feature the company’s secure access services edge (SASE) components, such as Cisco’s SD-WAN and cloud-based Umbrella security software.
Security-as-a-service models offer many advantages for organizations including offloading the maintenance of hundreds or thousands of firewalls and other security appliances, said Neil Anderson, senior director of network solutions at World Wide Technology, a technology and supply-chain services provider.
“With SASE, enterprises can consume that from the cloud and let someone else take care of the toil, which frees up their security team to focus on threat vectors and prevention,” he said.
While the strategy behind delivering network components as a cloud-based service has been around for a few years, it is not a widely used enterprise-customer strategy. Cisco’s entry into NaaS is likely to change that notion significantly.
“Cisco has been on this journey for a few years now—starting with providing subscription-based offers for many of its software solutions—while working on simplifying and enriching the licensing and consumption experience,” Mehra said. “Customers understand and have embraced cloud-like IT-consumption models that are typically subscription-based and provide scalability and other on-demand capabilities,” Mehra said.
Terms such as NaaS are still largely new in an enterprise context to most IT practitioners, although they do understand that operational simplicity and flexibility will be crucial to their success in digital transformation, Mehra said.
While NaaS might be relatively new to some customers, others are already utilizing it, other experts said. For remote-access, customers are more than ready, and it’s starting to go mainstream, Anderson said.
“For connectivity to the cloud edge, it’s coming very soon, and the adoption of SASE models for security will accelerate the demand for NaaS services,” he said. “NaaS in the campus will probably take a bit longer, but we see that coming. Some customer segments, like retail, are probably ready today, while others like global financials will take longer to adopt.”
Networking is no longer just about connecting things within private networks because there is a world of networking to and between clouds to account for, Anderson said. “For example, with private WANs, I typically networked my sites to my other sites like a private data center. Now, I need to network my sites to cloud services, and I may be doing so with public-internet services,” Anderson said.
NaaS for the campus network is another use case on the horizon, he said. “To build campus networks in the past, we had access, distribution, and core layers, and the core spanned my campus and sometimes private data center. It was designed to aggregate traffic from users into my private data center,” Anderson said. “Today, much of the traffic is heading to the cloud—Office 365 is the tipping point for many organizations—so building a core network may not be necessary. I see a new architecture emerging where the goal is to tie each site, including each building of a campus, to the internet directly to connect users to cloud and enable traffic to [reach] the cloud sooner, ultimately improving the user experience.”
Naas is by no means a slam dunk, and there will be challenges for enterprises that use it. “For medium to large organizations with significant investments in existing remote, branch, campus and data-center networking network-security infrastructure, migrating to NaaS will be difficult and time consuming. Multi-vendor environments will further complicate the matter,” stated principal analyst at Doyle Research, Lee Doyle.
Widespread adoption of enterprise NaaS will occur slowly over the next five to 10 years Doyle stated. The best fits for adoption now are greenfield sites, temporary locations, and small branch offices. NaaS offerings will also be attractive to network remote, home and mobile workers who need secure, reliable application performance. Enterprise networks with the requirement to move traffic at high speeds on-site would be more difficult to deliver as a service, Doyle stated.
Key challenges, besides understanding of what NaaS will help deliver, face IT practitioners who are the potential customers as well as vendors and service providers, Mehra said.
“On the customer aspects, what we’ll need to watch will be the changing role of IT and how it can optimally consume these technologies as a service while retaining overall control of its IT environment,” Mehra said. “On the provider side, visibility across issues such as operational flexibility and simplicity will be one area to consider, while another will be the direction the industry takes on what metered-service options it makes available for its clients.”
The challenges depend on the industry and security requirements, WWT’s Anderson said. “If the organization is in a heavily regulated industry like financial, healthcare, or federal [government], one challenge will be trusting the integrated security needed,” Anderson said. “For example, there would be fewer challenges to enable everyone to connect to the internet, akin to a giant hotspot, but to adopt more of a zero-trust model, where you may need to securely isolate sessions and devices from one another, will require building trust in some integrated security technologies.”
