For more than a decade, the enterprise technology conversation revolved around a single assumption: move to the cloud. Amazon Web Services, Microsoft Azure, and Google Cloud promised scalability, agility, and reduced infrastructure complexity.

Organizations embraced cloud-first strategies at speed, accelerated further by remote work demands, digital transformation initiatives, and the rise of AI-powered services.

Now, however, the mood is shifting.

Enterprises are not abandoning hyperscale cloud platforms, but they are becoming more selective about how and where they use them. Research from Gartner, suggests that by 2027, 90% of organizations will adopt hybrid cloud infrastructure. Cloud repatriation is growing in popularity.

Escalating operational costs, mounting concerns around digital sovereignty, and growing complexity in cloud environments are forcing IT leaders to ask a more nuanced question: what workloads actually belong in the cloud?

This article is the first in a three-part series examining the rise of post-cloud strategies. In part two, we'll explore the geopolitical and regulatory forces driving sovereign cloud adoption, while part three will look at how enterprises are designing hybrid architectures that balance cost, resilience, and control.

The hidden economics of public cloud

Cloud computing was originally sold as an economically more efficient model. Rather than investing heavily in on-premises infrastructure, businesses could pay only for what they used. That flexibility remains valuable, especially for rapidly scaling services or unpredictable workloads. The problem is that hyperscale pricing models have evolved into highly complex ecosystems that can be difficult to predict and manage.

Jay Litkey, SVP of cloud and FinOps at Flexera, says enterprises are increasingly being caught out not by headline compute costs or rising storage fees, but by secondary charges that quietly accumulate over time.

“Hyperscaler pricing has become much more granular over the last few years,” he explains. “The surprises are usually not the obvious things, such as compute or storage. It is often the layers underneath that catch people out, such as data transfer between regions, storage sitting in the wrong tier, duplicate environments, or commitment-based discounts that looked smart when they were signed but are no longer aligned to actual usage.”

Those hidden costs are becoming especially problematic for organizations running data-intensive workloads. Analytics platforms and AI systems generate enormous amounts of data movement, which can trigger substantial egress and replication charges.

Indeed, AI adoption can complicate costs massively. AI inference workloads and large-scale model training are driving fresh waves of unpredictable spending. James Brooks, lead for hybrid solutions at Hewlett Packard Enterprise, emphasizes that AI costs are now emerging as a major contributor to cloud bill escalation.

“The most common source of ‘cloud bill shock’ is rarely the primary service,” Brooks says. “Secondary and consumption-based elements such as data egress charges, long-term storage costs, AI inference and token usage, and over-provisioned or idle resources, are where costs quietly compound.”

For many enterprises, the result is a growing mismatch between expected cloud savings and operational reality.

Governance failures are amplifying cloud sprawl

While hyperscale economics are under scrutiny, many experts argue the biggest issue is not the cloud itself but how organizations govern it.

The ease of provisioning resources has created a culture of rapid consumption. Litkey says the core problem is that cloud adoption often outpaces the maturity of governance. “Cloud makes provisioning incredibly easy,” he explains. “Teams can spin things up in seconds and, without the right controls in place, that flexibility can create sprawl very quickly.”

This challenge is particularly acute for enterprises that migrated workloads quickly during earlier cloud transformation initiatives. In many cases, organizations simply lifted and shifted legacy infrastructure into hyperscale environments without redesigning architectures for cloud-native efficiency.

Justin Sharrocks, general manager, EMEA at Trusted Tech, says governance immaturity remains one of the biggest contributors to overspending. “Weak workload design, unclear ownership, and low FinOps maturity tend to drive inefficiency,” Sharrocks says. “Cloud pricing hasn’t necessarily increased; it’s become easier to mismanage.”

The challenge for IT leaders is that cloud costs are often distributed across multiple departments and teams. Engineering prioritizes speed and innovation, finance focuses on predictability, and operations teams concentrate on performance and resilience. Without shared accountability, visibility becomes fragmented.

