Spending on sovereign cloud infrastructure in Europe will triple from 2025 to 2027, according to Gartner, with a fifth of workloads shifting to local clouds.

Analysis from the consultancy suggests worldwide sovereign cloud Infrastructure as a Service (IaaS) spending will hit $80 billion this year — up 35% from 2025.

The projection comes as Europe pushes for digital sovereignty amid geopolitical concerns and worries about overreliance on US-based big tech providers.

But it's not just Europe and the UK. Indeed, between 2025 and 2026, Gartner said European sovereign cloud spend will climb 83% from $6.9bn to $12.6bn – that growth rate is pipped by both the Middle East and Africa (89%) and the region Gartner dubs Mature Asia/Pacific (87%).

While European spending remains high – and is tipped to triple over three years to top North America at $23.1bn – the region with the highest spend on sovereign cloud remains China.

Spending in the region came in at $37.5bn spent in 2025, and Gartner forecasts this to rise to $48.4bn in 2026 and $58.5bn in 2027, with growth around 20%.

"As geopolitical tensions rise, organizations outside the US and China are investing more in sovereign cloud IaaS to gain digital and technological independence," said Rene Buest, senior director analyst at Gartner.

"The goal is to keep wealth generation within their own borders to strengthen the local economy."

Sovereign spend

Most of that spending will be from the public purse via governments, Gartner found.

Alongside the pan-European Gaia cloud, France is even shifting digital services such as video calling to locally-made products over Zoom or Microsoft Teams via the Suite Numérique project.

"Governments will remain the main buyers to meet digital sovereignty needs, followed by regulated industries and critical infrastructure organizations, such as energy and utilities and telecommunications," Buest commented.

In Europe, AWS, IBM, Google and more have all pushed sovereign cloud services via heavy investment in European infrastructure – though Microsoft has had to reassure customers that their data really will be safe from American eyes.

"To compete for local customers’ cloud business, large cloud providers must seriously acknowledge the sovereignty concerns and requirements per country, and act accordingly," added Buest.

"Solely treating digital sovereignty as a pure security, regulatory and compliance topic is not enough."

Keeping it local

The shift to "geopatriation projects," as Gartner has dubbed them, means about a fifth of existing workloads will shift from global cloud providers to local ones, the analyst house predicted.

The consultancy added that 80% of sovereign cloud spend will come from new digital projects, including shifting legacy workloads to the cloud.

Unsurprisingly, Synergy research suggests US companies dominate the European cloud market, with local providers scrapping over just 15% of the remaining market.

Although the recent shift to sovereign IaaS spending could help rebalance that, there's plenty of work to be done.

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Global IT spending has grown at the fastest rate in nearly 30 years, according to IDC, largely thanks to the boom in AI and cloud services and PC refresh cycles.

Figures from IDC's latest Worldwide Black Book show that spending on hardware, software, and IT services is on course to rise by 14%. That's the fastest year of growth since 1996, when the launch of Windows 95, expanding PC usage, and internet adoption were the primary drivers of IT spending.

Now it's all about the massive AI infrastructure investment wave driving another ‘supercycle’ of tech spending, IDC noted, with the figure set to reach $4.25 trillion.

Total ICT spending, which includes telecom and business services, as well as IT spending, will reach almost $7 trillion this year, the consultancy found.

The report marks seven consecutive months in which spending has risen - reflecting continued over-performance and aggressive investments by service providers in AI infrastructure.

This month’s figures were also boosted by strong enterprise software spending, with many organizations continuing with digital transformation and cloud migration projects.

IDC said it now expects software spending to increase by 14% in the year ahead, with AI deployments adding to investments in security, optimization and analytics.

“AI is the headline of IT market performance in 2025, but most of the actual AI investment this year is concentrated in service provider infrastructure,” said Stephen Minton, group vice president at IDC.

“This AI investment is partly supported by enterprise spending on core IT products and services, which make up the strong revenue streams of the service providers investing heavily in AI deployment."

With this AI investment supporting economic growth and stability, businesses can more easily maintain their investments in cloud services and enterprise software, Minton added.

"As a result, we’re currently experiencing a virtuous cycle of tech-driven macroeconomic growth,” he said.

IT spending boom shows no signs of slowing

According to IDC, IT spending increased by 16% in the first quarter of this year, partly due to front-loading of PC shipments ahead of anticipated tariffs in the second quarter.

Spending across Q1 marked the fastest quarterly IT market growth in 29 years, the consultancy noted.

Elsewhere, enterprise IT spending increased by 11% in Q1 and 10% in Q2. But it's service provider spending on data center infrastructure – spanning servers, storage, and network equipment – that's set to skyrocket.

Indeed, IDC projects an overall increase of 86% in 2025, reaching almost half a trillion dollars.

There's no sign of any slowdown, either. With most businesses planning to increase IT budgets again in 2026, IDC reckons the figure will rise by 10% in 2026, slower than 2025 but still representing one of the strongest years for the industry since the 1990s.

“There are headwinds and downside risks in the 2026 outlook, including an expected memory component shortage which may drive up PC prices next year,” said Minton.

"Technology demand has been resilient this year in the face of uncertainty around tariffs and a sluggish global economy, but our baseline forecast calls for a stable economy, supported in part by ongoing AI investment," he added.

"Even in a moderate recession, most IT spending would continue. The likelihood of a ‘perfect storm’ similar to the IT market crash of 2001 remains low.”

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SAP has announced a significant expansion of its sovereign cloud offering with a new “On-Site” solution.

The launch of the On-Site model will give customers the ability to host managed cloud infrastructure within their own facilities in a move the tech firm said provides the “ultimate level of physical control and data residency”.

Thomas Saueressig, member of the executive board of SAP SE for customer services and delivery, said the expansion is in direct response to growing enterprise calls for heightened data sovereignty controls.

“Organizations around the world are seeking greater control over their digital environments,” Saueressig said.

“With Sovereign Cloud On-Site, SAP empowers customers to define their own sovereignty boundaries while leveraging our global infrastructure expertise and partnerships.”

The new On-site option aims to offer “flexible sovereignty models” that meet the needs of organizations operating across various areas, SAP said, particularly governments and businesses in regulated sectors.

Varied deployment options mean organizations can choose between SAP-hosted infrastructure, hyperscaler-based models, or customer-site hosted options.

“With SAP Sovereign Cloud On-Site, we are redefining what sovereignty means for our customers,” said Martin Merz, president of SAP’s sovereign cloud division.

“By placing SAP-managed infrastructure directly within customers’ own facilities, we offer unmatched control, compliance, and operational assurance without compromising innovation.”

What to expect from SAP’s sovereign cloud

SAP said its sovereign cloud initiative centers around a series of “core capabilities”, which naturally includes a strong focus on data sovereignty.

Under the scheme, organizations retain full ownership and control of sensitive data, based on local regulatory requirements.

“Operational sovereignty” features allow enterprises to manage environments with SAP resources while “technical sovereignty” enables customers to run SAP workloads using deployment options based on their individual needs - this applies to those operating in regulated industries, for example.

Sovereign cloud in the spotlight

Data sovereignty has become a recurring talking point on both sides of the Atlantic in recent years. In May 2024, industry analysts told ITPro that sovereign cloud services are now the “bare minimum” expected from European customers.

A key factor behind this growing demand is the array of stringent regulatory requirements introduced - or currently being introduced - in Europe. Naturally, providers have acted swiftly to meet this demand.

A host of industry heavyweights, including Google Cloud, Amazon Web Services (AWS), Microsoft, and Oracle, have all since launched dedicated sovereign cloud services for European customers.

Recent months have seen new concerns arise about data sovereignty, with research showing enterprises in the UK and EU both cited worries about US interference.

These concerns came after the Trump administration issued a memorandum in early 2025 pledging to defend American tech companies from “overseas extortion”.

In the wake of the move, Microsoft president Brad Smith said the tech giant would resort to legal action to protect EU customers from US demands to shut down services.

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A new report has laid bare the scale of water usage by data centers across England - and the results aren’t quite as devastating as one would imagine.

TechUK’s Understanding Data Centre Water Use in England, based on a survey in collaboration with the Environment Agency, suggests data centers are “not intensive water users”.

According to the study, 64% of commercial data centers across the country use less than 10,000 m³ of water each year, which techUK noted is less than a “typical leisure center” or equivalent to the water use of a Premier League football club.

Just 4% of sites reported use over 100,000m³ per year, the techUK report added, in line with industrial manufacturing requirements.

The figures from techUK come amidst rising concerns over the impact of water use by data centers, both in the UK and globally. A host of big tech companies, including Google, have come under fire for data center water consumption rates in recent years.

In 2022, for example, Google was called a “water vampire” for consuming around a third of an Oregon city’s supply, prompting an overhaul of practices at the site.

A similar report in early 2025 highlighted concerns over water scarcity, noting that Amazon, Microsoft, and Google were running data centers in some of the world’s driest regions and exacerbating existing supply challenges.

Data center operators have made significant progress in curtailing water use, largely thanks to advances in cooling techniques. Traditionally, large volumes of water are required to cool data centers, but the rise of ‘closed-loop’, direct-to-chip, and waterless cooling systems are becoming increasingly popular.

Indeed, more than half (51%) of data centers across England are now using waterless cooling systems, which the report noted use “no water beyond the regular functioning of any building”.

Meanwhile, 89% of operators said they no longer need to monitor water usage due to closed-loop systems.

Matthew Evans, Director of Markets and COO at techUK, said the report shows that data center operators are “actively innovating” to address water consumption despite negative public perceptions.

“Data centers are the backbone of the UK’s digital economy and will be central to delivering our AI and innovation ambitions,” he said.

“This report shows that, contrary to some public perceptions, most commercial data centers are actively innovating to use minimal water.”

Data center industry needs support

Data centers are estimated to contribute £4.7 billion in GVA to the UK economy each year, supporting more than 43,000 jobs. The sector also has huge potential, according to techUK, potentially bringing in an additional £44 billion in GVA between 2025 and 2035.

This is dependent on whether data center capacity can be increased across the country, however, and is an issue the trade body insists requires action.

“As demand for compute grows, we must plan ahead,” Evans said. “We need smart policies, resilient infrastructure, and stronger data to ensure digital and environmental resilience go hand in hand.”

The report from techUK noted that “major data and planning” gaps are hampering data center growth across the country, and called for closer collaboration between government, regulators, and industry to accelerate expansion.

Key recommendations from the trade body included the development of a UK-wide “water exploitation index” to help developers and planners assess potential water stress on a region-by-region basis.

Elsewhere, the report also called for greater industry focus on measuring and reporting water usage – as well as water usage effectiveness (WUE) – at sites across the country.

Investment in advanced cooling technologies and the development of cooling systems “based on local water availability” were also highlighted by techUK.

Richard Thompson, the Environment Agency’s Deputy Director for Water Resources, said future data center expansion across England “must go hand-in-hand with protecting public water supplies, food security, and the environment”.

“It is vital the sector puts sustainability at its heart, and minimizes water use in line with evolving standards,” he said.

“We are working with industry and other regulators to raise these to secure the best outcomes for our environment and our water supply for future generations.”

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While AI tools are proving vital for worker productivity, many enterprises are reporting serious problems with reliability - and it’s because they’ve been woefully underprepared for integrating the technology.

A new survey of backend engineers and IT decision makers by Temporal Technologies found that 94% are using AI in their workflows - mostly through tools like Copilot or ChatGPT.

However, just 39% are building reliable internal frameworks to support the adoption of the technology. A key stumbling block is the underlying infrastructure required to scale the technology at an enterprise-wide level, the study noted.

"Most teams think they’re modern. Most teams also admit they’re stuck," one respondent said. "Somewhere between post-build ('we built it!') and pre-scale ('oh god, how do we scale this thing?'), the real challenge begins."

Nearly half of large companies rely on custom-built workflow solutions, compared with just a third of smaller organizations, the survey found.

Three-quarters of teams said their workflows are hampered by issues such as insufficient support for long-running processes and high operational overhead, both cited by 35%, along with failure recovery challenges, a problem for 34%.

Reliability is more important than cost, performance, and speed, with 36% of engineering and IT leaders saying that reliability and compliance are their top development priorities over the next 12-to-24 months.

Notably, reliability and compliance are now bigger priorities than automation, cited by 33% of respondents, and reducing technical debt (30%).

Developers are getting stuck with AI tools

According to the survey, nearly a third of developers said that complex, long-running workflows break constantly, which hampers efficiency and slows down development processes.

"Everyone’s ‘using AI,’ but very few know how to keep it from falling over,” one respondent said.

“That knowledge gap isn’t just inconvenient, it’s a dealbreaker when you’re trying to scale agentic systems without a way to retry, resume, or even observe what went wrong.”

Tooling priorities and decision-making power are also misaligned, the survey found. In smaller companies, half said that developers typically lead tooling decisions, while in enterprises, that responsibility shifts to IT managers and CIOs at 53%.

For developers at larger enterprises, this means new tools and solutions are essentially dropped in their lap, and responsibility for implementation is left to them.

"The report tells us a lot of what we hear from partners every day—backend challenges aren’t just technical, they’re also organizational,” said Samar Abbas, co-founder and CEO of Temporal Technologies.

“Engineers and decision makers are prioritizing different things, and that disconnect is driving tooling delays, reliability risks, and rising complexity across the stack. AI is only adding another layer of scale and unpredictability.”

Security concerns are rising

Decision makers ranked security as their top concern, with nearly half saying they were losing sleep over customer churn, their biggest concern during outages.

Another 47% said that downtime drives up operational costs, while only 5% said that failures would have no major impact.

Four-in-ten respondents reported that AI’s biggest impact was in code generation - a growing trend in recent months.

A survey from Clutch revealed that 53% of senior software developers believe LLMs can already code better than most humans. However, many voiced serious concerns about data privacy and security risks.

The findings of the Clutch survey align with a previous study on the topic from Cloudsmith, which warned developers are placing too much faith in AI code generation and opening themselves up to potential security risks.

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More than seven-in-ten UK organizations have had some sort of IT disruption in the last 12 months, with many woefully unprepared to content with outages.

In a survey from colocation data centre provider Asanti, 72% of senior IT decision makers said that problems with resilience had led to significant disruption or downtime, with only 31% expressing extreme confidence in their current disaster recovery and business continuity plans.

Just over half (56%) said they had fully defined and regularly tested Recovery Time Objectives (RTOs), while 36% said the same for Recovery Point Objectives (RPOs) – the core thresholds set for acceptable downtime and data loss.

Six-in-ten businesses have struggled to return to normal operations after a major resilience disruption, the study noted, while 58% admitted to suffering substantial financial losses.

Notably, there was a distinct lack of confidence in organizations' risk recovery abilities, with 54% reporting low or medium confidence in handling cybersecurity breaches, and just over six-in-ten saying the same about data center outages or unauthorized physical access.

A key problem is what the researchers term a “resilience competency gap”, with critical planning, testing, and investment decisions failing to keep pace with the increasing complexity and frequency of IT threats.

The top IT downtime risks

Despite widespread cloud adoption, 51% still view cloud service outages as one of the top risks to operations.

Concerns over cloud service outages surpass even traditional IT system failures, at 49%, the study noted.

“Too many organizations assume they’re more resilient than they actually are. This research makes clear that real resilience isn’t about where your systems live – it’s about how well you’ve prepared to keep them running," said Stewart Laing, CEO of Asanti.

"Without clearly defined recovery objectives, rigorous testing and a culture of proactive risk management, even the most advanced infrastructure can fail. Business leaders must move beyond surface-level confidence and embed resilience into every layer of operations.”

Human failures are impacting resilience

Meanwhile, 89% of respondents reckon human oversight is a critical vulnerability in their resilience strategy, with more than nine-in-ten saying that operational failures due to human error could compromise backup power capabilities.

While 59% said they test their business continuity and disaster recovery plans at least every six months, these exercises aren't always as thorough as they should be. Only 31% of respondents said they felt extremely confident in their current plans.

While 77% of companies track downtime, and 73% the financial impact of resilience incidents, only 54% track less obvious indicators like reputational impact, and only 57% evaluate the impact on digital transformation goals.

“Measurement is the foundation of resilience,” said Laing. “If you’re only tracking outages and costs, you’re missing the true business impact. Resilience must be strategic, tested and integrated across infrastructure, operations and leadership thinking.”

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Meta CEO Mark Zuckerberg has revealed plans to build a 5GW data center, with one cluster alone set to be nearly as big as Manhattan.

Detailing the plans in a social media post this week, Zuckerberg said Meta plans to invest “hundreds of billions” of dollars as part of the move to build out AI infrastructure.

Meta, along with industry competitors, has been ramping up investment in AI infrastructure over the last 18 months, with capital expenditure at the tech giant surging to $68 billion.

The pledge comes as Meta has offered large sums — some in the hundreds of millions — to entice top AI talent away from rivals, successfully poaching staff from Google, OpenAI, Anthropic, and Safe Superintelligence, among others.

In the last two weeks, reports suggested Meta sought financing of as much as $29bn to fund data centers, and bought 1GW of renewable power as part of the push.

Meta is big on data centers

Writing on Threads, Zuckerberg outlined some of the company's plans when it comes to competing with AI, and in particular developing superintelligence.

OpenAI has long targeted the idea of artificial general intelligence (AGI), and Meta recently launched its own Superintelligence Lab.

"For our superintelligence effort, I'm focused on building the most elite and talent-dense team in the industry," he wrote. "We're also going to invest hundreds of billions of dollars into compute to build superintelligence."

Zuckerberg noted that analyst firm SemiAnalysis reported Meta would be the first lab to bring a 1GW "supercluster" online, but said that Meta is already working to build several multiple-gigawatt data centers.

The first of these will be named Prometheus, he revealed, and is set to come online in 2026.

"We're also building Hyperion, which will be able to scale up to 5GW over several years,” he added. “We're building multiple more titan clusters as well. Just one of these covers a significant part of the footprint of Manhattan."

"Meta Superintelligence Labs will have industry-leading levels of compute and by far the greatest compute per researcher. I'm looking forward to working with the top researchers to advance the frontier!"

Where will the data centers be built?

In New Albany, Ohio, the Prometheus system is a 1GW cluster of data centers using both Meta's own infrastructure and leased systems, according to SemiAnalysis, noting that this means "Meta ramps faster".

It will have two natural gas plants on site, though Prometheus will also use renewable energy.

Hyperion, meanwhile, is in Richland Parish, Louisiana; work started last year, and the first 1.5GW phase is expected to come online next year. It will be powered in part by renewables but also feature natural gas.

The same day that Zuckerberg made his enthusiastic Threads posts, a story in The New York Times described Meta's construction of a $750 million data center in Georgia, highlighting the impact on the local community including local wells going dry.

While a Meta spokesperson disputed the account, the local water authority said the data center uses 10% of the county's total water supply.

Bigger data centers means bigger challenges

The rise in AI has led to a huge increase in data center investment and funding for associated infrastructure.

Earlier this year, the US government unveiled plans for the Stargate Project, a $500 billion scheme aimed at building out AI infrastructure across the United States.

With backing from OpenAI and cloud computing giant Oracle, the project aims to meet projected demand for compute power as enterprises across the country continue ramping up AI adoption.

But with infrastructure investment comes new demands - and concerns. Particularly around the environmental impact and strain placed on energy grids.

A host of big tech companies, including AWS and Microsoft, are investing heavily in nuclear energy to meet expected power demands as a result of their own infrastructure build out.

Indeed, the International Energy Agency said AI will chew through the same amount of energy as Japan by 2030. Google reported earlier this month that its emissions have surged 51% over five years, largely down to AI infrastructure development.

Concerns over energy constraints are also growing on the other side of the Atlantic, with research earlier this year warning that European energy grids might struggle to contend with surging power demands.

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Pegasystems has announced a strategic collaboration with AWS to drive IT modernization using the cloud computing giant’s generative AI services.

The five-year deal will give users of Pega Blueprint, the company’s application modernization and development platform, access to Amazon Bedrock and AWS Transform.

Bedrock is Amazon’s flagship AI service, offering customers the ability to choose from a selection of in-house and third-party AI models, while Transform uses agentic AI workflows to automate application modernization lifecycles.

According to Pegasystems, the tie-up between the two firms will enable enterprises to dramatically accelerate modernization projects and tackle technical debt - a key issue affecting businesses which hampers AI adoption.

John Higgins, chief of client and partner success at Pegasystems, said the collaboration marks “another major step” in helping enterprises accelerate legacy application transformation goals.

“It’s no longer enough to keep applying incremental changes to legacy systems in the AI era,” he said.

“Clients want to drive strategic business process changes to capture the AI driven productivity improvements; eliminating technical debt, enabling dynamic and intelligent workflows are significant value drivers for organizations seeking to embrace AI to drive business agility.”

What customers can expect from the AWS-Pega deal

Pegasystems has been highly vocal on the potential of AI to transform application and IT infrastructure modernization in recent years.

The firm unveiled the Blueprint platform in early 2024, and has launched a raft of new AI-powered capabilities in the 18 months following its launch.

With this in mind, creating deeper ties between Blueprint and AWS Transform makes sense. The company noted that drawing upon the agentic AI capabilities of the AWS service will help users “accelerate their journey to the cloud faster and more efficiently” by simplifying legacy system modernization.

"Generative AI is not only revolutionizing what customers can build in the cloud, but with services like AWS Transform, it's fundamentally changing how quickly and seamlessly they can get to the cloud in the first place," said Chris Grusz, managing director of technology partners at AWS.

The same logic applies to Bedrock, as it will allow customers to draw upon a range of AI models that can be used across its suite of solutions.

Indeed, Pegasystems said the AI model service will act as the “primary generative AI foundation” powering both Blueprint and the Pega Platform - an AI-based workflow automation service used for building applications.

“Now powered with Amazon Bedrock, clients can securely leverage generative AI large language models (LLMs) from companies including Anthropic, Amazon, Cohere, Meta, and more,” the company said.

“Pega clients can confidently use the power of Amazon Bedrock across the entire app development lifecycle – from requirements analysis to initial workflow design to continual refinement.”

Tackling technical debt

A key talking point for Pegasystems over the last two years has been the impact of legacy infrastructure and technical debt on broader AI strategies.

While enterprises are keen on AI adoption and investing heavily on this front, many are working with outdated tech that simply isn’t up to the task of contending with cumbersome AI workloads.

In a recent survey conducted by Savanta on behalf of Pegasystems, more than two-thirds (68%) of respondents identified legacy systems and applications as a key barrier to adopting new technologies.

Notably, the study found that many enterprises are now caught in a vicious cycle of “legacy dependency”, whereby they can’t embrace new technologies due to the fact that overhauling critical legacy applications may create larger problems.

Nearly half (48%) of respondents highlighted this as a key factor behind sluggish modernization progress. Another 68% said legacy systems are preventing them from improving operational efficiency.

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Are AI data centers the new oil? Oxford researchers suggest AI infrastructure will decide a nation's global impact in the future just as oil production has over the last few decades.

That's a problem, however, as AI data centers are located in just 33 countries, with the bulk of that infrastructure hosted in just a few nations — leaving South America and Africa with a handful each.

A study examining AI infrastructure control by researchers at the University of Oxford looked at the concept of compute sovereignty and considered whether it's truly possible when resources are centered in a few regions, built by a handful of cloud providers, and powered almost entirely by a single chip maker.

That's already led to efforts by Microsoft and Google to reassure foreign customers that their data will be held locally, as well as driving European companies to build their own AI clouds.