“What Cisco is doing is very interesting because what NaaS is out there has been limited to mostly the WAN world but once you start targeting the enterprise that’s where the challenges are because customers still have to move bits and everything can’t be in the cloud,” Doyle said. “Instead of being in the first inning of a game we are really just now defining the rules of the game, so there’s a long way to go.”
Cloud computing adoption was expanding rapidly even before the COVID-19. The urgent changes to business operations and procedure caused organization plans and adoption to increase at an even greater rate.
According to Flexera’s 2021 State of the Cloud report, organizations are rapidly progressing their journey to cloud. The report found that public cloud spending is now a significant line item in IT budgets, especially among enterprise organizations (31%) that said they spent more than $12 million a year on public cloud services.
The survey polled 750 “cloud decision-makers and users” from organizations ranging from 100 employees to more than 10,000 employees around the world and across a cross-section of organizations. It specifically asked about services run on AWS, Microsoft Azure, GCP, VMware Cloud on AWS, IBM Public Cloud, Oracle Infrastructure Cloud, and Alibaba Cloud.
AWS continues to be the leading cloud service provider with 79% of enterprise respondents saying they use the platform and 9% saying they are “experimenting” with AWS. Microsoft’s Azure was used by 76% of respondents. 11% of respondents said they are experimenting with Azure.
Azure adoption increased among all respondents in 2020. It increased from 63% last year to 73% this year. By comparison, AWS’ year-over-year growth was just 1 percentage point to 77%.
While AWS and Azure are compete for the #1 cloud service provider, GCP saw the strongest growth among the top three, growing from 34% usage last year to 49% usage this year. Additionally, GCP and VMware Cloud on AWS reported the highest number of respondents experimenting on their platforms, which the Flexera report says could drive future cloud adoption.
The following are some of the responses of interest:
Enterprises embrace multi-cloud:
• 92 percent of enterprises have a multi-cloud strategy; 80 percent have a hybrid cloud strategy
• 49 percent silo workloads by cloud, with 45 percent integrating data between clouds
• Only 42 percent of all participating organizations use multi-cloud management tools
• Respondents use an average of 2.6 public and 2.7 private clouds
Public cloud adoption continues to accelerate:
• 36 percent of enterprises spend more than $12 million per year on public clouds
• 55 percent of enterprise workloads are expected to be in a public cloud within twelve months
• 90 percent of respondents who answered a question about COVID-19 expect cloud use to exceed plans due to the pandemic
• The top challenge in cloud migration is understanding application dependencies
Understanding cloud initiatives and metrics:
• 61 percent of organizations plan to optimize cloud costs in 2021, making it the top initiative for the fifth year in a row
• 59 percent of organizations plan to focus on cloud migration
• 76 percent of organizations use cost efficiency and savings to measure cloud progress
Organizations are taking a centralized approach to cloud:
• 77 percent of enterprises have a central cloud team or cloud center of excellence (CoE)
• 54 percent of cloud teams are responsible for governing infrastructure-as-a-service (IaaS)/ platform-as-a-service (PaaS) usage and costs
• 63 percent of enterprises reported using cloud managed service providers (MSPs) to manage public cloud use
The Flexera survey found that it remains difficult to map all of the relationships across applications, hardware, and networking devices for each service, especially in a rapidly evolving environment. Just over half of respondents reported understanding application dependencies as the top cloud migration challenge.
Selected Charts from the Flexera 2021 Cloud Report:
IBM’s Cloud Satellite service is now in generally available (GA) orbit. The service extends the IBM Cloud control plane to run virtually anywhere, whether that be on commodity hardware, some edge device, or inside another public cloud.
IBM manages Cloud Satellite deployments, which is different than from most other software-defined hybrid cloud platforms. It provides an administrative control plane and as-a-service operation of IBM cloud services using a Kubernetes (K8s) cluster.