James Peet, Practice, director for cloud and digital transformation at Ensono says organizations are increasingly integrating financial controls directly into architecture decisions. “FinOps needs to shift from looking backwards at what’s already been spent to shaping decisions before that spend happens,” he explains. “The organisations getting this right are making cost part of how systems are designed and built.”

Sovereignty concerns are changing workload placement decisions

Cost pressures alone are not driving post-cloud strategies. Regulatory scrutiny and current geopolitical uncertainty are increasingly influencing where organizations place workloads.

What was once considered a compliance issue has become a board-level strategic concern. Peet says organizations are paying much closer attention to who controls their data and which legal frameworks apply to it. “Data sovereignty has moved into day-to-day decision-making for leadership teams,” he says. “Organizations are looking more closely at who can access their data, and which legal frameworks ultimately apply.”

What was once considered a compliance issue has become a board-level strategic concern. Peet says organizations are paying much closer attention to who controls their data and which legal frameworks apply to it. “Data sovereignty has moved into day-to-day decision-making for leadership teams,” he says. “Organizations are looking more closely at who can access their data, and which legal frameworks ultimately apply.”

This shift is particularly visible in regulated industries such as financial services, healthcare, government, and critical infrastructure. Organizations operating in these sectors increasingly want guarantees around data residency, operational resilience, and jurisdictional control.

Mark Duff, VP international regions at Mitel, says concerns around sovereignty are now influencing broader infrastructure strategy. “Security, compliance and digital sovereignty are becoming deciding factors in technology decisions,” Duff says. “Data sovereignty, once a regulatory concern, is now becoming a strategic, board-level priority.”

These concerns are accelerating interest in sovereign cloud environments, regional cloud providers, and localized infrastructure models. Some enterprises are also reconsidering private infrastructure for workloads involving highly sensitive data.

James Brooks says geopolitical instability and regulatory complexity are fundamentally reshaping infrastructure decisions. “Data sovereignty and geopolitical risk have moved from secondary concerns to primary drivers of infrastructure strategy,” he explains. “Organizations are reassessing workload placement in response to regional instability, increased geopolitical tension, and growing operational resilience requirements.”

Importantly, most organizations are not moving entirely away from hyperscalers. Instead, they are becoming more selective about where workloads reside and how data is processed.

Hybrid infrastructure is becoming the default enterprise model

As enterprises reassess their dependence on hyperscale, hybrid and multi-cloud strategies are emerging as the dominant operational model.

Rather than centralizing everything in public cloud environments, organizations are increasingly distributing workloads across hyperscalers, private infrastructure, sovereign cloud platforms, and edge environments based on cost, latency, compliance, and performance requirements.

This transition reflects a broader recognition that not all workloads behave the same way.

Krystal Mattich, VP infrastructure and trust at Brain Corp, says the rise of physical AI is accelerating the need for distributed infrastructure. “The cloud-first era was built for digital workflows,” Mattich tells ITPro. “But physical AI introduces a different set of constraints: continuous sensor data, real-time decision-making, unreliable connectivity, and strict requirements around latency, safety, and data control.”

Edge computing is becoming increasingly important in industries that require processing large volumes of real-time data locally. Manufacturing, logistics, healthcare, and autonomous systems increasingly require infrastructure capable of operating independently from centralized hyperscale platforms.

Mattich emphasizes that enterprises are beginning to rethink the role of the cloud itself. “The cloud remains unmatched for scale, but the next phase of infrastructure involves using it more deliberately, not by default,” she says. “The key question shifts from ‘Can we centralize this?’ to ‘Where should this intelligence live to be most effective?’”

That philosophy increasingly defines the emerging post-cloud era. The future enterprise stack is unlikely to belong entirely to hyperscalers, private data centers, or sovereign cloud providers alone. Instead, it will consist of carefully orchestrated hybrid environments where workloads move dynamically based on operational requirements and business value.