Nvidia and Deutsche Telekom, for example, recently teamed up to build a "sovereign" AI cloud. And no wonder, with 60% of UK industry leaders surveyed saying they're concerned about reliance on US cloud.

Who's controlling AI infrastructure?

The study looked at public cloud providers across the US, China, and Europe, as those three regions make up 78% of global spending on cloud infrastructure, highlighting cloud providers in each area: Amazon, Google, and Microsoft in the US; Alibaba, Huawei, and Tencent in China; and Exoscale, Hetzner, and OVHcloud in Europe.

"Although European cloud providers are not significant global players they have a non-negligible role in their region, particularly as European countries pursue compute sovereignty policies that aim to support European providers," the paper noted.

The researchers counted 225 cloud regions — which they defined as a cluster of large, interconnected data centers — with 132 equipped with AI accelerators located across 33 countries, with most of the countries in the world still lacking AI capabilities.

Of those 33 countries, 24 had infrastructure for training AI, while the remaining nine had only inference-relevant AI computing hardware, and some had both.

Most of those are in North America, Europe, and Asia, as well as the Middle East, the study noted.

"In South America, only Brazil hosts public cloud AI compute on its territory, while in Africa only South Africa does so," the paper noted.

Of the total 132 compute hubs with AI capabilities, 26 were located in the US, 22 were in China, and 27 were found in EU nations.

International AI gap

The figures raise concerns about an ever widening digital divide, with developing countries missing out on any benefits of AI while also suffering a brain drain, with talented developers departing to work elsewhere.

Vili Lehdonvirta, a researcher at Oxford who took part in the research, said the AI gap could entrench political power.

"Oil-producing countries have had an oversized influence on international affairs; in an AI-powered near future, computer producers could have something similar since they control access to a critical resource," Lehdonvirta told the New York Times.

When it comes to hardware inside those computing hubs, the majority of chips were unsurprisingly from Nvidia, with the vast majority produced in Taiwan.

However, the paper notes that geopolitical tensions and concerns about the supply chain mean US and Chinese companies have redirected investment toward in-house accelerators to help diversify the market.

Is AI sovereignty possible?

The current US and Chinese-centered market makes achieving true sovereignty difficult, researchers noted, even when companies like Microsoft are pledging to keep European data in Europe via its cloud sovereignty plans.

"The highest level of computer sovereignty from this point of view is achieved when data centers are not only situated within the country’s territory but also operated by domestically owned cloud provider firms," the report noted.

"Under this definition, only the US, China, and a handful of European countries qualify as compute sovereign in the census data set."

"This result partly reflects the fact that the global market for the provision of public AI compute is dominated by a small number of large providers, which are the subject of our census. However, smaller, local cloud providers not captured by the census may nevertheless make meaningful contributions to their home markets’ AI compute capacity."

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Nvidia CEO Jensen Huang has said the UK has enormous AI potential but needs significant infrastructure buildout to make the most of it.

Speaking alongside UK prime minister Keir Starmer at London Tech Week, Huang insisted that building AI supercomputers in the UK will be necessary to kickstart investment.

“The UK is in a Goldilocks circumstance,” Huang said, explaining that it has “one of the richest AI communities anywhere on the planet” and attracts the third largest amount of AI venture capital investment in the world, after the US and China.

Together, Huang argued, these factors make the UK a very attractive region for AI spending.

“It’s a fantastic place for VCs to invest – the ecosystem is really perfect for takeoff.”

But the Nvidia chief executive also warned the UK is the “largest AI ecosystem in the world without its own infrastructure,” comparing the challenge for researchers to astronomers trying to do their work without radio telescopes.

“You can’t do machine learning without a machine – and so the ability to build these AI supercomputers here in the UK will naturally attract more startups, it will naturally enable all the rich ecosystem of researchers here to do their life’s work,” he explained.

The UK government has committed to building out the UK’s compute capacity 20x by 2030, as announced in its AI Opportunities Action plan back in January.

During his speech at London Tech Week, Starmer announced an extra £1 billion ($1.35 billion) in funding to support this expansion and pledged to rapidly expand the construction of data centers and labs.

Huang argued that once the foundational infrastructure is in place, with Nvidia directly involved, research can feed into business which will further drive infrastructure buildout.

“I think it’s just such an incredible place to invest – I’m going to invest here,” Huang added.

UK firms are flocking to Nvidia hardware

Nvidia’s hardware is used around the world for AI data centers and supercomputer infrastructure. The firm is already heavily involved in UK projects such as the Bristol-based Isambard-AI supercomputer.

At the event, AI cloud platform provider Nscale announced plans to build UK AI infrastructure comprising 10,000 Nvidia Blackwell GPUs, while AI infrastructure firm Nebius committed to building a UK AI factory using 4,000 Nvidia Blackwell GPUs.

Starmer repeatedly stated that the government is committed to an ongoing conversation with the private sector to double down on the UK’s AI expertise.

“If there’s one thing I want to get across today, it’s that we are leaning into this,” Starmer said.

“We are excited about the potential that this could have, will have, on the lives of millions of people and making their lives better," he added.

"I came into politics quite late in my career to improve the lives of working people across the country and I can see here the huge potential to do that at a scale and speed which I didn’t necessarily think would be possible.”

The day before the event, the government hosted a meeting between cabinet ministers and select representatives from the tech industry including Huang, Google DeepMind CEO Demis Hassabis, and former Google CEO Eric Schmidt.

Attracting AI investment and expanding AI skills is a key aim of the UK government, and while onstage Starmer urged attendees to reach out to the government to get involved in public-private partnerships.

The UK government has separately committed to new funding for AI skills, with an aim to train 7.5 million people by 2030 in partnership with companies such as Nvidia, Google, and Microsoft.

MORE FROM ITPRO

• Jensen Huang doesn't think AI will come for his job — but other CEOs might disagree
• Starmer bets big on AI to unlock public sector savings
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Google CEO Sundar Pichai has confirmed the company will still spend $75 billion on building out data centers despite economic concerns in the wake of US tariffs.

While many were paused or reduced yesterday, heavy tariffs still remain on China, potentially raising the cost of infrastructure projects deemed necessary to enable the development and rollout of AI.

Speaking at the Google Cloud Next conference, Pichai took to the stage to confirm that the $75 billion investment was still planned for this year.

"The opportunity with AI is as big as it gets," he said. "That's why we are investing in the full stack of AI innovation, starting with infrastructure that powers it all. We are making big investments now, and for the future."

"This investment will be directed towards our servers and data centers, which includes power our AI compute and cloud business," he added. "So this will greatly benefit our customers, like all of you."

He added that the infrastructure spend will benefit existing services like Search and Google Workspace, but will also be used for training its Gemini model.

That $75 billion was originally announced by Google's parent company Alphabet in February as part of quarterly results reporting. Last year, Google spent $52.5 billion on capital expenditures, marking a significant increase.

Similar infrastructure investment is planned by rivals. Microsoft said it would spend $80 billion on AI equipment this year, while Meta announced spending of $65 billion.

That comes alongside huge data center investment as part of Project Stargate, a $500 billion plan to build AI infrastructure in the US that is backed — but not paid for — by the US government.

Enterprises could feel the pinch

The high cost of infrastructure required to support AI development was already causing concerns. Last year, Microsoft said that it could take 15 years for the investment to pay off and investors at a host of major firms have voiced worries over spiraling capital expenditures.

With the arrival of tariffs and a looming trade war, these costs could surge even higher, according to industry analysts.

Mark Moccia, VP research director at Forrester, warned IT infrastructure in particular will experience “significant price increases” as major manufacturing nations face high tariff rates.

"The rising costs could balloon budgets and force CIOs to delay or prioritize the most important projects,” Moccia said. “CIOs and other tech leaders will need to proactively analyze costs, diversify sourcing, optimize inventory, and prioritize the projects that don’t sacrifice critical AI ambitions."

Similarly, Forrester principal analyst Lee Sustar said ambitious infrastructure plans and multi-billion dollar data center build outs will become “significantly more expensive” due to price increases on building materials.

Ultimately, he said, this could lead to rising cloud costs as major providers compensate for challenging economic conditions.

"At the same time, the demand for cloud services — especially pricey AI offerings — will drop at least in the near term due to uncertainty over the wider economy," Sustar said.

"Cloud providers will face pressure to pull back on big investments and pass costs to customers with price increases."

MORE FROM ITPRO

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• Keep up to date with all the news and announcements from Google Cloud Next 2025
• Foreign AI model launches may have improved trust in US AI developers, says Mandiant CTO

New research shows the notorious Volt Typhoon threat group was able to remain undetected in the US electric grid for nearly a year, and experts have told ITPro the incident highlights rampant OT security failures.

Operational technology (OT) security specialist Dragos published a report covering a specific intrusion that affected a local public utility in Massachusetts, the Littleton Electric Light and Water Department (LELWD) in 2023.

It transpired that the intrusion was first discovered in November 2023 while LELWD was implementing a number of OT security solutions. The specific group in question was identified by Dragos as VOLTZITE, a group it says overlaps with the Volt Typhoon collective.

An investigation into the intrusion revealed the group had likely had access to LELWD’s network since February 2023, totalling more than 300 days of access to its IT environment.

The report stated that further investigation determined that the compromised information did not impact any customer data and LELWD was able to change its network architecture to remove any potential leverage or access the adversary may still have had.

Dragos noted that the incident led to an acceleration in LELWD’s “cybersecurity journey” with the utility expediting the deployment of its OT security solutions as a result of the intrusion.

Ensar Seker, chief security officer at SOCRadar, said the incident demonstrates there are particularly worrying frailties in the critical national infrastructure (CNI) sector that need to be addressed.

"This latest Volt Typhoon intrusion into the US electric grid is a serious escalation in cyber-enabled espionage, highlighting the vulnerabilities of critical infrastructure (CI) in the face of persistent threats from nation-state actors,” he stated.

“The fact that Chinese hackers remained undetected for over 300 days inside a small public utility’s network is concerning, not only because of the extended dwell time but also because it reinforces the broader risks posed to larger, more complex CI networks."

This is not a new problem, but the industry needs to take action now

Seker noted that the group’s tactics usually involve persisting on the network of the target organization for as long as possible, giving them time to plan a more devastating future attack.

"This group is known for pre-positioning within US CI—not necessarily for immediate sabotage, but for future disruption scenarios. By embedding themselves in water and power utilities, they gain persistent access to industrial control systems (ICS) and operational technology (OT), which could be leveraged in a geopolitical crisis."

A CISA advisory on the Volt Typhoon published in the summer of 2023 warned that the group frequently employs living off the land (LOTL) techniques, using pre-installed tools to maintain persistence and burrow deeper into corporate networks.

The longer lifespan of OT devices used in many CNI organizations presents an ideal target for groups like Volt Typhoon, who can use the additional time to take advantage of the built-in systems to strengthen their foothold in the environment and plan future attacks.

Tim Mackey, head of software supply chain risk at Black Duck, said this represents a particular challenge for CNI organizations, with OT often becoming vulnerable many years after it was initially deployed and its security protection has run out.

"One of the biggest challenges with cybersecurity in critical infrastructure is the long lifespan of the devices. Something that was designed and tested to the best practices available when it was released can easily become vulnerable to attacks using more sophisticated attacks later in its lifecycle,” he said.

“In effect, legacy best practices may not be up to the task of mitigating current threats or, worse, those that might be deployed in the coming years.”

"Since attackers know that critical infrastructure providers are measured in their up-time or service availability, once a device is compromised, attackers know that they have the luxury of mapping out and planning a very targeted attack rather than just being opportunistic,” Mackey added.

Speaking to ITPro, Dan Lattimer, area VP EMEA West at Semperis, said this is not a new problem, but the increasing prevalence of state-sponsored attacks targeting these devices means the industry must change how they manage them.

“OT assets are unique to organizations due to their lifespan. Historically, they have been treated rather separately to other IT assets. They have been deployed and managed with an operations-only lens, (i.e. keep them up and running)," he said.

"Upgrades and security initiatives do carry risk to these environments as they can potentially run into issues, like all projects can. No organization wants to accidentally cause an issue that stops water or electricity to thousands of households,” he said.

Lattimer noted that geopolitical factors will continue to heighten risks for operators in the CNI space and increase the likelihood of OT-related cyber attacks. With this in mind, he urged organizations to implement and maintain stringent upgrade practices.

“As with all corporate assets, organizations need to understand their assets, configure them securely, manage user access and permissions, and continuously review and update this along with upgrading where possible.”

MORE FROM ITPRO

• UK cyber experts on red alert after Salt Typhoon attacks on US telcos
• FCC orders telcos to sharpen up security after Salt Typhoon chaos
• Volt Typhoon is wreaking havoc again – this time on US internet providers

DeepSeek’s shock introduction has had a massive effect on the adoption and development of generative AI models in the business landscape, and Cisco feels it has a significant advantage in capitalizing on this.

Speaking at Cisco Live 2025, its annual EMEA conference in Amsterdam, Jeetu Patel, EVP and chief product officer at Cisco said this is a massive opportunity for the firm from both a network infrastructure and security perspective.

Patel said the arrival of DeepSeek was one of two “seismic developments” that have taken the industry by storm, the other being OpenAI’s foray into the world of agentic AI with its Operator solution.

The DeepSeek effect, according to Patel, is that the cost curve for AI deployments has plummeted in terms of the resources it takes to train a model, and as a result the number of models in use in business is about to skyrocket.

“You won’t just have tens of models, you might have thousands of models and this will actually have massive implications on security and safety,” he predicted.

This broad industry shift will expand every organization’s attack surface, according to Patel, introducing a host of new potential threats and piling added strain on businesses’ IT infrastructure.

Cisco aims to capture new industry demand in both of these areas, firstly in the infrastructure space with a new AI server, the UCS C854A M8.

This is a modular system based on Nvidia’s MGX reference architecture that can accommodate anywhere from two to eight GPUs according to the user’s needs and budget constraints.

The UCS C854A M8 is available in a number of configurations, supporting a range of Nvidia GPus and CPUs from AMD, and will fill a gap in its AI infrastructure portfolio for model training.

With the new UCS Cisco looks to fill out its AI infrastructure, joining its recently launched AI PODs solution, aimed at providing flexible, cost efficient generative AI deployments.

Network and security expertise will be essential in managing safe AI deployments

In a panel session following the opening keynote, Patel said the implication of the joint DeepSeek and Operator effects is that business networks are going to have to deal with a whole different new volume of traffic.

He raised Cisco’s in-house network architecture, Silicon One, as a key area where Cisco is well-positioned to exploit new demand AI workloads will place on businesses.

Another aspect to the industry’s ongoing agentic shift is the fact that ensuring these systems are secure and managed effectively.

In addition to its existing network monitoring and access solutions, Cisco recently released its own generative security solution, Cisco AI Defense, that promises to safeguard both the development and use of generative AI applications in the enterprise.

The system can restrict access to external AI applications, helping reduce risks posed by shadow AI, or monitor and manage how users are engaging with these platforms.

On the other hand, Cisco AI Defense has a vulnerability testing function that can identify if your organization’s internal AI applications have any security weaknesses or privacy concerns.

Speaking to ITPro, DJ Sampath, VP of product for AI software and platform at Cisco, said customers are increasingly looking at using both external AI applications and deploying these systems internally. As such, an end-to-end system that covers both of these spheres is vital.

He argued that as firms look to take advantage of open source models available on platforms like Hugging Face, it’s integral that these organizations are able to put the right security, safety, and privacy guardrails in place before deploying them inside their environment.

Sampath claimed it is Cisco’s network security expertise and its new strengths in securing AI systems that puts it at a significant advantage for the company in light of these recent transformative events.

“The biggest advantage that Cisco is going to have is, from an AI safety and security perspective, we’re able to position ourselves where we’re seeing everything on the network, we’re enforcing everything on the network. We have the fabric of the network to do that,” he explained.

“In addition to enforcing things at scale, we are validating these models at scale. So both of those [capabilities] provide us with a very unique way of being able to provide value to our enterprise customers.”

MORE FROM ITPRO

• Cisco Live EMEA 2025: All the news and updates as they happen
• Stargate project: OpenAI, Oracle pledge support for $500 billion AI infrastructure drive
• Huawei targets ‘intelligent industrial transformation’ with AI-ready infrastructure

CoreWeave has opened its first two new data centers in the UK, with the company revealing they'll host some of Europe's largest Nvidia AI platform deployments.

Powered by Nvidia H200 GPUs and scaled with Nvidia Quantum-2 InfiniBand networking, the first went live in October 2024 in Crawley with partner Digital Realty, whilst the second went live in December 2024 in London Docklands, with partner Global Switch.

Both are powered entirely by renewable energy.

The data centers form part of an initial £1 billion investment in the UK, which was announced last year. CoreWeave also made London its European headquarters and announced a further £750 million investment in the UK at the International Investment Summit in October.

"This investment is a huge vote of confidence in the UK's digital technology sector and is exactly the kind we want to see as we grow the economy and use AI to drive efficiency," said chancellor Rachel Reeves.

Last August, CoreWeave became the first cloud provider to bring Nvidia H200 GPUs to its customers, and said the new sites will help it deliver its specialized AI cloud platform in the UK.

"Our first operational data centers in the United Kingdom are a significant milestone for the company, which builds on the investment we announced last year," said Mike Mattacola, chief business officer at CoreWeave.

"The UK is an important market for CoreWeave, with our European headquarters here and further operational plans for the country. We are pleased to be partnering with Digital Realty and Global Switch to deliver the next generation of AI infrastructure in the UK."

By the end of last year, CoreWeave had opened 28 data centers globally, with an additional 10 new data centers planned in 2025. Its US data centers are split into three geographical regions, US East, US Central, and US West.

Each features redundant, 200Gbps+ public internet connectivity from Tier 1 global carriers, and the three are connected with 400Gbps+ of dark fiber transport, allowing for easy, free data transfers within CoreWeave Cloud.

Last summer, the firm announced plans for new data centers in Norway, Sweden, and Spain, in a $2.2 billion investment. Set to be opened by the end of this year, they will be powered by 100% renewable energy.

AWS has announced its latest round of infrastructure investment focused in the US, pledging $11 billion for data centers in the state of Georgia.

The news follows a similar announcement of $10bn in funding for data centers in Ohio at the end of last year, and comes days after Microsoft said it will spend half of an $80bn tranche of data center funding for 2025 in the US alone.

"AWS's ongoing infrastructure investments across the United States demonstrate our relentless commitment to powering our customers' digital innovation through cloud and AI technologies," said Roger Wehner, vice president of economic development at AWS.

The growth in data centers has been spurred by the rise in generative AI, but AWS said this infrastructure will be designed to be flexible, working both for traditional loads as well as meeting the demands of massive AI models.

"AWS data centers are flexible enough to efficiently run GPUs (graphics processing units) for traditional workloads or AI and machine learning models," the company said in a blog post.

This isn't the first time AWS has invested in Georgian data centers. Indeed, the company noted it has invested $18.5 billion since 2010.

"State and local leaders have cultivated an environment that enables companies like AWS to make bold, forward-looking investments," said Wehner.

"We are excited to deepen our partnership with the state of Georgia and contribute to the continued advancement of its thriving technology landscape."

AWS predicted the initiative would create at least 550 new high-skilled jobs in the region, alongside thousands of non-technical roles such as construction.

The investment is expected to focus on the Butts and Douglas counties. Russ Crumbley, chairman of the Butts County Board of Commissioners, said the investment would be the "most significant in Butts County history."

Sustainable power

AWS didn't detail how the new infrastructure would be powered — a growing problem for AI data centers that has sparked concerns about a lack of energy driving tech companies to nuclear options.

Amazon's own plans to build a data center next to a nuclear plant has seen significant pushback. However, the hyperscaler did note that it had previously made "significant investments" in renewable energy in the state, including eight solar farms.

"Once fully operational, these projects will generate enough carbon-free energy to power an estimated 123,000 US homes each year," the blog post noted.

The boom in AI has driven demand for more data centers, with reports suggesting Europe and the UK risk falling behind without such investment.

Edge computing is becoming an essential part of IT infrastructure for business leaders and IT managers as they support the Internet of Things (IoT) and on-premise applications, as well as bring high bandwidth content closer to data sources. With this comes the need for better uninterruptible power supply (UPS).

This eBook from Schneider Electric discusses the challenges that UPS can come up against at the edge, and explains the benefits of three technologies that can help mitigate them, including cloud-based management and monitoring technologies.

Download now to learn more about how wide-bandgap technology works, how lithium-ion battery technology can help reduce carbon footprints, and how cloud-based software can help with staffing.

Provided by  Schneider Electric

Interest in artificial intelligence (AI) is at an all-time high due to the influx of generative AI products on the market. Business leaders are seriously considering integrating the technology within their stack like never before, but must bear in mind specific considerations before doing so.

AI is often thought of and sold as a single, monolithic technology, whereas it's really a vast family of processes, models, and workflows that need to be carefully implemented to really add value. To benefit from incoming AI innovations, businesses need clear plans and a strong idea of how the technology interfaces with their existing systems and sectors.

In the coming months and years, executives expect generative AI to boost financial performance and more than half of firms have already adopted generative AI, whether in pilot stages or in full production.

However, there are a number of hurdles between the current state of investment and the hoped-for gains of generative AI implementation. In the short term, many firms are investing in application security alongside generative AI to mitigate security risks such as proprietary data leaks and legal issues such as AI bias.

Overprovisioning on this technology could also end up being very costly in 2024. CCS Insight tells ITPro that smaller firms will find the cost of running AI models locally “prohibitively expensive” due to the need to pour up-front investment on powerful graphics processing units (GPUs). 

Limiting AI hardware and optimizing data

When it comes to running AI models, it will be important to identify the size and power one’s business seeks. For firms looking to implement AI in a limited manner, such as the simple generation of some internal documents, lightweight models could be adequate. 

Business leaders must always consider the needs of their organization, rather than just the scope of their budget or project timelines.

If an organization sets out to implement the latest large language models (LLMs) on the most powerful hardware, they must be aware this means spending endless money on more powerful hardware to keep up. The majority of the major AI developers are in a race to build larger LLMs with many hundreds of billions of parameters, which will necessitate incredibly costly and stock-limited chips to run.

Instead, businesses should engage in rightsizing, working with a consulting partner if necessary, to determine the precise workloads they need — if any. More lightweight LLMs may operate at a slower rate but could be far cheaper to run and therefore align with the strategies of a firm more closely. 

Open source models will also be a low-cost option for businesses in the immediate future, but will need to be carefully integrated into one’s ecosystem to meet the concerns of the security department and to run as smoothly as possible on the hardware one owns or rents. For example, the PyTorch framework is supported on hardware like AMD’s Radeon GPU family to allow for cheap on-prem AI inference but is not universally accessible. Knowing the products one has already invested in will be key for forming any coherence in one’s AI future AI investment strategy.

AI-focused chips such as AMD’s EPYC CPU family come in a range of models that balance performance and energy efficiency, helping them to serve the specific AI needs of a business as components in a data center.

Rightsizing in these data centers and the kinds of efficiency gains will be essential in the coming years, as enterprises seek to embrace the gains of generative AI and frontier models. While businesses will want to stay relevant and match the technological level of competitors, they will also need to meet sustainability commitments and keep a lid on energy prices. 

It’s already becoming incredibly expensive to build generative AI platforms, and a recent report from Pure Storage indicated that businesses still lack the right infrastructure to cope with AI energy demands.