IBM explained that the GA push now makes the platform available to all customers. It allows users to run their IBM Cloud service on-premises or in edge locations managed through a single pane of glass in the public cloud.
IBM’s not alone in looking to data as one of the first services to be offered on hybrid. Amazon Outposts offers RDS for MySQL and PostgreSQL; Azure Arc data services include SQL Managed Instance and PostgreSQL Hyperscale; while Google recently added BigQuery Omni to its Anthos software-defined hybrid cloud as part of a multi-cloud and edge play.
The rationale as to why data services are so elemental to hybrid cloud is that, for many organizations or use cases, data needs to stay local for reasons ranging from latency issues to data residency requirements. OpenShift as a service will provide a route for customers seeking to build their own private cloud K8s environments. IBM is announcing that this will also be early on the list.
As part of this collaboration, customers will be able to:
- Deploy applications across more than 180,000 connected enterprise locations on the Lumen network to provide a low latency experience
- Create cloud-enabled solutions at the edge that leverage application management and orchestration via IBM Cloud Satellite
- Build open, interoperable platforms that give customers greater deployment flexibility and more seamless access to cloud native services like AI, IoT and edge computing
IBM said it has more than 65 “ecosystem partners” building services to run in the Cloud Satellite environment. Partner include Cisco, Dell Technologies, and Intel. They intend to develop cloud services which can run across the multi-cloud and premises platform services include storage, networking, and server options.
“IBM is working with clients to leverage advanced technologies like edge computing and [artificial intelligence], enabling them to digitally transform with hybrid cloud while keeping data security at the forefront,” said Howard Boville, Head of IBM Hybrid Cloud Platform, in a statement. He added that “clients can securely gain the benefits of cloud services anywhere, from the core of the data center to the farthest reaches of the network.”
IBM highlighted three partners, among them Lumen Technologies and Portworx, that are both heavily leveraging 5G to deliver PaaS services for edge computing, and F5, which is developing vertical solutions for banking institutions.
IBM noted that Lumen Technologies (formerly CenturyLink) was using the hybrid cloud platform to deliver its Edge Compute service. That capability relies on Red Hat’s OpenShift that runs within Cloud Satellite to host the applications running close to Lumen’s edge locations. Lumen touts that it has approximately 450,000 route fiber miles in its network spread across more than 60 countries.
Lumen struck a similar deal earlier this year with VMware that will see both vendors “fast-track the design, development, and delivery of edge computing and more secure, work-from-anywhere solutions.”
Does anyone remember IBM’s Satellite Business Systems (SBS) of the late 1970s? It was a pioneer in delivering data services to businesses as a precursor of the Internet.
IBM Cloud Satellite: Build faster. Securely. Anywhere. Now generally available. To get started, visit: https://www.ibm.com/cloud/satellite.
For more information on how IBM is working with its ecosystem of partners, visit: www.ibm.com/cloud/blog/ibm-partner-ecosystem-and-cloud-satellite
For more information on IBM Cloud Pak for Data as a Service, visit:
For more information on how IBM is helping developers build on IBM Cloud Satellite, visit:
For more information on how IBM Cloud Satellite is supported by IBM Storage, visit: www.ibm.com/blogs/systems/improve-it-infrastructure-with-ibm-hybrid-cloud-storage-for-ibm-cloud-satellite
For more information on IBM Global Technology Services capabilities for IBM Cloud Satellite, visit: ibm.biz/PC_IaaS
To learn more about how Lumen has integrated Cloud Satellite across 180K global edge locations, visit: https://blog.lumen.com/speeding-innovation-at-the-edge-with-lumen-technologies-and-ibm-cloud-satellite
For further information visit: www.ibm.com/cloud/
Amazon, Microsoft, and Google are competing to win a part of the U.S. federal government’s $7 billion cloud spending. The Biden administration’s IT push is going to create opportunity for the major cloud providers.