Litkey says the era of default cloud adoption is already fading.“I do not think ‘post-cloud’ means moving away from cloud,” he says. “I think it means moving away from the default cloud.”

That shift may ultimately define the next decade of enterprise infrastructure strategy.

That shift may ultimately define the next decade of enterprise infrastructure strategy.

This article is Part 1 of the series Post-Cloud Strategy: What Comes After Hyperscale? In Part 2, we examine how sovereignty, security, and geopolitical pressure are accelerating the rise of regional and sovereign cloud environments.

The cloud is inescapable in 2025. It’s a $750 billion industry that underpins the vital applications, services, and platforms that power the digital economy.

Yet after more than a decade of enterprise migration and innovation in the cloud, analysis from IT infrastructure firm Kyndryl suggests many spent that time building sprawling, splintered architectures without a clear cut end goal in mind.

In the company’s annual Cloud Readiness Report 70% of CEOs admit they built their current cloud environment “by accident, rather than by design” – this often entailed periodic upgrades aimed at addressing short-term needs, rather than focusing on longer term strategic improvements.

Kyndryl said this shows that many lacked a “deliberate strategy” when pursuing cloud transformation projects, and the effects of this are starting to show with huge workload pressure placed on cloud environments, as well as growing security threats and evolving regulatory requirements.

“If companies benefitted from happenstance in the past, those days are over,” the report states. “Cloud success is no longer a matter of luck but design. The enterprises that thrive now are those that approach cloud as the foundation for intelligence, adaptability, and trust.”

AI is among one of the key factors bringing this lack of clear cut focus to light in 2025, according to Kyndryl. Organizations have increased cloud spending by 30% on average so far this year in a bid to supercharge AI adoption and build out infrastructure capacity to meet demand.

89% said these cloud investments have “made it easier to use AI” and have proved beneficial in underpinning adoption projects. Poorly designed, piecemeal cloud environments are hampering innovation on this front, however, the study added.

Indeed, 35% cited integration challenges as a top barrier to delivering a return on investment (ROI) with the technology.

Hybrid and multi-cloud in the spotlight

According to Kyndryl, hybrid and multi-cloud represent the light at the end of the tunnel for many enterprises locked in monolithic, rigid cloud setups.

Both these approaches have gained significant traction in recent years, the study found, with 84% of IT leaders revealing they now “intentionally use multiple clouds”.

Meanwhile, 41% are switching to a hybrid approach, repatriating data to on-premises environments while still hosting non-critical workloads on public cloud. This enables enterprises to balance control, compliance, and performance, the study noted.

“The gap between a reactive and deliberate cloud strategy has never been more consequential,” said Nicolas Sekkaki, global cloud practice leader at Kyndryl.

“With AI demanding seamless data access and governance requirements rapidly evolving, a hybrid cloud model is the differentiator that enables successful AI adoption,” he added.

AI-related considerations aren’t the only driving factor behind the shift to hybrid cloud, however. Kyndryl noted that geopolitical concerns and a concerted focus on data sovereignty, spurred on by regulatory requirements, are also influencing the trend.

75% of leaders said they were concerned about “the geopolitical risks associated with storing and managing data in global cloud environments”, for example, while 65% revealed they’ve “made changes to their cloud strategies” because of compliance concerns.

MORE FROM ITPRO

• Growing AI workloads are causing hybrid cloud headaches for IT leaders
• What is 'multi-cloud by design'?
• Hybrid cloud has hit the mainstream – but firms are still confused about costs

As geopolitical tensions mount, UK IT decision makers are getting increasingly wary about using US cloud providers.

Research from Asanti found 95% of IT leaders are concerned about data sovereignty while a similar number have voiced worries about data residency. The result is that more than half (52%) are now taking strategic steps to reduce their exposure to US providers.

45% of those currently using US public cloud platforms said they plan to actively limit their data’s exposure to US jurisdiction in light of recent political developments.

“Organizations are becoming more aware and more wary of where their data is stored and who has jurisdiction over it,” said Stewart Laing, CEO of Asanti. “It’s no longer just about performance or cost. It’s about trust, control, and strategic sovereignty.”