This will be true of organizations that have a poor grasp on structured vs unstructured data management, perhaps with a sprawling and siloed system that prevents IT managers from achieving proper oversight of the firm’s data. Fixing data silos and unifying data across an organization can help improve the performance of any generative AI model while reducing the burden on data engineers and the chief data officer (CDO).

The role of the channel and trusted partners

The channel can play a key role in the adoption of AI hardware and software. As generative AI is adopted on a wider scale, it will be rare to find businesses with the resources and specific needs that allow them to go it alone on AI integration. Rather, channel partners with massive computing resources or pre-made generative AI models will supply businesses with what they need.

Many generative AI services are already available through public cloud partners such as AWS’ Amazon Bedrock, Microsoft’s Azure AI Platform, or Google’s Vertex AI. Equally, businesses may seek out private cloud options for AI or rent AI hardware directly from a vendor. Leaders must decide the route they will take based on their individual needs; those with particularly sensitive data such as financial services companies may choose to rely more on private cloud models or even fork out to run models on-prem, for example, rather than rely on the goodwill of public AI firms in handling their data.

Ultimately it will come down to the individual needs of each business. Considering these in advance and knowing the precise outcomes one is aiming to achieve through the use of an LLM or other AI model will help partners bring this to fruition.

When adopting AI in the coming year, businesses should consider what their needs truly are and then apply these to AI integration rather than seeking solutions without a problem in mind. There are a multitude of paths available to adopting AI systems with generative AI, in particular, being offered via a number of trusted partners as well as through the open source community.

Production was halted at more than a dozen Toyota manufacturing sites in Japan due to a server that ran out of disk space, the company has revealed.

Routine server maintenance on systems responsible for parts orders was conducted by staff last week, Toyota revealed.

During the maintenance process, accumulated data in a company database was routinely deleted and organized, Toyota said. However, “insufficient disk space” led to an error that caused its systems to shut down.

This incident had a knock-on effect as backup servers were running on the same system, preventing staff from performing a switchover and taking down systems completely.

“Since these servers were running on the same system, a similar failure occurred in the backup function, and a switchover could not be made. This led to the suspension of domestic plant operations,” the car manufacturer said.

The outage lasted for over 24 hours in total, and systems were restored on 29 August after data was transferred to a server with larger capacity.

Toyota reiterated that the server outages were the “true cause” of operational disruption, following speculation that the incident had been due to a cyber-attack.

“We would also like to reaffirm that the system malfunction was not caused by a cyber attack, and apologize to all parties for any concern this may have caused,” it said.

Best practice was not followed

Manlio De Benedetto, director of systems engineering at Cohesity, told ITPro that the incident underlines the sometimes precarious nature of server maintenance and the necessity of a heightened focus on data resilience among IT practitioners.

“It looks like Toyota didn’t see this coming, and if they were monitoring it, then their team has not reacted to the critical issues in the right way,” he said. “In simple terms, the best practices are to know what you’re backing up, where from and where to.”

De Benedetto emphasized that organizations should employ stringent monitoring standards and robust countermeasures to ensure that maintenance processes don’t result in down-time and disruption for customers.

“Companies need to understand exactly which IT processes are the most important in the company and how they are related,” he added.

“We advise our customers to prioritize the systems in resilience categories. The highest category reflects the most important data, systems and processes, the loss or failure of which would cause the greatest economic damage.”

In this instance, he noted that the affected Toyota servers would be classified in the “highest resilience category” due to the risk that failure would bring production to a halt and incur significant costs.

In response to the incident, Toyota said it will conduct a thorough review of its maintenance procedures and “strengthen our efforts to prevent a recurrence”.  

What’s going on in Toyota’s tech teams?

This incident marks the third serious IT-related issue for Toyota in the space of three months. 

In May, the car manufacturer revealed that data belonging to more than two million customers in Japan was left “publicly available” for a decade due to a cloud configuration error.

Around 2.15 million customers are thought to have been affected by the leak, which lasted from November 2013 to April this year. 

In a statement at the time, Toyota said that the leak was caused by a “misconfigured setting” in its cloud environment. This incident was attributed to human error. 

Just weeks later, the firm warned customers in Asia and Oceania that their data may have been “publicly accessible” in a separate incident dating from October 2016 to May 2023. 

Exposed customer data included names, addresses, phone numbers, email addresses, vehicle identification numbers, and registration details. 

Once again, Toyota attributed the leak to a cloud misconfiguration as a result of human error.

Hello and happy System Administrator Appreciation Day 2023!

We'll be posting updates throughout the day looking at how the role has changed over the years, as well as stories from sysadmins themselves of how they've been appreciated over the years.

We'll also be covering the story of how the appreciation day came to be, and some fun initiatives being launched by members of the industry.

Stay tuned for all this and more...

To kick things off, let's look at where it all began...

The first-ever sysadmin appreciation day is credited to IT professional Ted Kekatos who is said to have come up with the idea after seeing a Hewlett Packard advert in a magazine.

The advert depicted an IT worker receiving gifts and endless appreciation by fellow colleagues, apparently to depict how much easier their lives had become after the admin bought the latest HP printer at the time.

According to an interview Kekatos did with Spiceworks, which you can read more of here, he thought the idea was so great - that a sysadmin could be showered with gifts for doing their job - he tore the advert out of the magazine and showed it to all his coworkers.

And that is how the first System Administrator Appreciation Day first came to be...

For those looking for ways to show appreciation to your organization's sysadmin, ManageEngine has a dedicated page for the day, filled with ideas, games, and tools to get into the spirit of the day.

They've even created a poem to mark the occasion:

Speed and accuracy galore, for they make our defences roar, to the ones who always score, may the wishes pour!

Maybe stick to software, guys.

First up, take a look at all the punny e-cards they've created.

Designed to be sent easily to your sysadmin with a simple online form, you can choose between a selection of general IT puns and characters. There's even one for the Star Wars lover too.

Also available through the page is a typing test that assesses speed and accuracy against that of a typical sysadmin.

If you can at least match their standard, you could be in with a chance to win some prizes.

You can also test your knowledge in an IT-themed, multiple-choice quiz.

Completion of all three activities can put you in with a chance of winning gift vouchers worth up to $500, the company says.

The sysadmin role is one that's perhaps best known for being the jack-of-all trades position in any IT team - having to know a little about a lot to keep the cogs turning in all areas of the IT stack.

Splunk says there are 12 core responsibilities of a sysadmin:

1. Monitoring and alerting

2. Managing user permissions and the administration of all applications and services

3. Managing SSO and passwords

4. Managing files

5. Defining system usage policies and procedures

6. Installing and maintaining software

7. Planning for redundancies, rollovers, and recoveries

8. Security

9. Maintaining documentation and runbooks

10. Detecting and remediating incidents

11. Performing post-incident reviews

12. Preparing and problem solving

What do you think about this list? Does that cover it all?

We also spoke to a number of industry pros to hear their thoughts on the people that keep every critical system running, and how under-appreciated they so often are.

Steve Santamaria, CEO at Folio Photonics, says:

“Sysadmins are the unsung heroes of the business world, whose importance cannot be overstated. They are the masterminds behind the scenes, tirelessly working to keep technology systems running smoothly and seamlessly. Without their expertise, businesses would face constant disruptions, downtimes, and vulnerabilities.

These dedicated professionals ensure the reliability and availability of critical systems, enabling employees to work efficiently and without hindrance. They are the guardians of data security, implementing robust measures to protect sensitive information from ever-evolving cyber threats.

Sysadmins also play a crucial role in disaster recovery planning, ensuring that organizations can swiftly recover from unforeseen incidents and maintain uninterrupted operations. Their tireless efforts in integrating new technologies, troubleshooting technical issues, and providing prompt support to end-users ensure that businesses stay at the forefront of innovation and maximize productivity. Sysadmins possess a wealth of knowledge and expertise, continuously adapting to new technologies and industry best practices to keep businesses ahead of the curve.

In a world where technology drives the success of organizations, sysadmins are the pillars of stability, reliability, and progress. They deserve our utmost appreciation and recognition for their unwavering dedication and indispensable contributions to the success of businesses everywhere.”

Manu Heirbaut, vice president of engineering at Datadobi, says: 

“Sysadmin day reminds us of the significance of those working tirelessly to provide IT services to their respective organizations around the globe. 

System Administrators deserve recognition for their efforts to maintain organizational infrastructure for everyone, and we must be mindful of their importance not only on sysadmin day but every day.

We can do this by investing in their craft and providing them with tools to automate tasks and address financial, sustainability, and organizational challenges associated with systems, improving the value of unstructured data. These unstructured data solutions can improve sysadmins' jobs and streamline business processes to make their work even more efficient."

Our more experienced readers will know that the sysadmin role now is substantially more different to what it was 30-40 years ago.

It's difficult to imagine any of us doing our jobs without our most trusted search engine but back in the day, Google didn’t exist - not until 1998 - which meant that documentation had to be more comprehensive to have a fighting chance at fixing issues.

There were, of course, also no USB ports let alone thumb drives, so called for a fat wallet full of floppies if you needed any software or tools. 

There was also no imaging, which meant that installations were all done individually, manually, and even if you had the exact same hardware, each one would throw different errors throughout the process. The good old days.

Things also weren’t so Microsoft and Linux-based. Remember NetWare? Skills in the network operating system are scarce nowadays but back in the early 1990s it was the go-to file and print server for most sysadmins, known for greater reliability and uptime.

Memory was also a major bugbear for many working in the industry at the time. Whether it was messing with config.sys to get drivers to load without sucking up huge amounts of memory, or having to pay prices like $1 per MB of RAM, certain things weren't as streamlined as they are today.

Hardware, generally, was far more finicky than it for modern sysadmins. 

Sure, you can overclock your latest CPU, but up until the Pentium line of chips, in most cases the voltage, clock speed, and crystal frequency settings all had to be set manually.

Hardware was often failing at a higher rate than it generally does now, meaning the role involved more physical equipment repairs in times gone by.

And who could forget about DIP switches? They were highly common and used for configuring hardware settings for interrupt request (IRQ) work - tasks that the modern sysadmin would rarely have to carry out.

Looking at the more recent history, prior to today, we asked current sysadmins about their fondest memories of how their work has been recognised on sysadmin appreciation day...

We received a range of responses, and we're glad to report most were nicer than the minority who have never experienced any love on their special day.

"Only thing I've ever gotten for Sysadmin Day was attitude," one told us.

"I fondly recall not one year when anyone other than other IT colleagues gave one f*** about it," said another.

"IT are the 19th century Irish of the corporate world."

And with that, some more positive experiences will follow...

This sysadmin is choosing to share the love, even though he might not be getting it from his own organization.

"I've decided I'm going to reach out to a vendor I worked with closely and say thanks for the assist in recent months. 

"My end-users are throwing me a dumpster fire of IT issues tomorrow to celebrate. Naw they do care."

And while it might not be an e-card from ManageEngine, who can turn their nose up at free sweet treats?

"A boss I had 10+ years ago would buy a whole bunch of Dilly Bars from DQ for us. I’ve not been that fortunate since," said another.

"Dave, you’re the best."

For those of you following along in the UK, sitting there as confused as I was reading that, allow me to translate:

Dilly bar: Round, chocolate-covered ice cream on a stick. Looks a bit like a Magnum judging by a quick Google search.

DQ: Dairy Queen - a chain of ice cream eateries in 20 countries around the world, but none in the UK.

"[Got a] free T-Shirt from a vendor. The one and only acknowledgement I've ever received."

One of the best parts about working in tech journalism is getting to travel fairly often  to cover big events, conferences etc. One of the second best parts about working in tech journalism is all the free t-shirts you get from attending said conferences.

Despite not being a sysadmin myself, I too would personally like to offer my special appreciation to all the vendors that have given me free t-shirts over the years. Best gym shirts going.

Now, this one sounds a little too cute to have been timed perfectly on sysadmin day, but it might be my favourite nonetheless...

"[I] set up a dozen or iPads for a special ed classroom and the teacher sent me a card with pictures of the kids using the devices. Card was signed by all the kids. Still have it many years later."

Now, this one is clearly not a sysadmin day-related story, but a good read regardless...

"I was a contracted admin at a customer along with another contracted admin we will call him Dan. Dan was known to be a gun slinger and did things without thinking then through especially just before long weekends. 

We will call the customer LSB. LSB was huge on large emails. LSB had a very fragile Exchange 2003 SP2 server that had to be pointed to a specific DC, pushing DB limits and DB fragmentation, DBs were approaching 65 GB which was huge for Exchange 2003. 

I was off Thursday and Friday that Labor Day weekend. Dan was instructed not to do anything intrusive over that Labor Day weekend, but that moron decided to take DB offline and reconfigure AD and got rid of the GC that exchange was pointed to. 

After AD reconfiguration he couldn’t bring exchange 2003 back online. LSB had a dead line and emails that they needed to get to, I had to cancel my weekend plans and save the day. Day after main guy at LSB wrote me a glowing recommendation on LinkedIn, thanked me very genuinely for and fired our firm."

Can't go wrong with a gift voucher, happy eating!

"I got a $35 gift voucher today for renewing our ISP service that costs $800/month. I’m taking the SO out to dinner tomorrow."

And finally, I guess this serves me right for asking Reddit of all places, there's always one...

"This one sysadmin day I was sitting in my office and this beautiful Colombian women from customer service walked in and immediately fell to her knees to worship the IT gods… and then I woke up. Good times. Very appreciated."

Had me in the first half to be fair.

I'd like to thank everyone who contributed on my Reddit post for all these stories - I hope you're having a great day filled with compliments, chocolate, praise, and adoration. 

And for those without a positive sysadmin day experience so far, fingers crossed today's the day that changes!

Right, I'm shutting my lid for the weekend soon, but before I go I thought I'd leave with you some fun IT facts I found on the web...

Did you know Google used to hire goats as a low-carbon approach to trimming the lawn at its Mountain View HQ?

You've got to be kidding, right? Get it? Goats...

I totally stole that joke from Google's blog on the matter. I'm sorry.

But yeah they hired around 200 at a time for roughly a week to avoid polluting the air with the mower's fuel and noise form its engine.

Not a baaaaad idea if you ask me!

Up until 1995, registering a domain name was completely free.

It was also the very early days of the internet, meaning the chances were that if you had an idea for one, it was probably available.

In the US, the latest available data (2019) estimated that 265,331 households still had dial-up internet subscriptions.

It's difficult to know for sure now as dial-up internet is no longer tracked in official broadband surveys.

I still remember the days of dial-up. On any given evening it was always a gamble whether or not we'd be able to connect to AOL, being based in deep rural England it's never been the best for internet access but dial-up was a different beast.

That'll be me signing off for the weekend, everyone.

Thanks to those that followed along doe the entire day, and apologies to those who were subjected to the goat puns towards the end. 

Wishing all the best to each and every sysadmin out there today, and I hope you all have a great weekend. Bye!

Kantar has always relied on legacy infrastructure that limited its ability to innovate and deliver excellent service. 

By launching a  transformation program with Kyndryl, though, the 31-year-old marketing data and analytics provider, aimed to modernize capabilities to support its vision.

For decades, Kantar operated as part of the global advertising and PR giant WPP. This meant the company relied extensively on WPP’s shared infrastructure and IT systems. However, in 2019/20 Kantar was acquired by a private equity firm and spun off as an independent company.

“Kantar used to be part of the WPP Group, and we came out of WPP back in late 2019, early 2020 as part of a private equity deal,” explains Dave Stevens, CIO for Technology Services at Kantar. “So, we had a trigger from that perspective that we needed to stand on our own two feet, and stand up all of our own technology to separate from WPP.”

Standing on your own two feet

This dramatic shift meant Kantar suddenly needed to overhaul its technology strategy and infrastructure. No longer able to leverage WPP’s resources, the company didn’t have long to build autonomous systems and operations to support its global business across more than 90 markets. For Kantar, the spin-off served as a catalyst to finally modernize legacy IT systems that were limiting agility and performance.

"We had to really provide independent technology for Kantar colleagues and also to support all of our client technology to separate us from WPP,” says Stevens. “We created a program of work that touched five key areas within my space.”

In essence, the private equity deal forced Kantar to confront shortcomings in its technology capabilities. This prompted the firm to launch an ambitious transformation project designed to give it the modern foundation required so it could stand a chance of achieving its aims of becoming an industry leader.

Kantar defined key goals for the project around quality, security, and performance. "We wanted to ensure that we delivered the best possible service that we could to our colleagues globally," Stevens said. After strategic planning, Kantar focused on upgrading core domains like hosting, networks, end-user technology, security, and data.

Rolling out new infrastructure and capabilities

To roll out new infrastructure, Kantar coordinated a systematic multi-year program focused on methodically transforming systems and operations across the company’s sprawling global footprint. Kantar turned to IT infrastructure services provider Kyndryl to modernize the digital workplace environment.

With more than 90 markets and 26,000 employees worldwide, executing this plan was complex. The technology overhaul touched hundreds of offices and required standardizing platforms while accounting for regional differences.

Despite this complexity, Kantar judiciously executed the technology rollout without major disruptions. A key milestone came in migrating all staff to new digital workplace systems and collaboration tools.

"We managed to migrate 26,000 colleagues from an existing platform to our new foundations without any business interruption at all. It was genuinely seamless,” remarks Stevens.

The migration was a major accomplishment considering employees across continents and time zones had to adapt to new ways of working. Beyond enabling a modern workplace, Kantar rolled out shared infrastructure for core capabilities like security, networks, data management, and application services.

In most cases, new systems were implemented sequentially by geography. Kantar’s program management office helped coordinate equipment delivery and installation across sites. Extensive testing also ensured new interfaces and apps were integrated smoothly.

Thanks to extensive planning and phased rollouts, the complex infrastructure transition was completed on time and budget without significant hurdles. This positioned Kantar to realize the full benefits of its technology investments.

Using data to measure success

The overhaul delivered measurable gains across critical performance indicators. Kantar leveraged data-driven metrics to realize improvements in quality, reliability, and agility.

One area of notable enhancement was the service desk, with satisfaction rates among users rising significantly under the new system. “The quality of the service we deliver has improved things like satisfaction on the service desk,” says Stevens. “So now, if people get in contact with us in technology, more than 80% of the time they're really excited about the service that they received, and that's a dramatic improvement on where we were previously.”

Stevens notes his team can now stand up services "much quicker than we could previously" thanks to increased automation and cloud migration. "The data really speaks to that question," he says. "And if we look at the metrics that we measure ourselves by we've improved almost everywhere."

By leveraging measurements and analytics, Kantar had objective evidence its technology transformation was having the desired impact. Better performance and quality were translating into tangible gains in operations, service delivery, and employee experience.

For Stevens, the most important lesson from the project was the significance of change management and communication. While deploying technology was crucial, getting people to embrace new processes was more challenging.

With thousands of employees across continents, helping staff transition to modern systems required extensive planning. Kantar knew it couldn’t underestimate the human side of digital transformation.

Deutsche Bank has announced it has completed the fourth and final phase of its long-running Postbank technology integration.

The German banking giant said the finalization of its IT platform merger will deliver cost savings in 2023 and 2024, as well as annual savings of €300 million ($326.52 million) from 2025 onwards.

Deutsche Bank has been working on its acquisition of Postbank since 2008, working to take on its banking rival’s client base and connections to the country’s postal system. 

In 2010, Deutsche Bank won majority control to become Germany’s largest retail bank, before completing the acquisition in 2012 for a reported total of €6 billion ($6.54 billion - 2023 conversion).

The bank revealed it has now completed its final wave of its IT platform merger over the weekend, which saw 4 million contracts tied to 2 million Postbank customers transferred across to its IT system. 

Many customers were temporarily unable to access the normal range of services as the process was carried out.

With customers now benefiting from the new system, Deutsche Bank is now working to decommission Postbank hardware and software, which it says will contribute towards the overall expected cost savings.

Migration issues 

Deutsche Bank’s long-running Postbank merger has not been without its issues, particularly since implementing plans to shift Postbank’s technology to a new IT platform. 

Back in January, the Berliner Kurier reported that the second wave of customer migrations had led to numerous issues, including customer reports of online transfers not working, telephone banking being unable to be activated online, as well as statement printing issues.

Customers also reportedly experienced error messages when accessing the online message box, with the bank reportedly only being reachable by phone during that time.

As reported by the German news outlet, disgruntled customers took to internet forums to share their anger and frustration at both the design and function of the new online setup. 

"I haven't been able to use online banking for 14 days," wrote one customer, while another said all of their details had seemingly vanished: “My account just disappeared and no one knows why. My money is somehow gone, too. I can't even see my bank balance”.

"Out of five attempts to make a transfer by phone, I have to cancel four times because there are problems with the voice computer,” said another. “Then you are switched through to the employee and get the announcement that the system is overloaded. Thanks to the high volume of calls, no processing can take place. After 50 years, I'm going to change now."

A spokesperson for Deutsche Bank told the Kurier at the time that, to keep customer impact at a minimum, further waves would only be carried out on public holidays or weekends. 

However, customers have continued to leave critical, one-star reviews of Postbank on TrustPilot as the IT migration continued through its final phases. 

Overall, Deutsche Bank says its now-completed IT conversion process has included the transfer of around 19 million Postbank contracts to its IT platform.

Every office comes with its own unique quirks — we all know this, of course. They might include dodgy windows that won’t close properly, meeting rooms with broken webcams, or an unnecessarily loud colleague. But spare a thought for Arturs Banks and Rajeev Bhandari, head of IT and third-line infrastructure analyst, respectively, at Fulham FC, whose workplace environment is highly challenging. 

Managing the IT and cyber security needs of a professional soccer club is challenging for a number of reasons, chief among which is the ‘office’ layout. There aren’t many headquarters in the world, after all, that’s cleaved out its core, forcing staff to take the longest route possible when traveling from A to B.

The geography of Craven Cottage, home of Premier League stars such as Alexander Mitrovic and Andreas Perreira, is vastly different from that of, say, Apple’s Cupertino campus. The layout of Banks and Bhandari’s office — a 25,000-seat stadium in West London — they say, proves a major headache.

The soccer stadium struggle

“It's not a data center environment, so often our equipment is in various places around the stadium, because of the size of it,” says Banks. “We have to have a lot of local equipment dotted around to supply the whole stadium so we can't just have a centralized point where everything is air-tight and up to the standards that most larger organizations or more office-like organizations would have. 

“You can have a van driving over your fiber cables, or a beer keg being dropped on your data cable. That is the reality of our day-to-day.”

Keeping the stadium connected and ensuring systems remain online is absolutely essential to the smooth running of match days for Fulham FC. Everything from site-wide security to keeping vendors’ payment systems online relies on Banks and Bhandari’s expertise. And, to keep these systems online, the team relies on an arsenal of equipment.

“We have network locations dotted around everywhere,” says Banks. “So it's not like one rack with three switches, and that runs everything. No, it's 20 racks with three switches each and various other pieces of network equipment.”

All equipment is spread between the four stands of the sprawling Thames-adjacent stadium, which makes patching each switch the biggest of their headaches, they say. Adding to the obvious geographic complexity, the pair also need to instigate upgrades in stages to minimize downtime.

Top-flight cyber security

Windows and Linux servers are patched monthly, they say, but often networking equipment is only patched when the team receives “a serious enough bulletin” from vendors such as Cisco. The strategy falls in line with most other organizations, realistically speaking. Of course, in a perfect world, everything would be patched seamlessly and lightning-fast, but with issues arising from applying fixes, it’s common to see patching strategies take a similar form to Fulham’s.