AWS still has the lead, but Microsoft is so popular one analyst called it an ‘agency’ of the Pentagon. Google is also ramping up its cloud management tool Anthos and betting on AI for defense contracts.
The federal government has been investing in cloud computing for years — starting with Obama’s Cloud First policy in 2010 all the way to Trump’s Cloud Smart strategy in 2018. But as the pandemic has accelerated the pace of technological adoption and change, the need for cloud has become even more acute, especially for federal agencies that don’t yet have it. Biden’s proposed $1.9 trillion stimulus package included $10 billion for tech initiatives — underscoring their importance to the nation’s recovery — and signaling to government contractors that more federal dollars may be going their way. (Though the latest version of the package had much of that funding cut, lawmakers are actively seeking to add it back to future bills.)
Analysts estimate the federal government spent $6.6 billion on cloud in the 2020 fiscal year, an increase from $6.1 billion the previous year, and that number will grow.
Shawn McCarthy, research director for IDC government insights, told Insider he expected the federal government’s cloud spend to increase by 7.1% from fiscal year 2020 to 2021. Marquee contracts like the Department of Defense’s $10 billion deal with Microsoft to build the Joint Enterprise Defense Infrastructure (JEDI) cloud have drawn even more attention to the federal cloud market, which analysts say is an opportunity for Amazon, Microsoft, and Google to flex their strength.
The government needs their expertise in cloud computing and, increasingly, their support for emerging technologies like artificial intelligence and 5G.
Of the major cloud providers, analysts said that Amazon Web Services is considered the leader in the overall cloud market, and the same holds true in the public sector. But Microsoft has caught up in the federal market, especially with wins like the JEDI cloud contract, meanwhile Google is taking a different tack — betting on multi-cloud management and AI. Here’s a closer look at how the three big clouds stack up in the federal sector. Amazon has a huge head start, but it can’t be complacent Andy Jassy AWS CEO Andy Jassy, who is set to become Amazon CEO, helped oversee the cloud unit’s rise.
Mike Blake/Reuters Analysts agreed that Amazon is the one to beat in the public sector cloud market, just as it is within the larger industry. “AWS had the biggest lead out of the gate,” McCarthy said, and it has “an extremely deep bench of third-party providers that are available via their dedicated government solutions marketplace.” Amazon landed its first major deal with the government in 2013, when it won a $600 million contract to build a custom cloud for the CIA. At the time, cloud computing was considered less secure than local servers — yet the Amazon deal set a precedent, showing that Silicon Valley’s cloud innovation could fit the federal government’s needs, and led AWS to become the first commercial cloud authorized to house all levels of classified government data. But in 2019, the CIA issued a new cloud contract worth billions, and jointly awarded the deal to AWS, Microsoft, Google, Oracle, and IBM — signaling a shift away from its previous single-cloud approach, and ending intelligence agencies’ reliance on a sole Silicon Valley cloud giant.
In a sign of things to come, Amazon lost the JEDI cloud contract to Microsoft the same year. Though JEDI’s future remains in flux because of Amazon’s ongoing legal protest, analysts said it proved Microsoft’s ascendance in the sector. Read more: As Pentagon warns it could abandon its $10 billion JEDI cloud with Microsoft, analysts say AWS could benefit.
“I think last year was kind of characterized by Microsoft catching up to Amazon,” said Chris Cornillie, a federal market analyst at Bloomberg Government.