There were other issues, however. More than three-quarters of those using US public cloud said that the operating costs were higher than they'd expected, and virtually all said they'd faced challenges during the migration.

On top of the costs, those bringing applications back on-premise or into colocation facilities cited limited control and customization, low data transfer for real-time applications, and security, compliance, and risk management concerns.

Two-thirds said they wished they'd taken a hybrid approach rather than going all-in on public options.

"Adapting organizational processes and culture to the cloud-based way of working was a significant challenge in migrating to public cloud," said one respondent:

"One of the biggest challenges was making sure that sensitive financial data was safe, and adhered to regulatory requirements,” another added.

The rise in companies building their own AI applications is also prompting many to reconsider their use of public cloud.

With the huge amounts of data storage and processing required, subscription models can be expensive, data transfer speeds can be too low for real-time applications, and compliance can be complicated and risky on globally distributed cloud servers.

Repatriation is easier said than done

Repatriation is by no means a simple task, however, and those embarking on this process have encountered significant challenges.

Of those actively pursuing cloud repatriation, 38% cited the complexity of moving applications back to internal systems, while 36% complained about inflexible contracts or cloud vendor lock-in.

Nearly half (41%) said they were worried about a lack of internal skills for repatriation.

Overall, while most people weren't unhappy with the cloud, they wished they had kept more applications in their own IT architecture - and that they'd planned better before taking the plunge.

Half said they should have used external consultants, and 45% that they should have made sure they better understood the public cloud providers' terms and conditions.

Four-in-ten believe they should have carried out more internal due diligence.

“Cloud is powerful – but not perfect. The lesson here is that infrastructure strategy needs to be driven by business needs, not vendor hype,” said Laing.

“We strongly advise UK organizations to revisit their current and future hosting strategies with a more critical eye, especially as AI workloads, regulatory scrutiny, and cyber threats escalate.”

MORE FROM ITPRO

• "Missed expectations" are driving the cloud repatriation trend – but it’s not as bad as you might think
• Enterprises are keen on cloud repatriation – but not for all workloads
• Cloud repatriation may be nipping at hyperscaler market share, but it’s a boon for VMware

We’re past the peak cloud hype of the 2010s and now well into the era of cloud maturity. But even as businesses have come to terms with multi-cloud and hybrid cloud models, new considerations have arisen, such as the growing push for cloud sovereignty and regional data center demand.

AI has put additional pressure on firms to figure out exactly what they’re running in the cloud – as agentic AI drives organizations to consider ‘always on’ workloads and whether this is feasible in a public cloud model.

How can leaders navigate this changing cloud landscape and what is on the horizon?

In this episode, Rory speaks to Alex Grimshaw, CTO at Microsoft Azure UK, to explore what he sees as the key trends for the cloud and how AI will shape it in the coming years.

Highlights

"So cloud maturity for me, certainly for my engagement, whether that's from C-level or IT leaders, we're very comfortable with IaaS. But now, what's our approach to becoming more pervasive or using more sophisticated services like AI? And how do we enable or garner an internal culture and kind of process where we can adopt these faster moving services like AI, microservices, etc, in this new, bold world? That's certainly when I'm seeing that shift happen."

"We made, in November 2023, a huge commitment to the UK government that we would make a huge investment in UK AI infrastructure particularly. And obviously, a skilling commitment is there because, of course, it's not only ideal just to have infrastructure in the UK but of course you want to be able to skill up people so they can actually utilize that infrastructure."

"The research of Microsoft, we released a paper that challenged, almost the idea that the copilot type technologies were almost dumbing down our ability to critically think about scenarios, because a lot of people may utilize a tool like that and just take for granted what the response is. It's not augmenting human thought, it's almost replacing human thought, which is clearly not the idea here."