Like any Premier League soccer club, the need for robust cyber security is essential. Fulham were promoted to the top flight for the 2022/23 season, having spent the previous three seasons in the second division. The team had to be even more scrupulous than they were used to. Phishing, for example, is a major concern, given the Premier League’s requirement for club officials’ contact information to be posted online. Attacks, therefore, targeting the CEO and finance director, among other senior staff, are common.

Fulham FC has never actually succumbed to a serious attack, and it’s perhaps due to the team’s round-the-calendar work to achieve a state of cyber readiness that’s contributed to the achievement. When the weekend stars spend time over the summer relaxing in various sun-soaked locations across the world, Banks and Bhandari are commissioning annual penetration tests to strengthen the club’s cyber resolve. The most recent one, Bhandari says, shone a light on the club’s password practices.

“I think the biggest [issue] we had to take quite serious action on was password complexity,” Bhandari says. “Basically purchasing a tool that will restrict password reuse and enforce more complexity onto passwords. 

“There was also a vulnerability that allowed the pen testers to gain access to our domain controllers. But, that was on an authenticated network with credentials, so they were kind of halfway there. 

“But they managed to find one very old unpatched Linux box, which we actually didn't even realize was still running. Then once they actually decrypted our AD passwords, that's where we saw the biggest report. So it was a 100-page report and 99 pages were just bad passwords.”

The club already enforces a three-month password reset, but the pen test’s findings indicated it wasn’t enough. They invested in Specops’ password policy tool to enforce greater complexity beyond the weak passwords that were too often used. Bhandari says the names of the manager and key players, for example, featured heavily in passwords and weren’t the most secure.

A backup strategy for the modern age

Bolstering its cyber security posture even further, Fulham FC recently signed a three-year partnership with Acronis and its technology partner EveryCloud to implement Microsoft 365 backups across the club and the club’s charitable foundation, and disaster recovery for the foundation only. The backup solution for the club’s Microsoft 365 files is already up and running, with the remaining upgrades expected to complete shortly. It’s the key component of Fulham FC’s partnership with Acronis and EveryCloud.

It’s also already proven its worth; in just one month, for example, the team restored a staffer’s lost email files. Fulham’s IT experts declined to detail the nature of the deleted emails but did say such incidents “could have quite significant impacts”, including, say, carrying implications for player contracts.

Agreements made over email are contractual and binding — so if an agreement between two clubs is disputed, and one couldn’t provide the evidence to support its position, it would carry huge ramifications.

“We can't quantify these impacts because we just provide the service to the business — a lot of it is outside what we get told,” says Banks. “So it could have been a dispute over a £5 refund for a ticket, it could have been a dispute of a £70 million player.”

Banks also highlights the importance of having such measures in place at Fulham FC’s foundation, which runs soccer outreach schemes with children and disabled players, among other initiatives. Banks alluded to a child sexual abuse scandal that rocked English soccer in 2021, using it to underline the need to have records of emails and other files when safeguarding vulnerable people.

Backups, in addition to preventing the loss of sensitive files, also act as the club’s ransomware defense. The club stores 30 days’ worth of daily backups, after which time the only restore point is the first day of every month. Beyond that, the club keeps restoration points on a once-yearly basis.

As long as any attack doesn’t impact systems that protect fans’ safety, such as CCTV cameras, radios, and stadium floodlights, a system shutdown could commence. In this scenario, stadium turnstiles would open fully to anyone who approached them and Fulham would simply “assume that everyone who comes in has the tickets”.

If fan-safety systems were to fall, that’s when the Premier League itself would step in, either delaying or postponing the game. Luckily, Fulham FC has never been targeted with ransomware to the extent it’s prevented a match from taking place.

Naturally, Fulham FC stores as much data as any large organization. From fan and member data, to commercial contracts, player performance analytics — all the way to match highlights from the 1900s. As such, the club must be smart about what data is backed up and what isn’t.

“Anything that's nice to keep, but isn't business critical, we potentially don't back up and just keep it on redundant storage,” says Banks. 

“Because the other thing we have to take into account with cloud backups, and the more files we send to Acronis, the more impact it has on our bandwidth. So, obviously, we have to run these backups overnight, and be selective because we haven't got unlimited bandwidth. We have to strike a fine balance between cost, performance, and our requirements.”

HPE Discover is back once again in fabulous Las Vegas, with the company eager to show off its latest developments, products and strategies.

Six years after the company’s first outing as Hewlett Packard Enterprise (HPE), following its split from HP Inc in 2015, the business has changed quite significantly – in strategy if not in what it’s actually selling – with HPE GreenLake becoming its central focus for almost everything.

HPE GreenLake, for those not familiar, is the company’s ‘as a service’ offering. It allows organizations to use HPE’s hardware on a consumption-based model; you only pay for what you use and can spin instances up and down as you see fit, much like you would in a public cloud. 

The difference is the hardware is located either on-premises or perhaps with a colocation provider, rather than in the data center of a hyperscaler such as AWS, Azure, or Google Cloud.

While it started small in 2017, with just a handful of applications, GreenLake has grown to become the focus of the company’s headline announcements year after year. You would almost be mistaken for forgetting HPE sells enterprise hardware, were it not for the fact that any cloud has to run on some kind of infrastructure.

Show me the AI

What does all this mean for HPE Discover 2023, then? Given CEO Antonio Neri bet the farm on GreenLake in 2021, it’s probably safe to say we’ll hear very little about new hardware launches and a lot about new HPE GreenLake offerings. 

HPE’s latest big announcement here came in the form of GreenLake cloud services for high-performance computing (HPC), launched in December 2020. HPE has some serious HPC chops – supercomputing granddaddies Cray and SGI have been HPE brands since 2016 and 2019 respectively – and I would be excited to hear more of what they’re doing in this area. 

Of course, the trend currently swamping the tech industry (and everything else) is artificial intelligence (AI), or more specifically generative AI; the DALL-Es, Chat-GPTs, and Bards of this world all rely on top-end hardware. 

HPE has already made moves in the AI space, with Ezmeral for ML (machine learning) Ops and GreenLake for ML Ops, as well as swarm learning and a partnership with NVIDIA for enterprise-focused AI. With Dell Technologies partnering with NVIDIA for enterprise AI too, as announced at Dell Technologies World in May, surely it’s time for HPE to make some additional moves in this area if it wants to stay ahead.

Are HPE's acquisitions coming into their own?

It’s always worth keeping an eye on what comes out of acquisitions – for example, 2019’s big hardware announcement, Primera, came out of HPE’s acquisition of Nimble Storage two years prior.

There haven’t been any acquisitions on the scale of Nimble, Cray or SGI in recent years, but an intriguing one is the recent purchase of OpsRamp. From a GreenLake point of view (because everything is from a GreenLake point of view these days), this acquisition makes total sense given OpsRamp was an IT operations management company. 

Boasting automation capabilities and the ability to work across on-premises infrastructure as well as cloud, it’s an easy fit for HPE’s flagship strategy. If there’s no nod to how this will integrate into GreenLake services – even in the abstract – I’ll be very surprised.

With Dell Technologies once again snapping at HPE’s heels in consumption-based computing with Project Apex announcements in May, I hope the company in the green corner has something of interest to counter with next week.

ITPro will be covering HPE Discover 2023 between 20 June and 22 June. Stay up-to-date with the latest news and updates by following our live blogs, and subscribe to our newsletter to catch the latest in-depth stories.

The Department for the Environment, Food, and Rural Affairs (Defra) has said it will require up to £726 million in funding to modernize legacy IT systems between 2021 and 2025 to improve digital services, according to a new report.

Following a review of the department’s IT infrastructure by the Public Accounts Committee, Defra said it believes it can unlock cost savings of between £20 million to £25 million each year by modernizing infrastructure. 

However, the committee noted that a “lack of overall vision” means that changes implemented now could lead to “wasted time and money” and may not be appropriate in the longer term.

The review concluded that Defra is using “outdated and difficult to use” legacy IT systems which are hampering its ability to provide efficient digital services. 

Defra and its offshoot organizations process around 14 million transactions each year that still involve paper forms and applications. These outdated processes are making work conducted by the department “inefficient and expensive”. 

At present, 80% of Defra’s IT applications remain either in extended support or are completely unsupported by suppliers. 

This means that the department could incur additional charges for updates while poorly optimized or unsupported systems have a negative impact on customers. 

“It doesn’t measure the cost to users of its unmodernized digital services, so it is not possible to assess the total burden they place on other organizations and the wider economy. For example, previously vets had to buy old laptops to be able to run the programs they needed to use,” the committee wrote. 

Defra said that it has embarked on a “fundamental review and potential restructure” of the organization. However, the committee warned that it does not yet have a “concurrent proactive strategy for transformation of its digital services”.

Similarly, the committee concluded that Defra has failed to overhaul its long-term reliance on paper forms or make applications for customers more widely available via mobile phones, for example. 

Comprehensive IT overhaul needed at Defra 

Sir Geoffrey Clifton-Brown, deputy chair of the committee, said Defra’s IT processes are highly inhibitive to customers that engage with the department.

Defra systems are used by a wide range of customers and are “critical to the country’s trade, disease prevention, flood protection, and air quality monitoring”, the committee said.

“Defra’s IT systems are so outmoded and disconnected - where they exist at all, instead of paper forms - that in some cases the professionals who keep our food, water, and air safe have been forced to buy obsolete equipment just to fill in the forms to fulfill their regulatory responsibilities,” he said. 

“We are facing down rapidly spreading animal diseases, maybe the next pandemic, with systems that may rely on moving paper forms around. This cannot continue."

Sir Geoffrey said the committee will “not accept a situation where Defra spends hundreds of millions of taxpayers’ money on a disjointed upgrade program” and called for a comprehensive overhaul of its IT estate. 

“It’s time for a complete overhaul at Defra, with a concurrent, proactive digital strategy that matches every step.”

Capita has revealed it expects to incur up to $25 million in costs in the wake of a recent cyber attack which disrupted operations at the outsourcing firm. 

In a statement today, Capita provided an update on its response to the attack which occurred last month. 

The firm said it expects to incur “exceptional costs” of between $18.9 million and $25 million associated with the cyber incident. 

A breakdown of these costs showed the money will be spent on fees for specialist professional services, recovery and remediation costs, and “investment to reinforce Capita’s cyber security environment”.

Capita also confirmed that it has taken “further steps to ensure the integrity, safety, and security of its IT infrastructure”. 

An investigation has so far revealed that compromised data from less than 0.1% of its overall server estate had been affected during the incident. 

Capita previously estimated that around 4% of the company’s servers were affected by the breach back in April.

“Capita understands now, based on its own forensic work and that of its third-party providers, that some data was exfiltrated from less than 0.1% of its server estate,” the firm said in a statement. 

“Capita has taken extensive steps to recover and secure the customer, supplier and colleague data contained within the impacted server estate, and to remediate any issues arising from the incident.”

Capita’s data breach: Counting the cost 

The costs incurred by Capita in the wake of the recent cyber attack are significant, and highlight the growing financial risk to organizations that experience a security incident. 

Research from the Ponemon Institute and IBM Security last year found that the average cost of a data breach reached an all-time high of $4.35 million. 

The study noted that this figure represented a 2.6% increase from the year previous, when the average cost of a breach stood at $4.24 million. 

Long-term, the costs of remediation and recovery for Capita could be significant, according to Brad Freeman, director of technology at SenseOn. 

Speaking to ITPro, Freeman said the organization faces a two-pronged challenge in terms of bolstering security and assuring customers that its systems are secure. 

Capita provides IT outsourcing services to a number of high-profile organizations spanning both the public and private sectors, including the UK’s Ministry of Defence. 

“Capita's network and systems will need to be assured that they are clean which may involve rebuilding key systems. As an active attacker is likely to have been on the network, this remediation could involve investigating and rebuilding potentially hundreds of systems,” he said. 

“The technical and organizational complexity of Capita compounds the problem, likely making investigation, remediation, and restoration a slow and expensive process. I wouldn't be surprised if total remediation costs exceed the currently projected figures.”

In Germany’s western region of Hesse lies the city of Frankfurt, situated on the river Main. This area has seen rapid growth in data centers over the past few years, with conditions making it a highly-sought territory to install new IT infrastructure.

Despite being roughly 16 times smaller than London, Frankfurt has the highest market share of the FLAP-D market – Frankfurt, London, Amsterdam, Paris and Dublin. The German city occupied 50MW of a 200MW market share (25%) in 2018, according to Kickstart Europe, which surged to 150MW of 390MW (39%) in 2021. Trailing behind were London and Paris – each with 80MW. 

Such rapid growth might be good for Frankfurt’s data center industry, but can impact other businesses when it comes to energy usage, maintaining a water supply, and even physical space that could be used for, say, housing. To control the sudden rise in data center occupancy, the city passed legislation designating where data center can be established. 

The package of measures ensures data centers can only be built in specific districts, among other stipulations. Not everybody approves, though, not least the industry. Other cities around the world – including the rest of the FLAP-D market – are nonetheless keenly monitoring these developments, casting an eye to whether the rules will pave the way for a more sustainable approach to data center expansion.

Why Frankfurt has become a data center hub

Frankfurt has become a data center hub thanks to Germany’s strong economy, says Sebastien Bonneau, partner at Eversheds Sutherland. Its GDP in 2024 is expected to grow by 1.7%, compared to France’s 1.3% and the UK’s 0.9%, OECD figures show. It also had the fourth highest GDP in the world as of September 2022, according to Investopedia analysis.

Frankfurt has also excelled as a hub – with the highest density of data centers of any German city – due to the needs of the local economy. It houses the European Central Bank (ECB), various national and international banks, and the German Stock Exchange. Plenty of European companies have established themselves there, with businesses also taking advantage of the Frankfurt-based Deutsche Commercial Internet Exchange (DE-CIX).

DE-CIX nodes in Frankfurt account for the most data transfers worldwide, according to Mordor Intelligence, while Frankfurt also has a high network density – meaning it has a vast number of high-speed connections. This makes it very efficient to move data across Europe from a centrally located city like Frankfurt, says Eric Boonstra, Iron Mountain VP and GM for Europe. “It’s also a strategic location for other markets such as Romania, with smaller needs for lower latency,” Bonneau adds.

Another reason why data center operators are expanding in the city is because of GDPR. “The latest set of European Union (EU) data regulations is driving the dissemination of data into a larger number of facilities in different countries, by stipulating data is stored in the country in which it’s generated,” Boonstra explains.

Not everyone is as enthused about the growing data center industry, given that branching out into new areas can put fresh strain on energy, water, and land supplies. Projections show the industry would need an additional 75 hectares of space to meet demands by 2030, with an investment of €500 million (£437 million) per year, explains Anna-Lena Kempf, an IP/TMT lawyer at Pinsent Masons.

Frankfurt’s municipal council, therefore, devised an urban development concept – the Frankfurt Data Centre Masterplan – in June 2022 to counteract large data center operators from establishing new “data-center clusters” in the city, Kempf adds. This regulation changed data center urban planning rules so existing clusters could be strengthened, but further expansion must be curbed. Frankfurt has been carved up into ‘suitable’, ‘restricted’ and ‘exclusion’ areas for data centers, setting it apart from the rest of the FLAP-D market.

Controlling data center expansion

The rules identify the best locations for data center growth so businesses don’t have to compete as hard for space or resources, says Kempf. The commercial districts green-lit for data centers are Sossenheim, Rödelheim, Griesheim, Gallus, Ostend, Fechenheim and Seckbach. The industrial parks in Höchst, Griesheim and Fechenheim are also fine. The rest of the city, and other industrial areas, are off-limits.

“Updating the commercial area development program is only one part of a larger package of measures to integrate data centers in a way that is compatible with the city and the climate in the future,” Kempf says. Other measures include a city-wide heating system to use waste heat from data centers, as well as greening the facades and roofs of buildings. Additionally, new data centers will need to run on green electricity.

This is only the beginning, with the German data center industry set to be more heavily regulated in future, especially in terms of power consumption, since grid capacity is often limited, says Valerian von Richthofen, an energy partner at Pinsent Masons. The German Energy Efficiency Act (Energieeffienzgesetz) is in the works, which contains a separate section for data centers. Then, at an EU level, the Energy Efficiency Directive (EED) aims to reduce the bloc’s energy consumption by 2030, with data centers particularly under fire.

The regulations don’t end here. Future guidelines will also address urban planning quality, climate compatibility, and resource consumption, Kempf adds. This will affect data centers’ planning, construction, and operations, and make sure they contribute to sustainability goals.

Building a blueprint for sustainable data centres

“We expect that many other cities will impose similar requirements on the construction of data centers, especially in order not to miss their climate targets,” says von Richthofen. “This trend is already emerging. Not only cities, but also federal states, are developing concepts and guidelines for sustainable data centers, such as the state of Baden-Württemberg.”

Similar regulations have also been implemented in Amsterdam, another FLAP-D member, as well as Singapore, says Boonstra. Amsterdam for example, placed a ban on building new hyperscale data centers in 2022, although it made an exception for Microsoft. The Dutch city also adopted policies to save energy and encouraged the construction of underground electricity networks.

“Each city will have its own specific reasons for introducing legislation to manage the development of data centers – in Frankfurt the key driver was new urban development objectives in what is a relatively small city,” he says. Boonstra expects similar rules to be introduced across Europe but sees them as a positive for the industry. Companies have already made great strides to become more sustainable and minimize the environmental impact by developing ways to generate energy, reuse heat, and recycle, with such rules complementing these efforts.

Frankfurt had to do something to control this sprawling industry, so it could oversee any future growth sustainably and ensure other businesses aren’t compromised. A resistant sector may be looking on with bated breath, but more time is needed to examine whether Frankfurt’s regulations will be successful. Considering the industry is widely publicizing its sustainability ambitions, however, the regulations may be a blessing in disguise if it helps them along the way. If Frankfurt’s plan succeeds, it’s only a matter of time before other members of FLAP-D attempt to replicate these measures.

IT outsourcer Capita has admitted its “cyber incident” resulted in a data breach, with “around 4%” of its server estate impacted.

It said “there is currently some evidence of limited data exfiltration” and that the data “might include” customer, supplier, or colleague data.

The announcement is the most transparent account of the incident, the details of which  have been speculated for weeks.

Capita said that the “cyber incident” mainly affected staff access to Microsoft 365 products, but this access has now been restored.

The majority of Capita’s client services were not impacted by the incident and remained in operation, and Capita has now restored virtually all client services that were impacted,” it said in a regulatory notice today.

Capita said investigations have shown that the intrusion began on 22 March and was “interrupted” by the company on 31 March.

That day, Capita said it was experiencing “an IT issue” but it wasn’t until 3 April that it described it as a “cyber incident”.

Ransomware group Black Basta claimed responsibility for the attack, posting a number of documents online, but Capita has still not named the group in public-facing communications.

Earlier this week, Capita emailed shareholders explaining that they were still investigating whether the leak was genuine and if the files actually came from Capita, suggesting they could have come from other sources or the public domain.

The files included in the leak were sensitive in nature, such as passport scans, job applications, building floorplans, documents marked ‘confidential’, and files related to “Capita Nuclear”.

Capita’s client list includes major organizations in the UK including mobile operators O2 - the call centers of which experienced outages - and Vodafone; the NHS; various government departments such as the Department for Work and Pensions; plus the British Army and Royal Navy, among others.

According to industry expert Kevin Beaumont, threat intelligence data, which does not appear to have been made public, indicated earlier this week that Capita’s endpoints were found in their monitoring telemetry for Qakbot malware over a week prior to Capita’s announcement of an IT incident. 

“In English, Capita had hackers inside for weeks,” he said.

If true, the data would confirm Capita's admission that the intrusion began in March.

Although Black Basta is a known ransomware group, there is currently no indication that the incident involved the group’s encryptor.

If operating under a pure extortion model, the attack follows several in recent weeks from known ransomware gangs opting to avoid using encryptors in their attacks.

ALPHV’s attack on Western Digital appears to be a pure extortion incident, as does the myriad attacks from Cl0p abusing the GoAnywhere MFT vulnerability back in February and throughout March.

Black Basta is considered a sophisticated threat actor and usually operates using double extortion tactics. 

First discovered in 2022, according to Kroll, it uses a range of unique tactics to conduct attacks to steal data and infect systems with its ransomware payload.

The former CIO at TSB Bank has been fined for his involvement in the company’s 2018 IT migration which saw customers locked out of their accounts. 

Carlos Abarca, who led the botched IT migration, was handed an £81,620 fine by the Prudential Regulation Authority (PRA) for failing to take “reasonable steps” to ensure that the bank supervised its outsourcing arrangements with a third party during the project.

An investigation by the PRA found that Abarca “failed to ensure that TSB had obtained sufficient assurance from the third party” that the IT migration could be successfully carried out. 

Abarca was responsible for TSB’s outsourcing relationship with its main third-party supplier for the IT migration program. 

However, the PRA found that the former CIO failed to ensure the third party’s “ability and capacity were adequately assessed on an ongoing basis”.

Similarly, the investigation concluded that Abarca failed to ensure that TSB had obtained “sufficient assurance” over the third party’s readiness to operate the new IT platform.

Sam Woods, deputy governor for Prudential Regulation and CEO at the PRA, said Abarca was found to have breached the PRA’s senior manager conduct rule 2 and that his conduct during the program “fell below the standard” the regulatory body expects.

“Senior managers have an essential role to play in ensuring that firms manage and supervise outsourcing effectively,” Woods said in a statement.

“In this case, the PRA has fined Mr AbarcA because his management of a key outsourcing relationship fell below the standard we expect.”

In its statement, the Bank of England said Abarca agreed to resolve the matter with the PRA, which resulted in a 30% reduction in the overall fine imposed by the PRA. Without this discount, the financial penalty would have been £116,600.

TSB’s botched migration

The April 2018 migration project at TSB had intended to update its IT systems and migrate data for corporate and customer services to Banco Sabadell’s systems as part of a merger.

Although the migration was initially successful, the platform subsequently experienced major technical issues, resulting in significant disruption to TSB banking services. 

In-branch, telephone, online, and mobile banking services were all severely disrupted due to the failed migration, which affected millions of customers. 

Some customers were left without access to banking services until December that year, and the company was forced to pay more than £30 million in compensation to affected customers. 

The incident also prompted regulatory action against the high street bank. In December last year, the Financial Conduct Authority fined TSB £48.65 million. 

This fine marks the first penalty imposed on an individual involved in the failed migration, according to the Bank of England.

The industrial metaverse looks set to help transform almost any complex task that requires advanced modelling or 'next-phase' simulation tooling, moving it into pole position for solving multiple industrial and IT challenges.

According to Prith Banerjee, chief technology officer at Ansys, the metaverse will facilitate the modelling of laws of physics in greater detail than today's digital twins. Digital twins have been a great business asset for years, but already many ventures are pivoting to using the metaverse, as exemplified by the recent partnership struck between Siemens and Nvidia.

"If you have to change the design of a clay model of an aircraft wing for another run, each time you do it, it costs $10 million. Already, with a virtual wind tunnel, if we say a wing is going to fly, it’s going to fly," says Banerjee.

Banerjee defines digital twinning as modelling physical assets with sensor-enabled links between the physical asset and the virtual model – increasing accuracy, predictability, cost savings, and safety by further enabling remote working and accelerating innovation.

Finding a business case for the metaverse

Digital twin data can reveal how, say, a robot is performing today and what happens if different data is fed in on changing conditions, such as hotter weather or component failure. If bidirectional flows of information are enabled, automation working off digital twin data can do things like shut off heavy equipment in specified circumstances.