Microsoft caught up to AWS, thanks to its cloud software Scott Guthrie Scott Guthrie, Microsoft’s executive vice president of cloud and AI, oversees Azure and was once described by an analyst as a “cloud visionary.” Stephen Lam/Getty Images Analysts also agreed that Microsoft isn’t catching up to Amazon anymore — they’re nearly neck-and-neck in the federal market now. McCarthy said Microsoft succeeded “thanks to the popularity of Microsoft 365 and Microsoft Azure.” Microsoft 365 includes Office 365, the company’s line of productivity software, while Azure is its cloud computing service that more directly competes with AWS. Amazon doesn’t have a direct competitor to Microsoft 365, and focuses instead on its core infrastructure cloud platform. Cornillie told Insider Microsoft had done a good job of “leveling the playing field” with its JEDI win and a number of smart investments: working with OpenAI, linking up with Oracle for data interoperability, and a partnership with AT&T to facilitate 5G.
Last year, it launched new Azure Government cloud capabilities and announced it had achieved the highest authorization for handling sensitive government data, finally matching AWS. Within the Pentagon, which has the largest IT budget of any federal agency, one analyst said Microsoft is so entrenched that it has “basically become an agency of the Department of Defense.”
Microsoft 365 was chosen as the department’s sole software suite in a $4.4 billion deal called the Defense Enterprise Office Solutions (DEOS) contract, first awarded in 2019 and recently fast-tracked because of the pandemic. “Microsoft has really benefited in a lot of ways from the COVID-19 pandemic response effort,” Cornillie said, citing that it was also picked for a separate Pentagon initiative which rapidly deployed Microsoft Teams in the department’s Commercial Virtual Remote environment.
Microsoft 365 offers the company a convenient way to sell Azure cloud, plus other services like consulting and maintenance as a bundle, he said. And although the scope of Microsoft’s entanglement in the aftermath of the SolarWinds cyberattacks is still unfolding, analysts said it likely won’t suffer much reputational damage within the federal government.
Alex Rossino, a senior principal research analyst at government contracting research firm Deltek, told Insider that as the government increasingly pushes its security burden onto vendors, big cloud players will actually benefit. “The large cloud providers especially have the deep pockets to be able to make sure they provide the best kind of upgraded security,” he said.
“So I think that’s a selling point for them when it comes to the federal government; they can actually use the SolarWinds example as a way to say, ‘Well, look, we can make sure that doesn’t happen.'” Google is banking on AI and multi-cloud Google Cloud CEO Thomas Kurian at Google Cloud Next 2019 Google Cloud CEO Thomas Kurian has been credited with shoring up its enterprise business, and could help its play for government contracts. Insider Intelligence Though Google is still catching up to Amazon and Microsoft, and only recently spun up a large-scale dedicated government cloud, they are “a known entity and should become competitive,” said McCarthy.
Analysts also said Google is leveraging its strength in AI, a field the government is very interested in, and pushing Anthos, its tool for managing multiple clouds, to break into the federal market. Some big hires are evidence of this play: Cornillie said Google Cloud CEO Thomas Kurian, who has been running the unit with strategies inspired by his former employer Oracle, would help build up its enterprise business, while Joshua Marcuse, who heads the global public sector team and was recruited from the Defense Innovation Board (the Pentagon advisory board that was led by former Google CEO Eric Schmidt) would help with its AI push. Marcuse previously led development of the Pentagon’s ethics AI principles, though that approach has since been criticized by the AI community and former Google AI researcher Meredith Whittaker for lacking accountability. Google’s renewed interest in working with the Defense Department comes after it dropped out of bidding for the JEDI contract in 2018, following employee protests over a controversial AI project called Project Maven. Google is hoping for a fresh start under Biden, and the Pentagon is too.
Cornillie said Google now views its AI prowess as helping open the door to new cloud contracts — taking a “if you want AI capabilities out of the box, it works best in our cloud” approach. However, its ambitions are limited by the fact that it doesn’t hold all security certifications required by the sector, he said.
Bringing in Todd Schroeder from Salesforce to lead global public sector digital strategy was another “smart move,” Cornillie said. Schroeder has emphasized multi-cloud, open platforms, and AI as the future for federal cloud, which play to Google’s strengths. In 2019, Google introduced its Anthos product, which lets customers build and manage their applications across Google Cloud, AWS, and Microsoft Azure.