Footnotes

• UK government inks five-year cloud and AI deal with Microsoft
• “A long time coming” - Microsoft data residency plans will see firm store all cloud customer data in the EU
• What is a sovereign cloud?
• Small language models are growing in popularity — but they have a “hidden fallacy” that enterprises must come to terms with
• “The tech guys want to move to the cloud, the finance people want the savings”: IT leaders feel ‘rushed’ to the cloud – here’s why slow and steady wins the race
• Microsoft says AI tools such as Copilot or ChatGPT are affecting critical thinking at work – staff using the technology encounter 'long-term reliance and diminished independent problem-solving'

Subscribe 

• Subscribe to The IT Pro Podcast on Apple Podcasts
• Subscribe to The IT Pro Podcast on Spotify
• Subscribe to the IT Pro newsletter
• Join us on LinkedIn

So long, public cloud, a whopping 97% of surveyed companies say they plan to ditch the public cloud in favour of in-house infrastructure.

The growing trend of cloud repatriation doesn't mean the end of the public cloud, however, as most of those companies aren't shifting every workload over, just a few specific ones.

Node4 surveyed 601 executives at mid-market firms and found that 49% of companies plan to shift a few applications and workloads away from the public cloud over the next year, though 43% plan to move a "significant" number — and 5% want to repatriate all of their work.

"This demonstrates a clear preference for hybrid environments and a shift from cloud-first to cloud-appropriate," said Node4 CEO Richard Mosely. "We believe this will be the mid-market’s default setting for the foreseeable future."

The poll follows research from IDC last year showing that cloud migration is a growing trend, but also suggesting that only 8-9% of companies plan a full workload repatriation, with most removing selected apps instead.

The idea of cloud repatriation has gathered steam helped by the high-profile example of SaaS company Basecamp, which has said it would save $10 million over five years by ditching the cloud in favor of its own hardware.

Explaining the shift from public cloud

The main driver behind the shift is performance, according to Node4. The surveyed companies have found some workloads simply aren't suitable for public cloud, applications aren't performing as expected, and users are frustrated by application latency.

"Organizations that migrated to the public cloud several years ago have realized that while their environments provide many benefits and offer more scalable on-demand performance than other hosting options, they aren't always the best fit for every application," said Moseley.

The second most common reason for shifting workloads was data sovereignty, with 30% of those polled noting that motivation. This growing focus on data sovereignty is being accelerated by regulatory concerns, but researchers added it also reflects "broader unease" around control, jurisdiction, and access.

Beyond those reasons, the report also said repatriation was motivated by risk management (29%), technical limitations (27%), costs (26%), compliance (26%), and security (21%).

Node4 said that last point might come as a surprise given most mid-market organizations would "struggle to replicate the advanced security and access configurations available in public cloud environments."

"Cybersecurity confidence declines as organizations move further into the cloud," the report found. "94% of organizations running primarily on-premises say they’re confident in their ability to prevent and respond to cyberattacks. That number falls to 78% for fully cloud-based organizations."

The report is the latest to suggest dissatisfaction with the cloud. Research by Gartner last month revealed that a quarter of organizations are experiencing frustration with cloud adoption projects, with a separate study showing three quarters of respondents had exceeded their cloud budgets.

MORE FROM ITPRO

• Say goodbye to walled gardens, Oracle is doubling down on multi-cloud
• Enterprises are set to waste $44.5 billion on needless cloud spending this year
• Cloud spending projected to grow 19% this year on back of strong 2024

Well, it's been a very busy week – as the blog below proves – but Google Cloud Next 2025 is officially at an end. Throughout the week Google Cloud unveiled its new TPU, new AI agents and the networking needed to run them, a new protocol for AI interoperability, and much more. Read below and check the ITPro website to catch up on all this, as it happened.

Good evening from Las Vegas, where choice attendees from the event have just been treated to a sneak peek of a brand new attraction opening at the Sphere in August – The Wizard of Oz at Sphere.

Made in partnership with Warner Bros. Discovery, Google Cloud, and Magnopus, the finished product will run as a multi-sensory, 16k recreation of the original 1939 movie for the Sphere's 160,000-square-foot screen using Google DeepMind's video generation models.