But metaverse takes the concept further still. "With internet powered by 3D, the metaverse is about making things as if you're almost actually there at the time," Banerjee continues. "With Zoom, I can see and hear you, but that's all. Metaverse is about how close can you go to absolute reality."

It can do modelling and predict consumer behaviour en masse, but engineering companies like Ansys seek 3D visualisations in real-time for fostering efficient, sustainable industrial design and manufacturing processes.

"Companies building industrial systems, whether wind turbines or solar power plants, in the past, would have to physically go inside the lab with multiple R&D people working together. With the metaverse, the physics you once had only 'on the other end' become replicable everywhere," Banerjee explains.

"If you compare gaming engines like Unity, they might have you driving around in a race car, it feels almost like reality, but not at the level of physics."

Mimi Keshani, co-founder and COO at Hadean, agrees, adding that gaming environments like CCP Games' Eve Online, with its multiple interacting entities, are created using "exactly the same tech" used to develop a synthetic training environment or digital twins of an existing process.

"You can save PhDs from repeating the same tiny difference in experiments over and over, those two minutes assigned to that eight hours of set-up to repeat exactly the same experiment," she points out. "Reduce complexity, reduce costs, reduce your footprint, make better decisions. Actually, simulation is our only power for telling the future."

Modelling to save money and innovate

Simulation is a highly complex emergent – dynamically evolving and learning in real-time – that’s being used to make decisions. These include data on hardware lifecycles, pan-national collaborative supply chains, sustainable manufacturing, or human behaviour en masse, Keshani agrees.

Of course, some of this is being done already for testing, evaluation and analysis of materials used, supply chains and more. The metaverse is about evolving towards still more accurate simulations, pending investment in remaining challenges around data quality and structuring, skills, security and interoperability. Also, abstractions must be built on top to achieve service-type technology set.

"(Companies should) use the standards and comply with things in ways that make sense across the industry," Keshani recommends, adding vendors are going to have to meet businesses halfway, offering more help beyond SDKs and recommending C++ training. "That's going to be a key challenge."

Tom Fairbairn, distinguished engineer at data mesh company Solace, notes its customer Unilever's 2000 ships transport cargo worldwide subject to ever-changing conditions rippling across its network. Millions of pounds can be lost or saved based on just-in-time decision-making, affecting not just Unilever but the whole supply chain. Even containers that are sitting empty cost money, Fairbairn says.

"They have satellite data tracking of ships. It's about grabbing that data as it occurs and doing something with it – juggling production schedules, updating logistics partners so lorries aren't sitting waiting for containers and so on," he says. "[They need a] virtualisation control tower, with a real-time view of exactly what's going on over the ocean."

Advanced machine learning can better triage inefficiencies and delays and help model knock-on effects related to specific decisions as they progress. When that can happen in real-time in both directions, that begins to indicate how the metaverse can deliver fuller visibility and control.

"You can determine and act on the variance in the outcomes, or potential outcomes, modelling effects of uncertainty," Fairbairn says.

Tapping into data to boost productivity

For Sylwia Kechiche, principal analyst, enterprise at network intel provider Ookla, applying AI and machine learning to large datasets merged with third-party sources in the metaverse will increase productivity and revenues across manufacturing.

"Data has become key," Kechiche confirms. "More intelligent planning tools can offer greater insights into sustainability, mapping out the entire product lifecycle."

Digital twins can be seen as early-stage – or a component of the metaverse – although standards for every aspect of the metaverse still require definition by the Metaverse Standards Forum (MSF) and others, including around real/virtual world integration, 3D asset interoperability, digital asset management, capabilities, avatars, privacy and more.

"2023 will see some more foundational work taking place," she adds, with the industry already picking off lower-hanging fruit, such as 3D mesh components for Microsoft Teams, AR/VR training and digital twin per se.

"In 2023, we could see more of a geo-digital twin – a fusion of geography and technology."

Certain technical requirements for latency and uploading will only arrive with 5G-Advanced from 3GPP Release 18 – although that standard is set to be frozen by the end of 2023, Kechiche adds.

Soubhagya Mohakud, vice president, Europe sales at Persistent Systems, confirms it's working on metaverse for educational demos, teaching simulations, and field ops support for remote servicing, maintenance and repairs. "This'll go a long way in improving 'first-time' fix rates and reducing costs."

Yet Jonny Stephens, consultant at Bearing Point, warns the lowest-hanging applications so far appear "squarely on the 'human' side" even though immersive screens and demos can certainly deliver business benefits.

"The metaverse can get dragged into discussions of extended VR. For modelling, quantum [computing] might be the tech to look at, rather than extended reality (XR)," he says. "For a lot of that, I don't really like the word 'metaverse'."

However described, advanced modelling and simulation that improves reporting on middleware and legacy applications running big complicated bits of machinery can save costs as well as maximise human abilities to interact with some systems, he agrees.

The economy has been in turbulence for many months, and a combination of global conditions and domestic policies will have extended these conditions well into 2023 and likely beyond.

Although it’s looking less likely the UK will suffer a technical recession this year, the economy is still set to contract. What this means for many businesses is rising costs and likely a hit to revenue. This will be difficult to manage for many of the largest organisations – but could be devastating for small and medium-sized businesses (SMBs).

Beyond the most obvious areas of cost savings – including reducing energy costs or cutting back on office running costs – are a number of areas in IT that could be identified as fertile ground for reducing expenditure. These might include reducing cloud costs or even cyber security costs, but there are other tactics small businesses might wish to employ to get costs under control and seek to limit damage in the coming months.

1. Transfer your data to NAS devices

Where is your company’s data stored? It’s all the rage to push data into the cloud and make it somebody else’s problem. However, this is rarely the real outcome. Although a well-run data centre is likely to be more robust than a tired Dell desktop computer hiding under a junior IT employee’s desk, it’s simply your data in someone else’s computer.

Of course, cloud services have their places, especially for bulk offline storage of data. But it might be more advantageous to run a pair of NAS boxes: one as primary storage, the second as secondary, placed as far apart as possible and preferably in a separate building. Use the built-in replication tools to create snapshots of your data, and send these over the network to the second unit. Finally, pay for cheap cloud storage and push your updated data to that encrypted cloud storage on a daily basis.

These boxes aren’t going to be too expensive, unless you buy high-end versions, but don’t fall into the hidden costs trap. Ensure you have enough drive slots and set up the disk arrays appropriately in a fault-tolerant arrangement. With thought and care, there’s no reason why you can’t look for at least six years of life out of each of these boxes.

2. Cut expensive software subscriptions

Subscriptions to platforms such as Microsoft 365 and Adobe Creative Cloud cost a lot of per user once you annualise the monthly costs. Do you really need all the capabilities of Excel? Or Photoshop? If so, who in your organisation has that need, and are cheaper third-party tools good enough for everyone else?

For example, LibreOffice has most of the functionality of a ten-year-old copy of Office, but at no cost. Affinity graphics tools, too, cost a few tens of pounds per seat, with no rolling monthly licensing overhead.

If you really do need to have Microsoft Office 365, for instance, are you on the right plan? It’s likely there are areas there that can be pared back, especially for less power-hungry users. Take a good look as big savings can be made here.

Finally, are software services slipping through on personal credit cards and then being charged as expenses? This is surprisingly common, even in large organisations where there should be better control. As always, follow the money to build a picture of what is being paid for, and who’s using it. Then you can decide if they need it, or whether this is a historical hangover.

3. Review all cloud subscriptions

This brings us to cloud subscription services as a whole. These are very easy to sign up for, and there can easily be ‘vampire’ subscriptions you’re still paying out for each month that no longer deliver value. Turn off auto-renew on every piece of software you can. Companies are good at sending out reminders that a subscription is coming to an end, but don’t get caught by the “we renewed your licence (a month early) just to make sure you kept receiving our wonderful service”.

Some tasks really do benefit a cloud service, of course. Certain back-office applications, for example, let several people have a login and can help when working in a shared data environment. Don't dismiss the cloud out of hand. Simply ensure it is doing what you need for the tasks required.

4. Audit company devices

Do you have an audited list of devices on your network? Are the computers lurking in the corner that hark from the Jurassic Era? Are they doing perfectly innocent tasks but in an inefficient way? For example, there might be an ancient Dell desktop hiding in some cupboard, with a screen but backed up by a small uninterrupted power supply (UPS). It might have a relatively minor function – like running a printing queue for a laser printer – but is this really necessary? The device could be chewing through electricity for little reason.

All infrastructure should be on DHCP-reserved addresses. It gives you the flexibility to manage the device but ensures that you actually know what the device is. Devices on the network that are on true floating IP addresses should be devices that come and go from the network, like user laptops.

5. Control printer costs

Large professional-grade printers last a long time. Monster devices like the HP 5550, which has five paper trays and prints double-sided A3 in colour, can be at least 15 years old and still going strong but might cost a fortune to fill with toner cartridges.

Have you considered a much cheaper office-grade inkjet that has either a rolling ink subscription or refillable ink tanks for all other work? Is it really necessary to print in colour, or will black and white actually do just fine? Managing print costs can save a fortune.

6. Control power costs

Old hardware might be tempting to keep running, especially in light of e-waste concerns and not adding to the problem. It’s entirely possible, though, that you could replace power-hungry older devices with something cheap that uses a fraction of the electrical power. What's wrong with a small Intel NUC Pro that consumes 5W when idle, for example? Or even something Arm-based? Run the return-of-investment sums and obey the end result.

Finally, are you turning off these devices at the end of the day, or just hoping they go into some sort of power-save mode? There’s much to be gained here by rigorous management of power-on time.

7. Rationalise servers

If you have a few old trusty servers, now’s the time to simplify them down into one modern unit running virtual machines (VMs). Ancient rack mount servers might look twinkly in a rack, but they chew through energy and often need air conditioning to keep cool. Can you push the boat out, and even run a server closet at a temperature that’s fine for the servers, but perhaps uncomfortable for users?

8. Turn off the heating

Speaking of heat, it’s common to not only run the heating beyond a working day but through the weekends too. Providing you ensure there is no likelihood of frost build-up, why not aggressively turn off the heating and HVAC at weekends? Just ensure people have the means to turn on the heating for their area if needed.

9. Use different currencies to pay for goods and services

If you’re paying for services, what currency are they based in? It’s common for US dollars to be the pricing behind many cloud services, and we’ve all experienced significant price increases in some platforms this year due to the change in exchange rates. Are there UK or EU-based service providers that can do the same job, but at a more friendly exchange rate?

Many businesses today are rethinking their network security solutions since the adoption of remote and hybrid work, and considering the multiple cyber security options now available. For the majority, the best solution would be to introduce new elements - like Zero Trust - that can be implemented alongside legacy infrastructure.

This study shares how converged network security - Security Services Edge (SSE) - could be the solution to achieve this, offering integrated cloud-based abilities without compromising existing environments.

Download now for the full results of this study, discover the main challenges in managing network security, including remote access, and realise the numerous drivers for adopting SSE.

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In today’s working environments, where many businesses have adopted a hybrid working policy, CISOs have the additional challenge of not only ensuring the security of their internal infrastructure, but also their remote employees. And with cyber threats becoming more sophisticated, it can be difficult to prioritise security networks.

This resource shares five network security practices that CISOs can adopt to mitigate these challenges. From ensuring visibility, to implementing a Zero Trust network, to establishing safety in the cloud, CISOs can ensure they’re covering all security needs.

Download now to learn how there are no shortcuts when it comes to security compliance, and discover a cloud-native network security solution that can keep all networks safe.

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Ransomware continues to be the biggest threat to an organisation's cyber security, with 1 in 4 IT professionals having experienced a ransomware attack at least once in their career.

This 2022 edition of Hornetsecurity’s Ransomware Attacks Survey assesses the sources of these cyber security events to establish whether the increase in cloud computing has affected their severity, and shares the latest trends to help your organisation to stay ahead of the curve.

Download now to discover the most common ransomware attacks, how Microsoft 365 can be impacted, and how you can stay vigilant to attacks as malicious actors turn their attention to IT infrastructure in the cloud.

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Travelex has embarked on widespread digital transformation efforts in recent years. Known as a traditional brick-and-mortar money exchange, it’s put effort into transferring services online where possible and retiring physical locations in favour of web services such as customer service chatbots.

The foreign exchange firm trades in over 50 countries, in more than 80 currencies. Its widespread physical presence in airports around the world has led to it becoming a household name for travel money. It also made headlines in 2020 after falling victim to a catastrophic cyber attack, later identified as ransomware.

In recent years, however, it’s embarked on a worldwide mission to move to the cloud, swapping the traditional exchange experience for smart cloud processes, and embracing all the flexibility that comes with it.

Why has Travelex migrated to the cloud?

“It’s about driving business agility,” Travelex’s global IT director Hans van der Waal tells IT Pro. The massive digital transformation project has been in play since 2018, with van der Waal at the helm throughout its lifespan.

“Can we create architecture where we’re faster in developing and connecting new solutions in there? Can we open up our technology and open up our architecture, so we can connect in third-party solutions, develop new features much faster, and also use our data in a much more agile way? These are the opportunities: speed to market, flexibility, and becoming more data driven.”

For van der Waal, efficiency gains and data-driven insights have been a core benefit of Travelex’s transformation strategy. It’s not just a case improving the online presence for convenience, but improving operations on an analytical level the average customer may not even consider.

“You see generally that data consumption is growing, and to a degree that’s also a benefit. So we definitely get data in itself from how we do with customers, how we transact with them and when, and how, and where. That helps us to better understand customer behaviour, and to balance predicting where we should be, at what point in time, to serve our customers in the best possible way.”

Van der Waal recognises this journey would have been nothing without a long-term plan in place, and future-proofing was a necessary part of this. “We developed something called the integration framework,” he says. “Integration is a key thing in agility and transformation, that you’re able to connect services, platforms, systems and third-party systems.”

How Travelex tapped into AWS

Together with AWS, Travelex developed a flexible, serverless platform based in AWS Lambda that van der Waal says can “connect anything with anything”. He gives the example of replacing a finance system with a SaaS-based third-party solution, stating the platform would allow for this to be connected within the Travelex estate using AWS’ Middleware.

Public cloud has clearly been a cornerstone of Travelex’s digital transformation strategy, with the scale of companies such as AWS helping bolster its cloud ambitions while not providing what van der Waal would call a completely “off the shelf” experience. Undergoing a cloud migration at this scale was never going to be easy, but doing so across the range of countries in which Travelex operates required careful regionalisation of cloud services.

In countries like China the company had to abide by strict government restrictions, such as the so-called ‘Great Firewall’, to shift services online to the extent that they did. “China was an interesting one because when we started we had our own China data centre, and we were running very much in-country with a China-specific solution,” van der Waal continues. “But we wanted to see whether we could also move the China operation to the cloud using AWS as our provider.”

As AWS doesn’t have a region in China, they leverage local providers such as Alibaba Cloud, which meant establishing a presence without the inbuilt solutions to which Travelex had become accustomed. Here, the firm had to carefully tailor its cloud presence, and went through four or five designs before it matched internal security standards as well as Chinese regulations. Van der Waal notes this approach has varied by territory, with no one-size fits all approach. In Qatar, for example, Travelex still runs in-country using a co-location provider.

Combining workforce and platform changes

In order to service its digital transformation ambitions, Travelex created a new development platform based on an approach of continuous integration (CI/CD).

“For our platform, we implemented things like Terraform, where we automate scripts. We also use terraform for our infrastructure as code step, for reusable scripts and to spin up environments. We also use it to apply security around our Amazon estate. We use Ansible, we use Dockers, Kubernetes – so Amazon EKS – and we’re also using the circle CI for our CI/CD platform.”

With the changes led by van der Waal since 2018, Travelex is now in a position where it can utilise its agile development and breadth of developer talent to expand online services as and when needed.

Creating this mature, cloud-based development platform was key to the company’s digital transformation journey, but so too has been meeting the workforce requirements given the project’s scale. It quickly became apparent that his team’s basis in Java and .NET was insufficient for the scale of the operation, and Travelex had to seek out employees skilled in the latest technologies, and programming languages like React Native and JavaScript.

To expand its talent pool, Travelex first invested heavily in India, but high competition drove the firm to search elsewhere. The firm eventually settled on the Philippines, with van der Waal relishing in the success the talent played in the firm's cloud journey. The new workforce, in particular, adjusted to the culture and language quickly, and were able to train existing staff where knowledge gaps manifested, he confirms, with upskilling and communication key to seeing projects through.

“Internally, it comes very much to taking everyone with us and driving almost from the CEO level, so that this is not something that you do just on the IT side. It needs to be embraced by everyone in the company and very much also seen as a big priority.”

How Travelex is pushing ahead with modernisation

While Travelex is moving online, the end-goal is not to remove its in-person presence entirely. Although the firm has adopted systems such as chatbots, this is in addition to maintaining call centre workers – not as a replacement for them – with many outlets still fully human-operated.

“We need to recognise our presence in our network is something we actually see as one of our key strengths,” van der Waal explains. “The fact we have a strong presence in airports, supermarkets, and other important locations where a lot of travellers are passing by is something that allows us to have interactive conversations with customers.

“It also represents our brands, in a way you can excel on a personal experience, plus allows us to do cross-selling where possible. So just saying, ‘well everything needs to be digital and online through chatbots’ probably wouldn't be part of our strategy.”

Going forward, he's targeting even more modernisation across Travelex’s internal environment. He acknowledges, underneath the surface, some cloud applications have been largely unchanged from when they were running on Travelex’s own data centre.

He'd expected it would be possible to hand the code over to a third party for modernisation, and to render them capable of better handling cloud data, but there aren’t many providers that can actually do this.

“That’s something that we discovered when doing this. It very much comes down to a more case-by-case approach where a lot of the modernisation actually goes into rebuilding applications. It’s a bit of an enlightenment that came to us from all this.”

This isn’t a problem unique to Travelex. Counterparts in other organisations including CIOs and IT directors have struggled with this, particularly in organisations with decades of legacy architecture on their backs.

“Building new stuff in the cloud is fantastic, if you apply architecture and design principles, use more service-oriented architecture and API connectivity, scalability and orchestration with Kubernetes. It’s getting your legacy systems to benefit from that cloud technology – that’s a very painful process.”

Many hybrid working environments have been adopted industry-wide since the global pandemic, with employees using collaboration tools when working from home. IT managers are therefore tasked with, not only the security of internal infrastructure, but also those collaboration solutions on the edge.

This study delves into how employees use collaboration channels, as well as how sensitive information and data is shared via these solutions, and discusses the risks and challenges when it comes to using them.

Download now to learn the risk factors when it comes to collaboration solutions, and why back ups are critical to success.

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Salesforce has announced it will extend the lifecycle of IT infrastructure and hardware as part of a cost-efficiency drive.

In the software firm’s Q4 earnings call this week, chief financial officer Amy Weaver revealed that a one-year extension to both IT infrastructure and employee hardware had been implemented at the beginning of February, and was expected to deliver financial benefits in the year ahead.

The move forms part of a broader mission at the SaaS firm to reduce expenditures and enhance productivity, Weaver said.

“One point in our guidance includes slightly under one-half point in benefit due to a depreciation change to the useful life of certain equipment by one year, effective February 1st,” she told shareholders.

“For our infrastructure-related equipment, this changed the useful life from approximately four to five years. And for IT employee equipment, this changed from approximately three to four years.”

Extending IT lifecycles

This move from Salesforce marks the latest in several lifecycle extensions implemented by major tech firms as businesses seek to reduce costs and weather economic disruption.

In 2021, Google announced plans to extend the lifecycle of servers in its cloud computing arm.

The move saw the tech giant stretch the operational lifespan of servers from three years to four to reduce costs and maximise the use of server infrastructure over a longer period.

AWS and Microsoft have also followed suit. Shortly after Google’s announcement, AWS revealed it planned to run cloud servers for five years, marking an increase on previous practices.

The cloud giant also implemented an extension to the lifecycle of networking equipment.

Meanwhile, Microsoft CFO Amy Hood confirmed in last year’s Q4 earnings call that the firm would extend cloud servers by two years.

Speaking to shareholders at the time, Hood said the move was due to advancements in software that improved efficiency and was expected to unlock billions of dollars in savings and improve infrastructure longevity.

“We are extending the depreciable useful life for server and network equipment assets in our cloud infrastructure from four to six years,” she said.

“Investments in our software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, have resulted in lives extending beyond historical accounting lives.”

Rising IT costs

Over the last 15 months, businesses worldwide have been forced to contend with rising IT expenditures, fuelled partly by inflation and increased energy costs.

Analysis from IDC last year found that while pandemic-related IT cost surges posed a serious threat to businesses, economic disruption in 2022 exacerbated the situation.

Statistics from the US Bureau of Labor’s Producer Price Index (PPI) in June last year showed a significant year-on-year increase in the cost of running computers and servers, recording a 21% surge in prices compared to the year previous.

Stewart Buchanan, VP research analyst for Gartner’s CIO team told IT Pro that the extension of IT lifecycles is a long-running trend, but one that has certainly been accelerated by macroeconomic factors over the last 18 months.

Rising energy costs and inflation have had a significant impact on businesses globally, and providers are increasingly looking for ways to avoid burdening clients with rising costs while simultaneously seeking to reduce their own expenditures.

“If you’re a provider and really struggling not to pass significant labour or energy cost increases onto your customers, then it makes sense and it’s a sensible thing to do,” he said.

Buchanan noted that, when considering current hardware capabilities compared to previous years, this also makes great business sense.

“There was a time when buying a new hardware model would give you a lot more performance or would give you better energy consumption rates. We’re not seeing that as much from new hardware. While there is great new hardware out there that is improving energy consumption, for example, it’s not as much as it was before,” he said.

“The advantages of buying new hardware aren’t quite as compelling. I think this is another influencing factor. There’s a lot of pressure on providers to try and absorb a lot of the inflationary cost.”

Extending lifecycles does offer tangible benefits to businesses, Buchanan noted. However, this is often dependent on the capabilities of the individual organisation and can vary based on circumstances.

For larger enterprises such as Salesforce, this represents a prudent option given current circumstances and a concerted organisational focus on improving profitability.

“That has a bit of an advantage moving forward because it obviously just spreads the cost over more years,” he said. “Your annual cost that you have on your books for amortisation and depreciation expenses are going to be lower. That’s really the key advantage.

“But when you’re moving all your existing assets to a longer life cycle you can restate those assets on your books and instead of having their value expiring over four years, you can adjust it to claim it over six years. And of course, you get a bit more of a kick to your bottom line,” Buchanan added.

Businesses with legacy tech, particularly in their data tiers, must modernise as a matter of urgency or risk being “completely upended”, according to an industry expert.

Organisations that are over a decade old are more likely to run on older technology stacks that may require modernising. Ravi Mayuram, CTO at Couchbase, spoke to IT Pro on the IT Pro Podcast to discuss the issues facing companies with extensive legacy tech.

He warned against taking the easy route through digital transformation. Organisations have a tendency to prioritise updating customer-facing systems such as their user interfaces (UI) and application logic tiers, but they should instead focus on the data tier as a matter of urgency.

“The place you had delayed the most to make changes is in your data tier, because that’s the toughest and that’s your foundation, right? That’s the one you didn’t want to move all this while because it delayed it as much as possible, because you could get away with it,” said Mayuram.

“Now you can't, you have to realise that, that the more you sort of stick with legacy systems, the more obsolescence and the cost of it. And it's not just the bottom line, it's a top line. Also, you're no longer able to attract more new customers, because you're not accessible to so many of them, or you're not easily available to them, those kinds of issues show up."