Banking on multi-cloud as the future (a reasonable bet, as the Department of Homeland Security just issued a $3.4 billion multi-cloud contract), Google is hoping its cloud management tool will become indispensable.
A new $3.4 billion DHS cloud contract could kick off a fierce battle between cloud giants like Amazon and Microsoft, analysts say. There are signs its product is sticking: Google has already done some pilots with Customs and Border Protection to optimize workloads across Azure, AWS, and Salesforce, Cornillie said, and the agency is now competing a large cloud migration contract that has Anthos’s multi-cloud management function explicitly written in.
IBM, Oracle, and smaller players are not to be discounted are IBM and Oracle, analysts said. They’ve also been steadily making progress, but “for reasons of security certifications and for reasons of the maturity of their tech, they’re still looking for niche components or niche contracts,” Cornillie said. “They haven’t been able to land any really big fish yet.”
Both companies bid for the JEDI contract, and both lodged formal protests after being eliminated from the running. But they haven’t given up on the market: Oracle made its Cloud Marketplace available for government customers to run software in its cloud in January, while IBM acquired open-source cloud provider Red Hat for $34 billion in 2018 — a move analysts at the time were excited by, saying IBM could make inroads as a hybrid cloud provider.
Rossino said smaller cloud players could enter the U.S. federal government’s cloud market by providing cloud management services:
“If they have capabilities that allow for the automation of cloud management, that’s really important too,” he said. But still, it’s a strategy borne of necessity rather than creativity. “The Microsoft’s, Amazon’s, they’ve already locked up the infrastructure market. There’s almost excess capacity out there,” he added.
Telus Selects Google Cloud in 10 year Deal:
Google Cloud on Tuesday announced a new, 10-year strategic partnership with Telus, the Canadian telecommunications company. The two companies plan on collaborating on new services and products for a handful of key industries, including healthcare, agriculture, security and connected home. Telus also plans to modernize its own IT and network with the help of the Google Cloud Platform.
It’s the latest deal to showcase Google’s efforts to cultivate more cloud business within the telecom sector. Last year, Google outlined a multi-pronged pitch to the telecommunications industry that includes industry-specific solutions like Anthos for Telecom.
Together, Google and Telus plan to develop services and products that use AI to better leverage data within specific verticals. For instance, a couple areas of focus include new collaboration solutions for healthcare providers, as well as supply chain traceability tools for the food and agriculture sector.
Meanwhile, Telus’ own wireless and wireline services will get an upgrade as part of the deal. Leveraging Anthos, Google Cloud’s managed application platform, Google will partner with Telus to deliver 5G services and Multi-Access Edge Computing (MEC). Telus also plans on using Google Cloud Contact Center AI to upgrade its customer service.
“Our strategic partnership with Google will propel our digital leadership across the communications technology, healthcare and agriculture sectors, whilst amplifying our Customers First priority, redefining how service is delivered in Canada and globally,” Telus CEO and President Darren Entwistle said in a statement.
Oracle has expanded its hybrid cloud portfolio with Oracle Roving Edge Infrastructure, a new offering that brings core infrastructure services to the edge with Roving Edge Devices (REDs), namely ruggedized, portable and scalable server nodes. Using Oracle Roving Edge Infrastructure, organizations can run cloud workloads wherever they need them, even in remote locations. The new service is part of Oracle’s hybrid cloud portfolio.
The devices are effectively a mobile extension of a customer’s Oracle Cloud Infrastructure (OCI) environment. REDs can run as a single node or in clusters of five to 15 nodes. The hardware inside a RED device includes 40 CPUs, an Nvidia T4 GPU, 512 GB RAM and 61 TB of storage. The devices start at $160 per node per day.
With a RED device, a customer should be able to run cloud applications and workloads in the field, including machine learning inference, real-time data integration and replication, augmented analytics and query-intensive data warehouses.