After entering the Sphere's cavernous arena, we were treated to an opening speech by Sundar Pichai, CEO at Google. He played tribute to the efforts of all the engineers and creatives who worked on the project, which required intense research and overcoming numerous technological hurdles. Ultimately, it was created using Google DeepMind's video generation model Veo 2.

"We have seen significant improvements: super low latency, incredible video quality, multimodal output, so many things we couldn't have done with AI even 12 months ago," Pichai said.

"Beyond the technical capability, it took a whole lot of imagination, creativity, and collaboration. Our goal: giving Dorothy, Toto, and all of these iconic characters new life on a 16k screen in super resolution."

After Pichai's speech, we were treated to an extended video showing the behind the scenes of the project. It included detail on how difficult it is to extend existing video footage to fit the Sphere's unique aspect ratio and resolution, as well as the complexity of generating entirely new footage of characters when they would otherwise have been offscreen.

Engineers had to work iteratively and study the original plans for the film to recreate the characters without making them generic.

The final project includes special effects such as wind which is blown on the audience and haptic rumbling under the seats – of which we were given a very interactive example.

Next, it was time to hear from Thomas Kurian, CEO at Google Cloud, and James Dolan, CEO at Sphere Entertainment, on the challenges of bringing The Wizard of Oz to the Sphere.

"I've been running companies for 40 years and this is one of the first times I ever felt that I wasn't a customer – I was a partner," said Dolan, praising the hands-on collaboration of the Google Cloud, Google DeepMind, and Magnopus teams.

Kurian noted that a total of twenty different models were needed to bring the Wizard of Oz at Sphere to life, with engineers leveraging Google's extensive TPU architecture and inventing new techniques to expand and recreate the original film frames. This was an enormous technical challenge, not least because the scale and resolution of the screen makes it hard to hide any mistakes in the final image.

"Most importantly, the camera and this amazing theater here at the Sphere is something that doesn't exist anywhere else in the world," he said. "So it's almost like you were told to do AI and your first project was your PhD thesis."

With that, Kurian officially started Google Cloud Next, with confetti cannons heralding the official start of the event.

"If tonight's event sets the tone for what we plan to bring you for the next three days, I think it's safe to say it's going to be an incredible week," he said.

Kurian will be back onstage bright and early tomorrow morning at the opening keynote 'The new way to cloud'. We'll be bringing you all the updates from that and throughout the conference, both here and across ITPro so stay right here for all the very latest.

In the meantime, why not read my pre-conference analysis of what Google Cloud can do to set itself apart from competitors at this event and the key story it needs to tell.

Last night, we were given a glimpse into what to expect this week at the Sphere, with preview speeches from Google CEO Sundar Pichai and Google Cloud chief executive Thomas Kurian onstage. You can read all about the goings on from the evening further down the live blog.

We've already had a range of big announcements ahead of the opening keynote, including the launch of Google's new 'Ironwood' AI accelerator chip and the launch of Google Unified Security, which aims to drive cloud security capabilities for enterprises and demystify cyber complexity in the cloud.

You can read all about these announcements below:

• Google Cloud wants to tackle cyber complexity – here's how it plans to do it
• Google Cloud announces major computing boost with Ironwood chip, new hypercomputer upgrades

As a reminder, the theme for this morning's keynote is 'The new way to cloud', with a focus on interoperability, unification, and more intelligent automation through Gemini AI.

As you can see, there's a huge amount of foot traffic this morning as we pile into the Michelob Ultra Arena at Mandalay Bay. As is usual for tech conferences, we're being serenaded by a live DJ inside the arena itself – more unusual is the visuals for this morning's music, which have been generated entirely with Google DeepMind's video model Veo 2.

We're now learning a bit more about how that music has been made for the event, via a behind-the-scenes video.

Human musicians were first recorded and then their samples were fed into Music AI Sandbox, which could produce audio outputs that the producers can edit, alter, and use as the basis for new noises.