Firms with legacy systems deeply entrenched within their stack could find replacing them an extremely difficult task. This is especially the case with legacy systems that support vital services that customers expect to be able to access around the clock.

“Those systems were not built for this, they could take a downtime of a night. Nowadays it's five nines (99.999%) availability, you cannot have the systems go down for more than five seconds in a year.”

Mayuram used the analogy of a weight-bearing wall to describe systems that are difficult to take down in order to modernise and advised firms to update one microservice in their stack at a time in a gradual transformation.

He also pointed to the elasticity offered by cloud computing as a major advantage for tackling this problem, and argued that the use of a hybrid cloud approach and increased server redundancy during transformation can offer improved flexibility and avoid costly outages.

A recent example saw more than 11,000 flights delayed and more than 1,300 cancelled across the US when the Federal Aviation Administration (FAA) suffered a major system failure.

The FAA later stated that the systems error occurred as a result of contractors accidentally having “deleted files while working to correct synchronisation between the live primary database and a backup database”.

It still relies on a wide variety of legacy solutions, with Reuters having reported that despite digital transformation efforts some air traffic controllers will continue to track flights with paper strips until 2029.

“And that's where we saw, even in the recent airline situation, it was a data infrastructure tier issue which somehow bubbled up to be this bigger issue.

“So you just have to modernise that tier, and that's not for the faint of heart, so to say. And that's why it has come this far. Now, if you don't take that challenge and start the journey now, you will find yourself on the wrong side of the digital divide. You may not cross the chasm and things will pass by, or you will be completely upended.”

Legacy systems pervade tech departments around the world and can cause significant problems if not handled properly.

In November 2022, 50% of surveyed UK civil servants said that legacy technology in their departments was no longer fit for purpose and was holding back meaningful efforts at digital transformation.

A December 2022 report on legacy systems at the UK government's Department for Environment, Food, and Rural Affairs (Defra) revealed that almost a third have reached end-of-life (EOL) status.

This has left the UK's public sector vulnerable to cyber attacks, particularly as applications that have exceeded their developer support phase may contain zero-day vulnerabilities.

The National Audit Office (NAO) data also found that Defra has no plan for replacing its legacy systems, which account for 76% of the department’s total digital and technology spending.

The spotlight on CIOs has never been brighter. In today’s hybrid work, cloud-centric world, Chief Information Officers own some of an organisations' toughest challenges. They are tasked with high-stakes digital transformation priorities such as ensuring fast frictionless technology experiences, modernising security in the cloud, and simplifying complex legacy IT architectures.

Cloudflare helps CIOs accelerate their pursuit of digital transformation across all facets of a modern workforce.

Watch this recorded webinar for a recap of recent Cloudflare innovations that help CIOs start 2023 on the right track, including:

• Integrations and product enhancements that make it easier to adopt Zero Trust security
• Partnerships with the wider security ecosystem, including Microsoft, to support long-term IT transformation
• New ways to secure and speed up connectivity from any location to any cloud across our global network

Provided by

I don’t like cryptocurrencies, so it’s safe to say watching not just Bitcoin but a large bucket of other cryptocurrencies sustain a $9 billion crash in the late summer of 2022 ignited a frisson of schadenfreude. The implosion, part of the ongoing crypto winter, might have even forced formerly optimistic traders into wondering if this was the beginning of the end.

After a few minutes of prodding and poking at the less hysterical regions of the net, I had some actual answers. Perhaps the most useful is that the entire market – all cryptocurrencies added together – is broadly agreed to be around $1 trillion. That means the overall loss in that particular crash, which sounds impressive at $9 billion, is still less than 1% of its valuation. Most currencies go through shifts in valuation like this without all the accompanying brouhaha that seems to attend the world of crypto.

All the while, many people forget that all cryptocurrencies depend on a great deal of computing power, both to be mined and to be maintained from day to day. This is a colossal amount, in fact. We’ve all heard the anecdotes as Bitcoin has surpassed the electricity consumption of Holland or Argentina.

Now, the rules are changing as quickly as energy prices are rising. This is bound to have a continued impact on the rarefied world of the blockchain and crypto, which may be strange new entities to the world of finance, but which suck up the kilowatts just like any businesses old or new.

This brings me to a rule learnt as an old banker into the technological world, which is the value placed upon rarity. If you could just buy all the bitcoins you wanted, then the price would go up until sellers are motivated to release their holdings. So why does it seem that cryptocurrencies have to keep on being “minted”, at a time when their competition for our megawatts is, to say the least, unwelcome, verging on foolish? Wouldn’t a moratorium on cryptocurrency farming while we have an energy sector problem, make existing Bitcoin and other crypto holdings more valuable, not less?

In a final irony, the strongest proof of the laws of economics as applied to rarity comes from the gold trade. Worldwide prices of gold are set every day in London, for everybody. This includes the Russians, who have enough gold in the ground to make it cheaper than brass, should they choose to get digging. If they understand the nature of rarity, then how come our crypto pioneers don’t, or want to see that rule overthrown, deposed, ignored?

This was exactly my thinking when I then read that Ethereum has essentially done exactly that. And not only has it placed a hold on minting new currency, but also hugely reduced the ongoing energy demands by switching to a new proof-of-stake concept that avoids the energy bill previously associated with any proof-of-work transaction.

So, good for Ethereum. But I cannot see any rationale, as we venture yet further into this energy crisis, for allowing Bitcoin and other cryptocurrency farms to keep running.

This automatically-generated transcript is taken from the IT Pro Podcast episode ‘Uprooting legacy tech'. We apologise for any errors.

Rory Bathgate

Hi, I'm Rory Bathgate.

Jane McCallion

And I'm Jane McCallion.

Rory

And you're listening to the IT Pro Podcast, where today we're discussing legacy tech.

Jane

Most companies that have been in business for more than a few years will have old technology stacks. While most firms are following some kind of digital transformation strategy, shedding legacy tech is no easy job and can lead people to take the path of least resistance, using a mix of old and new tech across their IT estate.

Rory

This can lead to big issues down the line, however. A very public recent example is the outage that led to thousands of flights being cancelled and delayed across the United States, which the FAA has blamed on accidental file deletion while updating a database. The FAA is heavily-reliant on old systems, and has said it will take until 2029 to phase out old methods such as paper flight strips.

Jane

Today, we're speaking to Ravi Mayuram, SVP of engineering and CTO at cloud database platform Couchbase, to discuss the need for businesses to upgrade their infrastructure. Ravi, thanks so much for joining us.

Ravi Mayuram

Thank you for having me. It's a pleasure to be here.

Jane

So can we start off, could you define what we mean by legacy infrastructure? Is it something that's old, is it obsolete, is it difficult to manage? What is this thing?

Ravi

Yeah, I think you know, we can maybe define legacy to be something that has been in production, in use for at least 15-odd years and more. And many of the systems that we are generally talking here have been in use, in production for at least 40-odd years. And so that definitely is legacy. It's, you know, to use an analogy here, it's like using landlines when the modern technology is sort of mobile and cellular phones. It's almost like that, many of these technologies that we're talking about in the stack were designed and invented before the internet came into be. And so you can see how that impacts your thinking and the access to those systems. And that's what leads to sort of some of these issues that we're seeing now.

Jane

Yeah, so more old than necessarily obsolete? Would you say?

Ravi

Well, obsolescence in technology happens very quickly. So it is obsolete on a certain level, but they are still useful in many ways. So in that regard, they're not useless. Definitely, there's a lot of use in them, but they are not up to the modern challenges and demands. And in that process, you find that they're difficult to maintain, difficult to use, and they have, you know, the cost of obsolescence is also high. That's where these things come into play, where you're sort of sitting on systems which are very old, and very few people know what's happening inside. These are very complex systems and enterprise software. And like what you mentioned recently happened, these are all very sophisticated systems built over many years, and layers and layers, various years of technology, various generations of technology, if you will have sort of layered on each other and ossified.

Jane

Yeah.

Ravi

Now, these are difficult systems. And so, modernising them is one of the sort of initiatives that many of them take.

Rory

So on this issue of modernising layers, what are some of the immediate challenges that it comes to when you're handling legacy infrastructure?

Ravi

Yeah, I think the the biggest thing is that what has really happened in the last, you know, decade or so perhaps a little bit more than that, is that it's the movement of direct to consumer, if you will. Which means that you and I get to directly interact with many of these systems which were actually built for, we used to call them backends, which were built for specialised people to work and operate and interact with them. Classic example, not to beat this, but it is basically very easy for all of us to relate to is travel reservation. You know, there was a time only travel agents would interact with these systems. Now you and I have straight access to that thing, including the pricing, the inventory, the availability, the flight schedules, the routes, everything's available to you. It'll tell you, "the middle seat is you know, $50 or £50 cheaper than the aisle, right? So you have, that means the pricing engine, the inventory, the availability, everything is coming directly to your thumbs. Whereas earlier, you had to have specialised people. So it's disintermediation of the intermediary, that's the sort of the generic theme. Direct to the consumer is the movement. So all these systems were built for enterprises where specialised people could interact with them. But now, you know, the common, millions of folks are interacting with them directly. And that basically poses two issues. One is scale, instead of tens of thousands, or hundreds of thousands of people sort of accessing them now, immediately millions and even billions of people are accessing them with, you know hundreds of millions concurrently using these systems. So, straightaway those systems which were built for, not for this scale start to show. And then, you know, then the ease of use, usability, maintenance, all this comes as a consequence of this. And those systems were not built for this, they could take a downtime of a night. Nowadays it's five nines availability, you cannot have the systems go down for more than five seconds in a year or something. So yeah, those systems were not built for it. So now how do you modernise it? It's like a ‘fixing the plane while flying it’ situation. So these are complex ones. But that's what the challenge is, that's what people are undergoing. So that I hope that gives you a flavour of the kinds of problems that that is existing in the system and why it came to be

Jane

Sure. Is there an element of risk by which I mean, you've kind of touched on sort of business continuity risk there if there's any downtime. But is there an element of potential cybersecurity risks if you're running older systems, and they are more vulnerable to attacks? And if you don't have the skill set to understand them and patch them, then you're going to have further problems?

Ravi

True. It’s at two levels, it's an absolute binary answer here. There are two sides of this equation. First, is that yes, because of these systems being so old there are systems here, which were written in COBOL and other sort of programming languages where there are physically they don't, they cannot find the resources, talent to actually work on this system. So part of it is people are a little bit scared in touching these systems, because people don't know what's happening inside at a certain level. Right? So they have to be careful in how they have to modernise it. And so it's, people are a little bit gun shy, correctly so. I wouldn't want to do my banking or fly an airline which is taking this lightly. So they are careful, and that's required. So on the one hand, to your security question yes, there could be loopholes which nobody would even know how to identify and fix. That's possible. The flip side is also a security thing that people are acutely aware of, which is that when you now modernise the system there are a whole bunch of modern challenges, because now you're exposing that system to everybody. That brings a different level of security and threat. And so that has got to be secured. So both sides, you know, it's not a clear case of one side fixes the problem, but it is a case of you have to modernise from the standpoint of at least you know, where the vulnerabilities are. With the older ones you don't even know, because then that's when these kinds of surprises happen. When you didn't even know what is going on, somebody was trying to do something correct and yet, it causes because these are complex systems and a little, like they would say a little butterfly flapping its wing can lead to a huge storm on the other end. That's what happens in many of these situations, without knowing what the systemic impact is, if you make a minor change it shows up somewhere else as a huge issue. So that goes away when you go from a legacy to a modern, but it does bring some new challenges of exposing your system to millions of users, and the way you have to secure that. But the good news out there is it's a well known problem, there are many companies working on it. And there's a lot of talent which can go and address that and fix it, versus the other one where you were hard pressed to sort of go fix those. Even if you find that talent, the cost of maintaining older systems always gets more and more expensive. And you might not have the right kind of returns for it.

Jane

Yeah, absolutely.

Rory

I'm interested in this point you raised of skills, of people being actually able to interface with the systems. Is there a sense of urgency here, that we need to modernise these while these people are still on the payroll or maybe that we need to train people up to be able to handle some of these systems?

Ravi

Absolutely, there is that sense of urgency. And sort of, we have ourselves seen this, when we work with many in the airline industry in the sort of operations of airports and reservation systems, which are all huge systems. Not just here but in retail and many other sectors, in every sector, the same thing is happening. Just the very simple act of curbside pickup completely changes the backend systems in retail industry, because the entire system was set up for everything to be brought to the back side of the warehouse and then stocked in shelves. Now you're saying well, direct to the curb where somebody can pick it up. So the whole mechanics, the logistics of this completely changes like this, every industry has its own. You can see the whole streaming, how that is changing the entire television and set top box to going away to cloud, DVR is how the whole thing changes. That gaming changes, instead of it being like console based, nowadays it’s mixed where half the stuff is happening in the cloud where inter-player games could be played yet, for speed and stuff, you can use your local consoles. It's this kind of transition is going everywhere. And the scale is the defining factor in the middle of all of this. And so your modern systems have to basically address that scale, and performance at scale. These are the two main things. Yes I can scale, but it's going to be slower and slower and as more people walk into the system it doesn't work anymore. The first user, as a customer put it, the first user and the billion user both should have the same experience. Saying to the billionth “So take a number and stand in line while I service the first one” doesn't work. So that's a sort of the change that is sort of going through, and people are sort of modernising. And there is urgency, simply because of this just to give you statistics. You know, when you're trying to book anything, a hotel room or or flight, they used to say the ratio was 100:1. 100 looks before one book happens. Nowadays it’s 10,000:1. 10,000 looks are happening before one booking happens, because a lot more of us are exposed to these systems obviously. The same thing is happening in banking. Anytime you introduce your mobile banking, the amount of times people are checking their bank balances seems to go up 100 times. Otherwise you have to go to the bank and ask somebody to tell you what the balance is, now you fire up your thing, “Oh my God, what was the last time” so like that, and everybody does it two times, it's already, you know, 100 times more than what you would see in a day. So it's a scale, by which I mean it's two to three orders of magnitude and in some cases even more of accessing these systems. That's what it has basically come down to. And so there is a huge, there's already a bunch of stuff work already done in the last 10-15 years, but as you can imagine, the devices are exploding, the axis is exploding, everything's becoming untethered. And so correspondingly, there is a lot more traffic. And so there is urgency in many of these systems to be modernised, and some are undertaking it, some are a little bit slower. But the game’s on.

Jane

You kind of mentioned banking, aviation, and retail there. Are there any industries in particular, whether it's those or others, that are particularly prone to the problem of legacy infrastructure?

Ravi

You know by definition, legacy infrastructure means these businesses have to be in business and thriving in the last 40-50 years, or more. It might sound negative, but it is actually not because they made some of the smart decisions for the time when they made those decisions. And the times have changed. Classic examples are the financial industry. You can imagine insurance, banking, healthcare, these are all places where people put the best money on technologies of old, just mainframe systems. They were expensive, super expensive, but they knew they understood the value of data. But the same mainframes are now what's holding you back, because that means physically your request, let's say you're sitting in London, and you're making a request and to let's say, let's say if Couchbase, were to use a mainframe, it would mean basically mean that you would have to go physically hit that mainframe sitting in some data centre in Utah, or wherever else we keep it as a cheap. And that takes a lot of time, the back and forth of it. In these days, where you're just one click away from your competition, you will be gone. “This site is too slow, I don't want to be here”. So what is happening in the modernisation is basically distribution, it’s called geo distribution of data. That same data, which was sitting in one box is actually in the cloud and distributed whereas actually, the data is sitting very close to you in London someplace. So it does not have to make the pond hop to come and fetch the data. So this is how the modernisation actually has to happen, where the data comes to meet you at your point of engagement as opposed to your request having to travel halfway across the globe to come to wherever the data is housed. So that's the legacy story already as in, you know, your modern technology of old now is sort of becoming legacy. And you just have to modernise that to get to a point where it's relevant to the way people are accessing it now.

Rory

I mean, you've touched on a key solution just now. But what options do businesses have when it comes to handling legacy systems beyond just leaving them in situ?

Ravi

Yeah I think, like I said, modernising or going away from legacy systems is not an easy thing. So what you… many times whatever happens in technology, it sounds like you're disrupting something in the past, this past is obsolete, throw that away, come to something new. That doesn't work in these kinds of situations, because there is value that they can still provide, and they are complex. And these are multi-year projects sometimes to modernise them. So the way you have to go about this, and it's difficult to do in many cases, and only sometimes certain types of software could be used to do this thing is basically instead of going this route of “let me rewrite the whole thing in a new stack”. What you have to basically do is think like, they use an analogy, things like remodelling a house as opposed to rebuilding a house, where you basically have to think in terms of “I'm going to extend”, and then maybe redesign the entire old stuff, but put something new adjacent. And the way you typically, and the problem with many of this infrastructure is that they are the weight bearing sort of systems. If you touch them, it shakes the whole foundation so to say. So how do you make foundational fixes typically, in a remodel is you actually put a beam on top which takes all the weight. And then you can move walls and stuff like that. That's how we should think about this, what can you add into your mix of systems, which will take most of your sort of where the access is happening, and then that gives you… and here there are newer technologies that help you including sort of patterns that people use in using microservices, and those sort of technologies, because you want to take small chunks of it instead of rewriting the whole thing because that's a never-ending project. Say you just want to take one microservice away from your legacy monolithic system to modernise it, and use other systems which will give you this, I'm using this analogy of a weight bearing wall. Which you would know in your system, how you have to sort of take the weight off of the one that you want to modernise. And if you do that, that's how sort of we have seen many companies approach this, and we have sort of partnered with them. And this comes from experience, not not some theory.

Jane

So it's a case of looking, I guess, when you're thinking about you want to modernise your infrastructure, you're looking for reasonable use cases where you can do that and not necessarily looking to do the whole thing if it doesn't need to be. If there is this app that's running on this old server, and it's doing its thing, and it's not harming anybody we'll just leave it where it is.

Ravi

Yes I think you just need to, but that's the toughest thing. Because what would happen is that you say “this is the part I need to modernise”, but that is the part that is getting most accessed. So how do I do that without, but you're absolutely right. Which is basically you just have to study your system to say, “which are the parts I want to modernise in which order?” So I don't have to do this whole boil the ocean thing, because at the end of it, you're not going to find anything at the bottom of it useful. But if you basically do this in a sort of organised, thought through manner where you take appropriate levels of risk, you succeed. I have heard customers say that “look, my entire career has been trying to get off of mainframes, I’ve not been able to do it so far but now I'm able to do it, because there are sort of modern tools and technology available to do it”. Because it's, it's not easy. Number one, and number two, the problem basically is one of when you have to modernise you're, you're already behind the eight ball, so to say. That's the thing that basically slows people down from modernising, because they are there risk averse. So how to mitigate your risk is the first like you mentioned, that would be the best way to analyse the system and modernise the ones, that way you can sort of manage the risk. And when you take these small chunks away, the risk automatically becomes lesser and lesser as you proceed.

Jane

When we're talking about legacy apps, rather than legacy infrastructure, one of the things that's often put forward is containers. That you take your old apps, you shove them in a container, you put it in the cloud and that is the answer to your problem. Is that the answer to the problem? Or is it a bit more complex than that?

Ravi

It is more complex than that. And that is a mistake many people have made, and they don't realise that they made the mistake directly because it's not exactly one for one. But where it ends is that, oh now my cloud costs are through the roof, I’ve got to contain the cloud costs. This is where it ends without realising. Because what they're actually in one sense doing is what I call a cut and paste. They're cutting and pasting the enterprise architecture onto the cloud, that's what they basically did. They said “I'm going to wrap this up in a container and put it there”. But then what you're losing is, on the enterprise you had bought, whereas in the cloud you're renting. So obviously, this is going to cost you way more than what you did. Whatever worked for you in the enterprise will not work, just economics doesn't work there. That's what you need to understand, and this is where your earlier point comes into play. When you're modernising don't do a cut and paste, understand which part of your systems need to change. First move when you're doing that modernisation, consider cloud as the first place where you want to start there. Because it's now changed, you don't have to go about buying hardware, installing software, maintaining patching, upgrading, all that is taken care of by the service provider so already it’s relieving you of a lot of stuff. So use that to your advantage and sort of now write those pieces of software, which you want to modernise one microservice at a time in the cloud. And you know, bridge the gap, keep some in the on-prem some on on the cloud, until such point as you've decided to move everything onto the cloud. Or whichever hybrid is the architecture that works best for you, stay there. You don't have to necessarily move everything to the cloud, because one day you may not bring it back. Because regulations, there are so many things that are unknown out here. So people who are in that domain would know what makes sense to move and what doesn't, and that's they need to take the time to do.

Jane

Is it a question of maybe finding a partner, whether that's an MSP or a consultancy or something like that, to kind of guide you through this process?

Ravi

Yes, that would help. But you also need to have a lot of in house resources, who understand because that domain knowledge is your own, your own company’s. And that's what you're protecting in one sense, right? Your IP, so to say. And yes, people from the outside can help guide you, navigate because the landscape is confusing. But you also need to have your talent be trained for this new reality, because it's not…what got you here won't get you there. You have to learn your newest set of skills, and modernise. And your domain expertise is what you bring to the table, you can use external consultants and sort of ISVs and others who can help and help you build that stuff as well who have expertise in, in the modern sort of systems in the cloud and containers and orchestrators and all that stuff, and both are required. And then you have to build a talent pool in house as well. So because these are, if anything more and more your business is, critically it's not like business is running and IT is helping No, it has become one, your IT is your business at a certain level. You know, earlier we used to say you're a software company or a service company, all that is good but now you're a data company, every company has to become a data company. Because the next phase is more that every company will become an information company. In one sense, that's when sort of AI gets in the middle of all of this stuff and, you know, separates the noise from signal. So that's the evolution because that doesn't mean others go away. They are necessary, but not sufficient. You just need to have more and where is that going? You've got to be providing sort of, look at it as what data, what value is coming out of this because everything else is sort of already spoken for.

Rory

You've mentioned resources, the need to have resources in house. We're entering into a recession right now. You know there's layoffs happening, companies are kind of reassessing their budgets. How can they do this and at the same time be handling legacy architecture?

Ravi

Yeah, I think that's a very good question. It's about training your existing people, in my opinion mainly. Of course, you have to balance your resource allocation too from your business standpoint, there's a newer business reality for that, whatever adjustments you need to make. But why you are making that you have to also invest in your talent pool, your your employees, and find ways for them to be more knowledgeable. And it's not a training, which is basically, you know, “we just go for a training”, that's not the point. How do you apply that back to what you're doing, it's in that loop where managers and leaders in the company have to sort of sit and invest their time with the engineers and sort of get them to par with the technology stack that they are planning to adopt, in the modern architecture, and they be trained. And there's also other movements happening, the DevOps movement. Agility has been there, around for a while, but there are a lot of things changing even in how you can be agile. So training and all those, you know, it's not just a skill thing, it's a philosophy as well that is changing, which is where some investment is a good time to invest in one sense in those things, so that you can, when the economy comes roaring back, you're ahead of the curve.

Jane

And it related to a lot of what we've said, when it comes to upgrading these systems how can you do that without causing downtime, which will alienate your customers, and losing money? Nobody wants to be losing it, the last time we want to be losing it is now. What's the strategy for this?