A customer can order a RED from the Oracle Cloud console, provision it — adding VMs and object storage from the console — and have it shipped. Even in remote areas where connectivity is an issue, customers can use the RED to connect to local sensors and execute applications.
There are some clear use cases for the RED devices, such as in the oil and gas industry, where organizations may currently be relying on bespoke servers. And Oracle has already signed up the US military as an early customer.
The devices should also facilitate new use cases for cloud applications, Ross Brown, VP for Oracle Cloud Infrastructure, said to ZDNet. Customers, he said, “are coming to us with things like 5G-connected applications where processing on local makes a lot of sense. This notion of high-speed data collection and high-speed data capture in a remote metro area, across a city or whatnot, these become good use cases for” the RED.
While Oracle’s cloud infrastructure business still trails far behind Amazon Web Services, Microsoft Azure and Google, it’s picking up momentum. Oracle landed some major customers in 2020, including Zoom.
The database giant plans to catch up in the cloud in part by engineering hardware purpose-built for enterprise applications to run in the cloud — RED devices are an example of that, Brown said.
Last year, Oracle expanded its hybrid cloud portfolio with Dedicated Region Cloud@Customer — a fully-managed service brings all of Oracle’s public cloud services directly to a customer data center. Its hybrid offerings also include Oracle Exadata Cloud@Customer and Oracle VMware Cloud Solution.
The software company currently has 29 Oracle Cloud regions with plans to have 36 live by the mid-2021. They no longer talk about Sun Micro or the SPARC microprocessor that was supposed to give them a competitive edge.
Key themes for 2021 include:
- The COVID-19 pandemic and the move to remote work and video conferencing are accelerating moves to the cloud. Enterprises increasingly are seeing the cloud as a digital transformation engine as well as a technology that improves business continuity. As work was forced to go remote due to stay-at-home orders, tasks were largely done on cloud infrastructure. Collaboration tools such as Microsoft Teams and Google Meet became cogs in the companies’ broader cloud ecosystem. Zoom not only lands subscription revenue, but also runs on cloud providers such as AWS and Oracle.
- Multicloud is both a selling point and an aspirational goal for enterprises. Companies are well aware of vendor lock-in and want to abstract their applications so they can be moved across clouds. The multicloud theme is being promoted among legacy vendors that have created platforms that can plug into multiple clouds — often with a heavy dose of VMware or Red Hat. (See: Multi-Cloud: Everything you need to know about the biggest trend in cloud computing and Multicloud deployments become go-to strategy as AWS, Microsoft Azure, Google Cloud grab wallet share),
- The game is about data acquisition. The more corporate data that resides in a cloud the more sticky the customer is to the vendor. It’s no secret that cloud computing vendors are pitching enterprises on using their platforms to house data for everything from analytics to personalized experiences.
- Artificial intelligence, analytics, IoT, and edge computing will be differentiators among the top cloud service providers — as will serverless and managed services.
- Every flavor of cloud vendor wants to be a management layer to manage your other clouds. Public cloud vendors such as Google Cloud Platform and AWS have offerings to manage various cloud services. Traditional enterprise vendors such as Dell and HPE do too. Which platform becomes that “single pane of glass” for cloud management will be positioned well.
- Sales tactics that play to fear, uncertainty, and doubt will be the norm. Right around AWS re:Invent, there appeared to be a mindshare battle in the press as the big three sniped at each other across multiple industries. Google Cloud has been hiring executives to sell into industries and has ramped its Anthos hybrid cloud effort to close its AWS and Azure sales gap. (See: What is cloud computing? Everything you need to know)
- There’s a sales war happening by industry. Cloud providers are going vertical to corner industries. Gartner’s Magic Quadrant report on public cloud providers noted that the “capability gap between hyperscale cloud providers has begun to narrow; however, fierce competition for enterprise workloads extends to secondary markets worldwide.” Indeed, the financials from AWS, Microsoft Azure, and Google Cloud have all been strong.