Paired with Google Cloud's work on The Wizard of Oz (details lower down in the live blog), it's clear that Google Cloud is eager to show what it can offer to industries that have been more reluctant to adopt AI to date.

There's a clear need to acknowledge fears that AI could damage the livelihoods of artists. A constant refrain at yesterday's event at the Sphere was that ideally, AI should be used to empower creatives rather than replace them. In the event yesterday, Google Cloud suggested that new roles could appear in the creative sector as a result of AI breakthroughs – it will be interesting to see if this is expanded upon at all in the keynote.

The music we're hearing will apparently be played throughout the entire conference – musical group The Meeting Tree have scored an entire soundtrack for the event, with the theme of AI.

Just one minute left until the keynote begins in earnest. Stay tuned as we bring it to you live.

And we're off! To begin with, as is normal for keynotes, we’re being shown a sizzle reel of Google Cloud’s impact on the industry and hyping up the potential for AI in the enterprise.

Today's sizzle reel is peppered with AI-generated video, in a show of sophistication by Google Cloud.

Now the keynote proper begins, with Thomas Kurian, CEO at Google Cloud, taking to the stage to kick us off.

“Google’s AI momentum is exciting – we’re seeing more than four million developers using Gemini, a 20 times increase in Vertex AI,” says Kurian, noting that the firm processes more than 2 billion AI requests per month in workspace, driven by businesses.

To give the crowd a taste of what AI can do, Kurian welcomes Sundar Pichai, CEO at Google, to the stage.

Pichai opens by paying tribute to The Wizard of Oz at Sphere and then moves on to make some announcements.

First off, Pichai says that Google will make $75 billion investment in capital investment in 2025, directed toward servers and data centers.

To further support its AI-hungry customers, Pichai announces that Google Cloud will make its global network available to Cloud customers via Cloud WAN, a new managed solution for connecting enterprises across a wide area network.

"This builds on a legacy of opening up our technical infrastructure for others to use," Pichai says.

Next, Pichai announces Google Cloud's 7th generation TPU, Ironwood which brings sizeable performance and efficiency improvements over its predecessors.

A few key stats about Ironwood: it’s capable of 42.5 exaflops of performance, 24 times the per-pod performance of the world’s fastest supercomputer El Capitan.

Read more in our full coverage of Ironwood here.

Pichai draws a direct line between Ironwood and Google's quantum chip Willow, which it announced last year.

Both are used as examples of the boundaries Google is pushing within its hardware teams, as well as in divisions such as Google DeepMind to crack problems such as weather prediction.

The announcements are coming fast here in the arena. Pichai rattles off stats about Gemini 2.5, the firm's new thinking model which is currently the top-ranked chatbot in the world per the Chatbot Arena Leaderboard.

He also notes that Gemini 2.5 Flash, Google Cloud's low cost, low latency model that allows organizations to balance reasoning with budget for every output.

It's always good to hear directly from a customer about how AI is helping their business.

We've just been shown a reel from McDonald's, in which Chris Kempczinski, CEO at McDonald's, explained how AI can be used to predict when machines will need maintenance in McDonald's restaurants or provide workers with quick answers to their questions.

With that, Pichai is off and Kurian is back onstage.

He explains how Google Cloud is uniquely positioned to support customers, with a massive range of enterprise tools to build AI agents and an open multi-cloud platform for connecting AI to one's existing databases.

"Google Cloud offers an enterprise-ready, AI platform built for interoperability," he says.

"It enables you to adopt AI deeply while addressing the evolving oncerns around sovereignty, security, privacy, and regulatory requirements."

Finally, Google Cloud's infrastructure is core to its advantages for customers. To help illustrate this point, Kurian welcomes Amin Vahdat, VP, ML, Systems and Cloud AI Google Cloud to the stage.

Vahdat runs through the core infrastructure announcements from today including Ironwood, AI Hypercomputer, and data storage announcements. As a reminder, you can read about these in detail announcements here.