Ravi

You know, each company will basically have to zoom in this specific sort of strategy, but when you are sort of going from your older stack to the newer one, one thing you basically may always have to keep in mind is that the older one is the known, the trusted one, and the newer one is a yet inexperienced system. So you may well have to consider building more redundancy, and more sort of resources into that. Sometimes you constrain the resources that you're going to put in the new, because you're sort of cost-conscious and stuff like that, correctly so. But you’ve gotta be prudent about where you're trying to be sort of cost-conscious in a newer system, give it a little bit more. Maybe just 10%, maybe 20%, that's what, it's not gonna be like double it, triple it. It's not like that, but you just have to have a little bit more resources. You know, just to use a classic example our resting heart rate is 70 beats per second, if if our heart was at best, if you said, “let's double it, 140 beats per second ought to be good enough for a heart, because most of the time, you're not even using half of it”. You know, if a dog chased you, and you ran up a flight of stairs, you will keel over because it'll go to 200, 300. So redundancy is important in certain systems, where you just sort of give it until you understand the system better, then you can tune it back. And so this is not going to be forever investment. And this is where cloud is very useful. Because it's about elasticity, you can provision more, and then you can put it back. It's not like in the good old days, where you have to say “oh, I need to go buy one more system, what is the CapEx of this thing? Can we really afford it?” and that goes away. So this is the advantage, take advantage of what cloud gives you elasticity. And you can actually build this redundancy into the system. So you know always have, these days it’s very easy as storage is also cheap, always have replicas of stuff. So in case one thing fails, another one is easily available. The good old ways of taking backup and then recovering is gone. Because by the time, let's say these days people are talking about hundreds of terabytes and petabytes, even if you take a backup just for storing that, and getting the system back into the health where it used to be, is a week long or a couple of weeks long in many cases. You can't afford that. So you just have to have a Hot Standby as people would call it, a replica of your running system. So that you can just switch over to that, this is how five nines availability is handled in many of the cases, using redundancy and replication as a strategy.

Jane

So if you have any sort of final advice to give somebody who is looking to modernise their infrastructure, modernise their business, what would it be? Where do you start?

Ravi

You know, coming from the buyers, where they come from, and what we have done so far, most of the sort of the problems that exist when you're trying to modernise is that you've modernised various elements of your stack already. Your UI is more modern than where it was before. Your application logic tier is sort of more modern than it was before. The place you had delayed the most to make changes in your data tier, because that's the toughest and that's the that's your foundation, right? That's the one you didn't want to move all this while because it delayed it as much as possible, because you could get away with it. Now you can't, you have to realise that, that the more you sort of stick with legacy systems, the more obsolescence and the cost of it. And it's not just the bottom line, it's a top line, also, you're not sort of now able to attract more newer customers, because you're not accessible to so many of them, or you're not easily available to them, those kinds of issues show up. So you have to look deeply into your data infrastructure, data tier, and see how we want to sort of modernise that and that's where these are all the weight-bearing walls situation, whenever you attach data infrastructure. And that's where we saw, even in the recent airline situation, it was a data infrastructure tier issue which somehow bubbled up to be this bigger issue. So you just have to modernise that tier, and that's not for the faint of heart, so to say. And that's why it has come this far. Now, if you don't take that challenge and start the journey now, you will find yourself on the wrong side of the digital divide. You may not cross the chasm and things will pass by, or you will be completely upended. All these things are happening, and many are aware of this, but yet there's a time for urgency to modernise that portion of your stack. And there are enough examples now of people having done it, so you can do this safely, and there are enough guardrails and resources available so people can undertake this one safely and succeed at this.

Rory

Well, Ravi, thank you so much for being on the show.

Ravi

Fantastic, thanks for having me. It was a pleasure to talk to both of you, you guys seem to know a lot of what's going on and I hope the listeners benefited from this lively chat.

Jane

Thank you.As always, you can find links to all of the topics we've spoken about today in the show notes, and even more on our website at itpro.co.uk.

Rory

You can also follow us on social media, as well as subscribe to our daily newsletter. Don't forget to subscribe to the IT Pro Podcast wherever you find podcasts. And if you're enjoying the show, why not tell a friend or colleague about us?

Jane

We'll be back next week with more from the world of IT, but until then, goodbye.

Old technology stacks can be found throughout the sector, especially in companies that have been around for more than a few years. While most firms have undergone digital transformation of some kind, shedding legacy tech is no easy job and can lead people to take the path of least resistance, using a mix of old and new tech across their IT estate.

This can lead to big issues down the line. A recent example is the outage that led to thousands of flights being cancelled and delayed across the United States, which the Federal Aviation Administration (FAA) blamed on accidental file deletion while updating a database. The authority is heavily-reliant on old systems, and has said it will take until 2029 to phase them out.

In this episode, Jane and Rory speak to Ravi Mayuram, SVP of engineering and CTO at cloud database platform Couchbase, to discuss the challenges presented by legacy infrastructure, and why enterprises need to take the opportunity to upgrade before problems become entrenched.

Highlights

“Those systems were not built for this, they could take a downtime of a night. Nowadays it's five nines (99.999%) availability, you cannot have the systems go down for more than five seconds in a year.”

“Say you just want to take one microservice away from your legacy monolithic system to modernise it, and use other systems which will give you this, I'm using this analogy of a weight bearing wall. Which you would know in your system, how you have to sort of take the weight off of the one that you want to modernise.”

“Now, if you don't take that challenge and start the journey now, you will find yourself on the wrong side of the digital divide. You may not cross the chasm and things will pass by, or you will be completely upended.”

Read the full transcript here.

Footnotes

• Civil servants blame legacy technology for sluggish government digital transformation progress
• BT Group extends Kyndryl deal to migrate legacy mainframe apps to the cloud
• Defra's legacy software problem 'threatens' UK gov cyber security until 2030
• Managing a blend of legacy and modern IT during digital transformation
• Government 'must focus on replacing legacy IT systems'

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We live in a wireless age, and this direction of travel is clear no matter where you look. This is typified by hardware manufacturers phasing out the trusted Ethernet port in modern razor-thin laptops and 2-in-1s. The latest Wi-Fi 6E connections, too, let us stream hundreds of megabytes a second through the air – and next year we expect to see the first Wi-Fi 7 chipsets, promising speeds of up to 40Gbits/sec.

With all this data swirling around us, traditional cabled connections may seem old-fashioned to the point of obsolescence. While Ethernet can’t match the go-anywhere convenience of wireless networking, it still has several advantages over Wi-Fi, and there are five reasons that, for many enterprise users, it will always be the superior option.

Ethernet vs Wi-Fi: Why Ethernet wins over Wi-Fi

1. Ethernet is simpler

You can’t beat Ethernet for simplicity. Just run a cable from one socket to another and boom, the connection is made. Assuming the devices at either end are correctly configured then the link speed, addressing and routing should all be sorted out automatically.

Configuring Wi-Fi, on the other hand, might be a far messier process and the complexity of this often depends on whether your physical space demands a mesh network or a Wi-Fi extender. Routing cables throughout the premises, on the other, to all terminals is a relatively more straightforward operation.

You don’t need to worry about keeping up with the latest high-end standards either: a £5 cable is all you need to get the fastest speeds. There’s no confusion about different plugs and sockets, as with USB. With the exception of high-end enterprise-grade hardware, all Ethernet links use standard RJ45 connectors, with handy plastic latches to ensure the cables can’t be accidentally yanked out.

2. Ethernet is more secure

Although the latest WPA3 wireless security protocol makes it all but impossible for an intruder to spy on your Wi-Fi connection, not all devices support it – and even if a spy can’t get into your wireless network, they can infer things from its name, signal strength, traffic patterns and so forth. That said, the forthcoming protocol might also be susceptible to future attacks, according to research published in 2020, who discovered a set of Dragonblood flaws in 2019.

With Ethernet, however, there’s no way for anyone to snoop on your data unless they can gain access to the physical cables and connectors. To succeed in an attack, a cyber criminal would need to plug a device into your network physically, while data transmitted through Wi-Fi networks are more susceptible to interception.

3. Ethernet speeds are quicker

Ethernet is almost always faster than wireless. The latest Wi-Fi routers provide high speeds over a short distance but carry your laptop into the next room and performance quickly drops off. A gigabit Ethernet connection can reliably keep up a data rate of around 100MB/sec over any length of cable, up to a huge 100 metres – and there are variants that can go far faster.

Ethernet ports on most devices use the IEEE 802.3ab standard, also known as GbE, which supports a speed of 1Gbit/sec. It doesn’t mean data transfers at that rate, though, with a gigabit Ethernet link actually conveying roughly 920Mbits/sec of usable data. That’s much better than wireless connections, though, where real-world performance rarely approaches 50% of the speed on the box. Many businesses working with big data sets and hosted applications are already using 10GbE, while data centres and supercomputing clusters have options ranging from 25GbE all the way up to 400Gbits/sec, too. Work is even underway on finalising the 800GbE and 1.6TbE standards.

Using Ethernet connections is particularly favourable if there are multiple devices located around an organisation that frequently back up to shared destinations or NAS devices. Sharing larger files between users, too, such as media or massive datasets, might be tricky over Wi-Fi if there’s a lot of activity simultaneously.

4. Ethernet connections are more reliable

Wi-Fi does allow for more convenience for those moving around a space, such as employees who frequently hot-desk or like to move between workspaces. This is particularly apparent in the age of hybrid work. Moving between sites, especially in an office set up with a mesh Wi-fi network might see the connection drop temporarily, if not properly configured. There might also be blind spots. Accessing networks at the edge, too, can be temperamental. It’s also not uncommon for a router to go down and require resetting for no initially obvious reason.

Ethernet connections, meanwhile, require people to stay in one location for continuous online access, but they provide a rock-solid, consistent connection, with only tiny variations in the data rate compared to wireless. Environmental interference is a non-issue, and you don’t normally need to worry about network congestion either. Wireless routers, on the other hand, have to divide up their bandwidth between any number of clients, every Ethernet connection represents a dedicated full-speed lane.

5. Ethernet carries lower latency

As well as higher headline speeds, Ethernet has much lower latency than wireless connections. Signals travel much faster through cables than through the air, where they’re prone to interference. On many networks, it’s common to see a higher ping time when pinging a router from a laptop connected over Wi-Fi; but for that to plummet when connecting through an Ethernet cable. Among the advantages, like smoother videoconferencing sessions, it can have a subtle effect on how snappy and responsive your system feels when you’re accessing local networked resources.

From The Highlands of Scotland to the villages of Cornwall, Britain is in the midst of a full-fibre frenzy, with dozens of smaller providers – so-called altnets – running fibre to the doors. It’s a massive land grab and, with companies keen to please investors, they’re offering stupidly fast broadband at stupidly cheap prices to attract customers.

But can it last? Will these cut-price fibre providers be able to compete with giants such as Openreach and Virgin Media over the long term? Or will the market go the same way as it did with ADSL, with smaller fish swallowed by the bigger sharks?

What's triggered the full-fibre explosion?

When it comes to delivering end-to-end fibre connections, Britain had – until relatively recently – been lumbering along at a pedestrian rate. At the start of the 2010s, BT set an ambitious target to reach 25% of British households with full fibre, but it quickly faltered. Openreach largely concentrated on delivering the much slower and cheaper fibre-to-the-cabinet (FTTC) and full fibre remained a rarity.

In the past few years, however, something changed. Although Boris Johnson’s bluster about delivering ultrafast broadband to everyone was typically exaggerated, there has been a serious surge in Britain’s full-fibre rollout and experts do give credit to the government and regulator Ofcom for giving it a shove.

“The number of alternative full-fibre networks in the market has rocketed to over a hundred in just the past three to four years, and this stems from the combined impact of several changes,” says Mark Jackson, editor-in-chief of ISPreview.

“Some examples of positive changes include demand side-interventions, such as the government’s rural gigabit voucher scheme, making the economic model for rural builds more viable, and support for providing fibre to public-sector sites, which can later be harnessed by commercial networks for further expansion. Ofcom has also made it easier and cheaper for altnets to viably run their own fibre over existing telecoms poles and underground cable ducts on Openreach’s infrastructure.”

Lit Fibre is an altnets that’s benefited from access to Openreach’s ducts and poles. The company’s CEO, Tom Williams, says the long battle to get physical infrastructure access (PIA) to Openreach’s infrastructure was crucial. “I was involved in PIA right from the very beginning and… it took a good three to five years to get that product to a place where it was viable enough for people to overcome the challenges that it faced,” he says. “I think some of the bigger companies are still struggling with some of those challenges, which is a perfect set of circumstances for more entrepreneurial companies to spring up and take advantage.”

Breakthroughs in PIA have allowed alternative providers to enter the market

The other big factor is money – and plenty of it. With the ongoing economic uncertainty, there’s an appetite to invest in solid infrastructure projects, especially infrastructure that’s going to last a long time. The fibre being put into the ground now will last for at least a generation to come, because as Stewart Crabb, director of B2B at GoFibre says, “nothing travels faster than light”.

GoFibre, which is installing fibre in some of Scotland’s more rural areas, is installing XGS-PON and 25G PON technology from Nokia in its network to future-proof for the speeds that might be needed in the 2050s or 60s. “We’re not building it for today, we’re looking far into the future of what people will need, because theoretically that can deliver 10Gbits/sec to a home,” says Crabb. “Ten gig will never be used in a home today, but we don’t know what’s going to come 20, 30 or 40 years down the line.”

Why altnets have an advantage

The emergence of 100-plus fibre providers is inevitably going to splinter the broadband market, meaning each of those providers will be counting customer numbers in the tens or hundreds of thousands, rather than the millions or tens of millions of people on Virgin Media or Openreach lines. So how do smaller operators hope to compete with the industry giants?

One man who should know is Steve Robertson. He used to be the CEO of Openreach, but has recently joined Lit Fibre as a non-executive director. He believes the biggest advantage the altnets have is they are “starting a business with a clean sheet of paper”.

“The infrastructure space offers you the opportunity to do things that you just can’t do if you’ve got a massive legacy, as I know only too well,” he says. “Don’t get me wrong – there are great things about having a legacy… it’s not a dirty word. But having a clean sheet of paper does give you certain opportunities.

“If you are a smart, well-funded, intelligent, alternative network provider, you’ve got the opportunity to build and operate your network in a way that is quite different from a big legacy operator,” Robertson adds. “And in doing that, you can give customers a different sort of experience, you can be more personalised, you can be more agile. There’s a big market and there’s places for lots of different flavours.”

Being a new provider also allows companies such as Lit Fibre to shake off some of the problems that have long afflicted the broadband business. “If you look at things like TrustPilot, people are very suspicious, disillusioned and mistrustful of the industry,” says Williams. “Right back to the mid-2000s, people have been saying ‘I don’t get what I pay for’ because it’s always been ‘up to’. So there’s a big job for companies like us to educate the consumer as to how different it is. It’s about building that credibility and demonstrating the fact that full fibre is completely different.”

The other advantage is cost. By piggybacking on Openreach infrastructure and not bearing the cost of digging up roads, the altnets can be very competitive on price. With so many altnets in the landgrab phase, they’re driving down prices to attract customers. “You have got some [altnets] that are coming in and trying to bump up their customer base as quickly as possible, coming in with competitive pricing,” says GoFibre’s Stewart Crabb. “For the end user, that’s great. You are getting more than what you’re getting today for, if not a better price, the same price [as your current broadband].”

The influx of low-cost full-fibre providers is also putting pressure on the big players to not only accelerate the rollout of their own full-fibre networks, but to keep prices down. Openreach doesn’t sell directly to consumers; it wholesales its network to ISPs such as Sky, TalkTalk and Zen Internet. But the company’s managing director for fibre and network delivery, Matt Hemmings, admits the altnets are keeping Openreach on its toes. “I think that [competition] is a very positive thing for UK PLC and its customers, and we are making sure that we remain very competitive on [wholesale] price to ensure that we continue to grow and scale our business, and generate the returns that we that we want to make on our business case for our investment in FTTP,” he says. “The UK is building more fibre homes today than it ever has before and the pace of build accelerates every single quarter.”

Those cheap fibre prices might not be an introductory flash in the pan, either. “If we look across other markets where FTTP has matured, then if anything gigabit speed packages actually become even cheaper. Put another way, over the longer term, there’s scope for prices to fall further and for speeds to increase. Some ISPs are already charging around £25 to £35 per month for their top 1Gbit/sec package, and that may become much more common over the next five years.”

How long can Britain’s broadband boom last?

The full fibre expansion comes alongside a shift in the way these services are sold. For years, broadband has been bundled with other products, such as television, landline and mobile phone packages. But the bundles are beginning to unravel. “We are seeing the market shifting,” says Hemmings. “I couldn’t tell you my landline number, I don’t remember the last time I used my landline. I think and we will continue to see that market shift but we have an obligation at Openreach to ensure that we consider all customers and all their needs across the entire spectrum.”

Openreach’s ongoing drive to switch off the old PSTN network will drive a further stake through the heart of the landline business, with most consumers either sticking to their mobiles or relying on VoIP services for phone calls.

While customers might reap the benefits of cheap gigabit fibre connections for a few years to come, there are doubts over how long the British broadband boom can last. Indeed, in the early days of the cable rollout, there were numerous regional providers that eventually consolidated into one or two big players. When dial-up and ADSL first took off, there were hundreds of smaller ISPs, which were one-by-one subsumed by the bigger companies.

Almost everyone in the industry – even the altnets themselves – concede that there will be similar consolidation in years to come. “It will happen,” says GoFibre’s Stewart Crabb, “but the networks need to be built before you can go buy it. The important thing is getting those networks in the ground and getting customers on it, and getting everybody using it, then you’ll start to see acquisitions.”

North Berwick, a seaside town in Scotland, is one of the locations GoFibre has reached with its fibre rollout

We’re already starting to see overbuilding – areas with two, three or more full-fibre providers – and that creates problems for the business case. “We have a business case to build 25 million homes, which is about 80% of the UK, and we probably wouldn’t stop there,” says Hemmings. If you add up all of the announced plans to build from the various providers, it comes to 75 million homes. This is a problem when there are only 27 million homes in the UK. “I don’t think that, personally, is a sustainable market position,” he says. “I think you will naturally see consolidation over time.”

The good news is that strong competition is forcing altnets to build in places with less competition, places that might not otherwise have got fibre. GoFibre is targeting more rural areas in Scotland and the North of England, for example; Lit Fibre has rolled out in less affluent locations such as Clacton in Essex, because customers can afford its competitive prices and it delivers benefits to the entire community.

It’s the more competitive, inner-city areas where the crunch is likely to be felt. “The market reality is that having a mass of smaller players, many of which will be competing over some of the same areas, often overbuilding several other opponents, is not sustainable,” says ISPreview’s Mark Jackson. Even in dense urban areas, with plenty of customers in small geographic areas, you’d still run into problems with more than five networks competing.

“Wide-scale consolidation in a market that has become as aggressive competitive as this one is thus inevitable,” he continues. “I suspect, given enough time, that we’ll end up back in a position with a handful of large infrastructure players, followed by a smattering of medium-sized and smaller players in particular or niche areas. But not the 100-plus altnets you see today.”

Network-attached storage (NAS) devices are wonderful things. Back in the day, I used to run Windows Server on my network, and it did a good job. Then things got more complicated with Active Directory, which was fine for a large corporate but added a lot of complexity to the SMB marketplace. Microsoft, in its ongoing attempt to force every square peg into a round hole, made a Home Server. But complexity was always going to be an issue.

NAS devices have been around for a while, of course, and many vendors had a go. Starting with straight storage, they grew into application platform servers with a rich array of additional tools and services. It started with the obvious ones – file server, a spot of DNS and maybe some DHCP services – but now its blossomed into a rich ecosystem.

Because of that, it makes sense to choose a vendor platform and stick with it. There are tools, such as NAS-to-NAS replication and backup services, that really need two devices of the same platform, even if they’re not the same model. A decade ago, I looked at NAS devices from Synology, Asustor and Qnap, and chose Synology.

I take a six-year view on these devices. Although the latest research suggests there isn’t much of an issue at the six-year point, the whole operational device starts to get a bit leggy at that point. It’s best to replace your NAS devices before you have a problem, rather than after one has occurred. Of course, drives will be in appropriate RAID arrays, so a single or multiple drive failure won’t be catastrophic. All data should be appropriately replicated and backed up, too, both locally across the network and to cloud storage. I use both Synology’s C2 cloud storage and also Backblaze B2. These are mostly fit and forget, although it’s good housekeeping to keep an eye on them.

For camera security, I use the excellent Synology Surveillance Station platform. Security cameras are connected via wired Ethernet and use Power over Ethernet. Although cameras that connect via Wi-Fi are fun, they’re more like a toy when it comes to surveillance. For a number of years, I have used the Synology NVR1218 NAS box in the lab. It’s a small device that supports up to 12 IP cameras. But, most importantly, it has an HDMI port on the rear, so you can connect up a TV or monitor directly to the NAS and have a multi-window view of the cameras. There are devices such as the VS360HD that give you the same HDMI interface, but are connected to the Ethernet, and so can be used with any suitably powerful Synology NAS running Surveillance Station. But I liked the all-in-one approach.

Stick in a couple of 6TB hard disks in mirror and you have a solution that will store real-time feeds from the cameras for a month. If I wanted more, I could have added a DX517 expansion unit to add five more drives, but the built-in storage was enough for my needs.

It has done sterling service, but it wasn’t the most performant of devices. Logging in from the DS-Cam app could take several tens of seconds for the camera views to appear. It was clear the dual-core 1GHz Intel CPU was constantly under duress, with only 1GB of RAM not really helping. That’s before you even get into event triggering and other advanced capabilities. The final problem was it was stuck on Synology DSM6, and couldn’t move forward to the current DSM7 platform. It was clear the NVR1218 was reaching end of life.

In late 2021, Synology announced its replacement: the DVA1622. It still has the HDMI output and two internal drive slots, but support for the external drive bay has gone. No real loss from my point of view. Crucially, though, the CPU, with a dual-core (and four-thread) Celeron chip that could boost up to 2.7GHz, not to mention the leap from 1GB RAM to 6GB.

After a delay, perhaps due to the ongoing chip shortages, it arrived and was soon unpacked. When you migrate from one Synology to another, it’s always a good idea to have a full backup. Migrating is usually painless. You just pull the drives from the older box and put them into the newer box. Just to be sure, I used the tools to create a configuration file of the camera IP definitions (address, username, password). I moved the drives, and powered up.

Because DSM6 was running on the drives, and the new device runs on DSM7, there was a great deal a upgrading in the background – which took some time. One glitch was the additional camera licences hadn’t transferred across, nor had the camera definitions, but it wasn’t difficult to load those up. Once this was done, I connected up the external HDMI monitor and that worked fine too.

Performance is night and day better than the NCR1218. Now the CPU is mostly idling, and the built-in 6GB of RAM isn’t being slammed into the ground. This allowed me to look at some of the more intriguing facilities offered by this higher-power NAS, much of which it has inherited from its bigger brother the DVA3221 unit.

Beyond better performance, the biggest change sits in the area of video analytics. It can analyse video feeds, and recognise people as well as faces. It can even detect whether someone is wearing a face mask, in case your business has policies around mask-wearing in place. Cars and vehicles can be counted and recognised, and it can do number plate recognition too. This unit can run two of these tasks at once, or one task of face recognition (which obviously takes more CPU power). If you go for the bigger brother DVA3221 unit, then these task counts rise to 12 tasks and six for face recognition.

I was curious to try these features, so turned them on for a few cameras outside. The recognition of vehicle movements was excellent, with each entry and exit triggering an event with an associated clip. Number plate recognition, on the other hand, wasn’t nearly so successful. It would help if Synology had tuned the software to recognise UK number plate designs, as it has for France, Germany, Poland, Switzerland, Taiwan and the US.

I started digging into the results, and it became clear the frame rate and resolution of the cameras weren’t good enough to gather good enough frames as a car drove through the field of view. If a car drove through slowly, then it wasn’t a problem. To be fair, this isn’t the fault of Synology’s deep video analytics service – a low resolution and low frame rate from a camera mounted up high up, looking down at an oblique angle, is hardly the most helpful of feeds. Clearly, I need to move the camera down, ensure it is grabbing more frames in the time window available as a vehicle drives past, and probably upgrade it.

So far, I’m impressed. I was probably expecting too much to think it would deliver all of its advanced capabilities with my rather ageing Axis cameras, which have been in place for a decade now. However, these cameras still do sterling work and there is no need to replace them. The upgrade to the newer model is well worthwhile just for the speed and responsiveness, the ability to run the latest Synology OS, and to have these additional facilities available if required. At a price of around £650 including VAT, it is a cracking piece of kit. I will start to age out the old drives by replacing them one at a time, allowing it to do the mirror rebuild as it goes, but I’m in no rush.

For many firms, disaster recovery and business continuity mainly involve how to continue functioning after, say, a data centre has flooded, or a JCB digger has accidentally cut all the phone and data cables to an office. It could even involve something as disastrous as a terrorist incident in a city – meaning workers have to work elsewhere for a while until normality returns. But how does a company, with people and offices scattered throughout a country, carry on when it's been invaded by a belligerent neighbour?

This is exactly the challenge IT services and consultancy firm Intellias faced last year. Based in Lviv, western Ukraine, the company has 3,000 employees scattered in its home country. It was founded in 2002 by Michael Puzrakov, the company’s managing director, and Vitaliy Sedler, its CEO, and has evolved into a global firm that provides software engineering services in industries such as transportation, financial services, telecommunications, retail, and energy.

On 24 February last year, Putin’s tanks rolled into Ukraine after Russia had built up a large military presence on the border. When the war began, like many other Ukrainian companies, Intellias couldn’t just stop everything and wait for the war to finish; it had to keep going, and continue serving its customers – many of which formed vital layers of Ukraine’s critical national infrastructure (CNI).

When the first rockets struck

Sedler admits that, prior to 2014, business continuity and disaster recovery plans with regards to any war were far more theoretical for the company. There were plans in place, he tells IT Pro, but no expectation the worst would actually happen. Then, Russia annexed Crimea and the Donbas, and what was once a formality began to turn into something frighteningly realistic.

“For that reason, we came up with detailed plans of what we would do in different scenarios,” says Sedler. “At that point in time we didn’t have to execute any plans. It was closer to a ‘business as usual’ situation. But, in 2020, there was a moment of truth in the nation. Russian soldiers gathered at the borders. The plans we had, we needed to take them and make them much more detailed – make it really well planned.”

Sedler says they worked on a couple of scenarios from minor military activity in the east of Ukraine all the way to an invasion. Although they were “prepared for all scenarios”, neither Sedler nor Puzrakov thought a full-scale war as we have witnessed it was on the cards.

When the first rockets struck at roughly 5am on 24 February, Sedler took a call from one of his directors in charge of the response team. It was clear the war had started. At 5:30am, Sedler said “we need to do something”. It took three to four hours to begin executing their plans. By 9am, the right people and processes were in place.

Vitaly Sedler (pictured) founded the company with Michael Puzrakov in 2002

Within a couple of weeks, they moved roughly 1,300 people from southern and eastern Ukraine, where the majority of the early violence was felt, to western Ukraine. The company, at this point, had two priorities: the first was the safety of staff and their family members, and the second was continuous delivery. It was important to deliver to clients because the firm understood if they stopped everything, the trust they’d built over years would be severely strained. Impressively, the plan to continue business processes and restore operations took two weeks to get back to almost 100%.

Migrating to the cloud, and far away from Ukraine

Intellias had since 2014 to draw up detailed plans of what to do should Russia invade the country, as suggested previously. One of the key actions the company took to mitigate the effects of any future war, Sedler reveals, was to move as much of its IT infrastructure into the cloud, and as much of it outside Ukraine, as possible.

The second part of this strategy revolved around the location of hardware. Many of Intellias' clients are in the automotive industry, meaning the company handled car parts and units for which they developed software. These had to be relocated away from potential war zones.

The plans also involved setting up emergency teams in different locations with different responsibilities, such as teams that would put people onto buses to get away from the conflict. Other employees would work in communications teams to maintain contact with other employees and clients during any war. Sedler says it was crucial to develop the management team so they could organise the plan very quickly in the event of any conflict.

It was also important to open several channels of communication, and not rely on just one. In the first few days of the war, for instance, colleagues used both email and Microsoft Teams to post updates and check for news from other colleagues.

Over recent weeks, communication has become critical again due to Russian attacks on energy infrastructure. “Just to give you an example, every morning at 8am I receive an SMS about what is happening in our offices, whether things are up and running,” says Sedler, “so all people understand if anything happens, they can come to the office and have guaranteed power supply and internet connection.”

Putting people first in the face of conflict

Even in the worst possible circumstances, there are lessons to be learnt from the experience of trying to keep a company online during a war.

Sedler says Intellias managed to continue because it was more of a people-centric company than one solely focused on profit. Rather than solely caring about growth metrics, the people-first mindset framed its disaster recovery plans.

Intellias prides itself on being a people-centric company, and factored employee wellbeing into any disaster recovery plans as a priority

In practice, this meant the company helped people to get away from the most dangerous areas highly efficiently. Intellias even helped moved employees’ cats, dogs and other pets. In turn, it meant there was, and continues to be, extremely high employee commitment.

For Ukrainian businesses such as his to carry on, Sedler continues, the wider commitment across the population to support Ukraine and its business ecosystem must not falter. “It’s important to work with Ukrainian businesses so the money can come in to pay taxes and pay salaries. This is very helpful.”

With English public sector IT spending continuing to rise, concerns have been raised about the potential of government bodies relying on a select number of vendors.

Recent research from Tussell shows that the share of public sector spending on IT reached £173 billion last year – a 10% rise compared to 2021's figures.

This increase, the report found, means that public sector IT spending has more than doubled in the last five years.

Much of this growth can be attributed to increased spending on IT infrastructure and capabilities during the pandemic. Similarly, IT expenditures increased despite a decline of 4% in overall government spending.

“2022 was a politically and economically turbulent year, in the UK and beyond,” Tussell said in its report. “Despite - or because of - these pressures, public procurement was resilient.”

“In England, the government continued purchasing at record levels, and market opportunities for suppliers remained plentiful.”

Large Vendor reliance

However, while IT spending continues to surge, previous research from Tussell shows that public sector bodies are relying heavily on a comparatively small selection of major IT providers.

The 2022 ‘Tech Titans’ report found that public sector organisations increased IT spending from £11.5 billion to £12.6 billion between 2020 and 2021 – and 89% of funding was split among the biggest 150 IT providers.

The remaining market of around £1.5 billion was split among 5,298 other IT suppliers, Tussell said.

Atos, Capita, Computacenter, Capgemini, and BT were all highlighted as the top core vendors preferred by public sector organisations.

As this trend is expected to continue, Tussell suggested at the time that “£9 in every £10 spent on IT in the public sector will go to one of these 150 companies”.

“Tech Titans dominate the market,” Tussell said. “But they are competing strongly with one another; since 2018, only one company - Capita - has maintained the same position in our ranking.”

Martin Wilson, CEO at OneID, said that public sector bodies should acknowledge the value and agility that smaller SMEs and IT providers can offer.

“The government needs to get more creative than just outsourcing projects to large consulting firms and paying extortionate fees in the process,” he said.

Alex Fishlock, CEO at Catapult.cx said that public sector IT tenders can prove highly inhibitive to smaller suppliers and can, in some instances, fail to deliver true value for organisations.

“Public sector bodies are issuing tenders that are small in value, believing that small software engineering projects delivered for small amounts of money end up with a lower overall cost of an IT department,” he said.

“Small tenders still cost money for the vendors to bid for and win; this cost inhibits smaller vendors from bidding, since the amount of effort to win the bid is disproportionately high against its small value.

“This means that smaller vendors are typically unwilling to take on loss-leading tenders to gain a new customer.”

In addition, current tender frameworks which often benefit larger vendors can result in poorer outcomes for digital transformation projects.

“Multiple projects delivered by multiple vendors builds system and features silos, with little opportunity for reuse and cross-system collaboration. The cost of supporting disparate systems from multiple vendors becomes inefficient as the number of systems scales,” he said.

“Public sector bodies are doing less and less direct award of contracts, so even where a known vendor is preferred, the tender process is usually chosen to ‘box tick’. This risks existing vendors being unwilling to tender again; since the process of tendering is so expensive," Fishlock added.

"The result is a constant vendor churn through repeated tenders. Since a tender favours larger vendors, over time all the small vendors lose business to the larger vendors.”

Smaller vendors are making in-roads

Although larger vendors do account for a significant portion of public sector IT contract awards, Tussell revealed that smaller IT providers and newcomers are making inroads, especially in healthcare.

Among these was data analytics firm Palantir. The US-based firm has secured a number of sizeable contracts with government agencies and public health bodies over the last two years.

Palantir’s Foundry platform, for example, has been used by the NHS to make better use of organisational data. Meanwhile, the company’s software has also been introduced at NHS trusts across England to reduce patient backlogs.

Tussell added that, increasingly, larger providers are also seeking to collaborate with smaller organisations to maximise impact and improve the value of public sector IT contract bids.

“14 out of the 150 Tech Titans are SMEs (9% of the total), but many of the big companies want to partner with SMEs either to leverage best-of-breed solutions or to enhance the social value of their bids,” the firm said in its report.

Almost half of developers have witnessed an increase in year-on-year spending on Kubernetes clusters, according to new research.

A survey of 1,000 cloud developers by Civo on the use of Kubernetes found that 10% of developers have experienced a 50% rise in annual spending, while the majority saw an increase of up to 25% in spending.

This increase is thought to reflect the crucial role that Kubernetes and broader cloud technologies now play for businesses as firms look to scale operations, streamline processes, and optimise key business functions.

More than half (57%) of survey respondents told the cloud-native service provider they had seen an increase in the number of Kubernetes clusters running in their organisation over the last year.

Shifting market forces

Over the last two years, Kubernetes spending has increased consistently for businesses globally. Research from the Cloud Native Computing Foundation (CNCF) in 2021 showed that Kubernetes-related costs surged for 68% of businesses and this trend has continued into 2023.

According to Civo, rapid changes to the cloud market have played a role in this surge and are exacting a toll on developers.

Research from the firm found that the number of devs who rely on AWS, Azure, or Google Cloud as their main provider has increased markedly over the last two years.

In 2021, the number of developers flocking to the ‘Big Three’ providers increased by 68% while across 2022 this increased to around 72%.

This means that rising prices imposed by Amazon, Microsoft and Google are having a “significant impact” on users' bottom lines.

Civo chief executive Mark Boost warned that deteriorating economic conditions in 2023 could exacerbate the problem for developers as tech costs continue to rise for cloud users.

“Hyperscalers have been employing opaque billing practices and offering an increasingly complex range of services in recent years, all whilst they continue to hit record profits,” he said.

“As the economic situation worsens, customers will increasingly look for cloud services that add value at a fair price. There needs to be concerted action from the cloud industry to rethink its offering to users.”

To support users, Boost said that cloud providers must place a strong focus on “cutting through the complexity” of services to deliver offerings that provide a “fast service for a fair and transparent price”.

“For users, the emphasis needs to be on carefully managing their cloud spend, taking steps like optimising workloads, monitoring usage, and carefully tracking billing each month,” Boost added.

“Only then will cost start to diminish as an obstacle to growth in the cloud, helping technologies like Kubernetes to flourish as developers can spend more time on innovating, and less time worrying about the bottom line.”

Before the dolphins left Earth ahead of its destruction by the Vogons in sci-fi classic the Hitchhiker's Guide to the Galaxy, they sent a final message to humanity: “So long, and thanks for all the fish”. It was all over, and the dolphins were signing off. Many IT companies are arguably in a similar position.

The comparison is not absurd, with the cost of living crisis truly taking hold and shockwaves set to roll through economies worldwide over the next year or two. Geopolitical issues and post-pandemic trade constraints leading to supply-and-demand mismatches mean individual UK businesses, including many IT providers, are set to take a huge hit, to the extent their world could be over soon. This is the reality of what it means to be in recession.

Indeed, 42% of UK manufacturers have already seen energy bills double in 12 months, according to industry body MakeUK, and if government support ends in April, energy costs could double again for some. This is despite best efforts to slash energy bills.

Analysis from the British Chambers of Commerce (BCC) forecasts a deep, five-quarter recession lasting until the end of 2023. Business investment, exports and household consumption will all remain subdued, and inflation will still be pegged at 5%, down from 11% at the time of writing, but far off the Bank of England's 2% target. And then there's Brexit, which is still shackling UK trade.

The typically bullish Confederation of British Industry (CBI) warns, overall, of a potential decade of lost growth. At the least, more belt-tightening can be expected, with demands falling out of scope as a 'great reset' of tech adoption roadmaps follows.

In the Hitchhiker's Guide, the dolphins tried to communicate the impending threat to the people of Earth, only to have their attempts misinterpreted. In the end, only two humans managed to escape, more or less by accident. But tech companies shouldn't leave adaptation to chance.

Cost-cutting and collaborating to fight recession in 2023

What can be done when the digital transformation that’s become so essential for many businesses is held back by a shortage of of knowledge, skills, budgets and hardware? Mapping capability onto areas of opportunity will mean investing to drive savings and efficiencies, including office running costs.

Matt Eustace, solution engineering head at data management company Aiimi, notes this might prove a bright spot for IT in areas like robotic process automation (RPA), especially where benefits can be achieved with existing talent and technology.

"A crucial part of this will involve balancing the need to protect information in an increasingly hostile environment against the need to exploit that same information more efficiently to improve productivity," he suggests.

Increased macroeconomic challenges and ongoing supply chain issues could partly be counteracted by fostering collaborative efforts, even across industries, to produce data-driven insights that increase forecasting capabilities and reduce risk.

Sam Attias, product marketer at process mining company Celonis, confirms data sharing has traditionally been seen as inaccessible for businesses, although tribulations over the last two years have pushed more companies to share and benchmark data internally. "This leads to lack of visibility when companies can least afford it," Attias points out.

Criminals too will take advantage of technological advances, including artificial intelligence (AI). Ransomware isn't going anywhere, either, and the risk is higher when more organisations outsource so much of their infrastructure.

Some industries must return to the drawing board

Of course, it's potentially costly if you get it wrong. Many providers may not themselves have deep enough pockets to keep up with evolving demands. Even top cloud vendors, after all, missed revenue targets in Q3, according to Canalys, after all. The organisation notes that while demand remains strong, customers will be hoping to get better bang for every pound of spending.

With companies wary of overspending on cloud transformation, it will be incumbent on providers to justify the business case to satisfy increasingly thrifty customers, some of whom may be more cynical about the promise of any given solution than they might have been several years ago.

Prashant Ketkar, CTO at software firm Alludo, suggests this should result in even more focus on hybrid cloud, including full-fledged cloud services and legacy infrastructure integrations.

"Skill shortages will continue to be a challenge,” Ketkar points out, however. “Employees who have the needed skillsets to build serverless and cloud-native infrastructures are rare. And if they are lucky enough to find them, they’ll have to pay a lot to convince them to leave their company.”

Other essential and traditional growth areas in IT, including cyber security, may also be in line for – as CompTIA puts it – a 'return to strategy'. "Many technology businesses will have to leave their comfort zone to thrive,” says Carolyn April, senior director for industry analysis at CompTIA. “That means thoroughly examining and adjusting their current operations, sales and marketing, human resources and strategic innovation efforts."

While customers can be "as enthusiastic as ever about the role technology plays in their success", they will be much more demanding and scrutinising of any claims or promises made, she warns.

Adapting your business strategy

Some technologies might be deemphasised, with spending redeployed. Knowing how to budget in a financial squeeze will be crucial. Typical candidates for shelving might include new hardware implementations and software upgrades that don't deliver a cost advantage in the near term, relative to customer core objectives.

No vendor wants a demand for 'their' tech to be shelved, even temporarily, but even the most inept, unsympathetic businessperson must concede customers may need to sacrifice to survive. Providers that can't adapt to customer needs in such times may themselves be swept off the board.

Despite continued hype about metaverses and AI coming of age in the form of ChatGPT, it's clear B2B IT has bigger fish to fry. It's likely we'll see more consolidation across the B2B IT space in coming years – and not only in hardware or cloud.

Brian Knudtson, director of product market intelligence at cloud, connectivity and security company 11:11 Systems, says, for example, that despite demand based on rising cyber risk and attack rates, even cyber security providers are suffering.

"Acquisitions and layoffs have been high,” Knudtson confirms. “In 2023 and onward, the looming recession will contain the ambition of these innovators and their investors.”

There are three ways to address planned tech projects when the money gets tight. Businesses can delete them completely, put them on hold, or try to achieve them for less than the planned outlay.

There are many reasons IT projects fail. When a project has been identified as necessary, though, deleting it completely due to external economic factors might only rarely be the right call, which leaves the other two options. As ever, the devil is in the detail, so how do organisations approach budgeting for new or existing digital transformation projects in a financial squeeze?

The role of value engineering

Many firms have actually accelerated digital transformation projects rather than having scaled them back, Lee Foster, CTO of technology consultancy Opencast, tells IT Pro. “Putting off those critical strategic tech projects might help in the short term but, longer term, it can show up as outdated customer experiences, inefficient processes and disaffected employees – ultimately impacting operating effectiveness and your bottom line.”

Nevertheless, businesses must also think hard about how to make the money they do have stretch as far as possible in the context of the cost of living crisis savaging the tech industry. This is where value engineering can play a part. This strategy is all about looking at every element of a costed project and finding if, and how, it can be achieved at a lower cost with no loss of functionality.

This is tricky – and requires expertise. Poor decisions can require additional spending later on to fix errors. The right personnel need to be involved in the exercise, and it will take time to work out what can be done differently, postponed or left out completely – and what simply must be done.

Starting to value engineer a project with a target cost reduction isn’t the ideal way to go, either. That can lead to desperate cost-cutting to meet the mark and could jeopardise the project. It’s better to take your time, and have an open mind.

Prioritising the to-do list

It’s entirely likely a business has more than one tech project on its wish list. These always have to be prioritised, even when cash flow is good. When money is tight, prioritising becomes even more important.

Related link: Why businesses should invest their way out of a downturn

Last year, Gartner devised a set of actions organisations could take to give them an edge in the light of what was then seen as the possibility of a global digital recession. These measures still hold water. Importantly, Gartner suggests taking a strategic view that allows an organisation to assess projects across a range of factors including the cost and capital structure, products, pricing, employee value proposition (because staff are increasingly hard to recruit and retain) and risk profile.

The nine areas that merit attention are: accelerating the move to the cloud; focusing on making workflows faster, simpler and more agile; rethinking support for flexible working; reimagining the customer vision (that is to say, looking from the outside in – what do your customers expect and how can you meet these expectations, because if you don’t they may jump to another provider); and taking a look at how you use digital metrics so that they truly align with business outcomes.

What to do when a project is shelved

If you cannot value engineer a project to a point it’s affordable without compromising functionality – or it isn’t found to be a priority after the to-do list has been triaged – it might need to be paused. It’s important to be brave enough to put any project on hold, and to understand and articulate clearly the consequences.

Foster tells IT Pro that, in this situation, a business should “review the outcomes the project was intended to deliver”. Businesses should also ask: what additional technical and business risks will they have to carry as a result, and what can be done to mitigate them until the project is delivered?

It’s also really important to be aware that a shelved project is not a forgotten or deleted project. Foster advises that a business should keep the project visible on roadmaps and business plans discussed by decision-makers, while also continuing to report on the outcomes and key metrics the project was intended to address. This is so the consequences of not doing the project are clear, meaning it can be pushed up the priority list if necessary.

Stay positive and hunt for success

What’s most important in budgeting for new projects in a financial squeeze is not to think of any approach as ‘cutting’ or ‘deleting’. Instead, IT teams should take a more positive view centred on making the most of your assets, supporting the business through tough times, and maximising resources.

Finally, don’t lose sight of the fact that resources come in many forms – business finance today, business performance tomorrow, customer expectation and satisfaction, and the work experience and satisfaction of your people. All of these interplay to build up the entirety of a business’s resources.

Thinking in these terms may help businesses focus on the tech projects that really matter in an interconnected world, in which competitors and customers are also being squeezed. When everyone is in difficult times, a strategic approach and an eye on the positives can go a long way towards helping businesses take decisive action around tech projects.

TSB has been fined £48.65 million by two UK regulators after it experienced technical failures in its IT system which led to customers being unable to access banking services.

The bank updated its IT systems in April 2018 and migrated data for corporate and customer services onto a new IT platform and although the data migrated successfully, the platform began to suffer from technical failures immediately, according to the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).

This led to TSB’s banking services experiencing significant disruption across branch services, telephone, online, and mobile banking. All of the bank’s branches, and a “significant portion” of TSB’s 5.2 million customers were affected. It took until December 2018 for the bank’s services to return to normal, and it has already paid £32.7 million to customers in compensation.

The regulators branded the bank’s IT migration programme an ambitious and complex IT change management programme which came with a high level of operational risk.

They said that the bank failed to organise or control this programme adequately, and failed to manage the operational risks which came about as a result of its IT outsourcing arrangements with a critical third-party supplier.

“The failings in this case were widespread and serious which had a real impact on the day-to-day lives of a significant proportion of TSB’s customers, including those who were vulnerable,” said Mark Steward, FCA executive director of enforcement and market oversight. “The firm failed to plan for the IT migration properly, the governance of the project was insufficiently robust and the firm failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”

The FCA fined the bank £29,750,000 while the PRA fined it £18,900,000. Because TSB agreed to comply with the regulators, it has qualified for a 30% discount on the overall penalty. Without the discount, TSB would have had to pay a combined financial penalty of £69,500,000.

“We’d like to apologise again to TSB customers who were impacted by issues following the technology migration in 2018. We worked hard to put things right for customers then and have since transformed our business,” said Robin Bulloch, TSB’s chief executive officer. “Over the past four years, we have harnessed our technology to deliver new products and better services for TSB customers.”

What happened in the failed TSB IT upgrade?

TSB experienced an IT failure after the bank migrated records onto a platform that wasn’t ready and by a supplier that wasn’t fit to operate, according to independent investigators Slaughter and May.

The bank’s design, build, and testing of the platform, the Proteo4UK system - developed by Sabis - involved more than 1,400 people and 70 suppliers. This was described as unprecedented and incredibly complicated.

The bank lacked sufficient oversight of its suppliers and there was an absence of robust testing of the new system, read the report from the law firm.

TSB's then-CEO Paul Pester quit the organisation due to the IT migration problems in September 2018. Users of its online services were locked out of their accounts and continued to experience problems five months after the migration took place. Some customers also had access to strangers’ bank accounts.

In February 2019, the bank revealed the disaster had cost £330 million, with £125 million of the figure in customer compensation, £122 million for emergency recruitment, £49 million in fraud, and £33.5 million in uncollected fees. This was to be mitigated by £153 million from Sabis, its It provider that was owned by the bank’s parent company Banco de Sabadell.

TSB then took steps in April 2019 to bring its IT in-house, taking on direct contract relationships with third party technology suppliers. It said that it also wanted to build new technology products to help it to innovate faster.