It's not all about running workloads in the cloud, Vahdat says. Google Cloud is also announcing Gemini on Google Distributed Cloud, which allows firms to run Gemini locally – including in air-gapped environments.

This opens the door to government organizations using AI in secret and top secret environments.

Google Cloud's close relationship with Nvidia runs throughout its hardware announcements today. To hear more, we're being shown a video of Jensen Huang.

Huang describes the Google Distributed Cloud as "utterly gigantic".

"Google Distributed Cloud with Gemini and Nvidia are going to bring state-of-the-art AI to the world's regulated industries and countries," he says.

"Now, if you can't come to the cloud, Google Cloud will bring AI to you."

Kurian is back onstage, reminiscing on the large progress Google Cloud made last year with Gemini's multimodality and large, two million token context window.

Gemini is now included in all Google Workspace subscriptions and Kurian tees up a video to show us how businesses are making good use of the service already. In the video, customers say that Gemini is already cutting down their toil and opening new time for valuable work.

Onto some more of that creative content we had tee'd up with the DJ (you see, we said it might come up again).

Kurian highlights Imagen 3, the firm's image generation model, as well as Veo 2, its video generation model. The latter is now capable of adding new elements into filmed video and producing videos that mimic specific lens types and camera movements.

Finally, we're also told that Lyria is now available on Google Cloud. The model can turn text prompts into short music outputs – the first tool of its kind in the cloud, Kurian says.

Here to show us all how this works in practice is Nenshad Bardoliwalla, Director, Product Management, Vertex AI, Google Cloud.

We're told his mission is to create a trailer for the party to end the event – complete with a gag about Kurian not wanting to be able to sing Chappel Roan but not getting permission.

Bardoliwalla opens Vertex Media Studio, in which he can ask for a drone shot of the Vegas skyline and choose specific settings such as frame rate video length.

Once videos have been generated, the user can fine-tune them with new in-painting controls.

In his ive demo, Bardoliwalla paints around an unwanted stage-hand in a close-up clip of a guitar to seamlessly remove him from the final result.

Next, Bardoliwalla uses Lyria to generate music for the trailer. This can be combined in the platform to create quick clips for advertising and more.

Promising Kurian will crowd-surf at tomorrow's concert, he welcomes the CEO back onstage.

Kurian moves quickly onto Vertex AI, with a look at how it helps customers.

"Tens of thousands of companies are building with companies in Gemini," he says, giving examples such as Nokia buiding a tool to speed up application code development, Wayfair updating product attributes five times faster, and Seattle Children's Hospital making thousands of clinical guidelines searchable by pediatricians.

Vertex AI provides customers with all of Google's internally-made models as well as open models such as Meta's Llama 4.

"With Vertex AI, you can be sure your model has access to the right information at the right time," he says.

"You can connect any data source or any vector database on any cloud, and announcing today you can build agents directly on your existing NetApp storage without requiring any duplication."

Kurian adds that Google Cloud has the most comprehensive approach to grounding on the market.

It's time to talk about agents – sound the klaxon. These advanced AI assistants work to automate tasks autonomously, as Kurian explains.

To hear more about the potential of agents, we're shown a clip of Marc Benioff, CEO at Salesforce.

"Right now, we're really at the start of the biggest shift any of us have ever seen in our careers," Benioff says.

"That's why we're so excited about Agentforce and our expanded partnership with Google. I just love Gemini, I use it every single day whether it's Gemini inside Agentforce, whether it's all the integrations between Google and Salesforce."

Starting today, Kurian announces, customers can scale agents across their environment, deploy ready-made agents, and connect agents together.

This will largely be driven by the Agent Development Kit, a new open source framework for widespread systems of agents interacting with one another.

Agent2Agent, a newly-announced protocol. will allow disparate agents to communicate across enterprise ecosystems regardless of which vendor built them and which framework they are built on.

"This protocol is supported by many leading partners who share a vision to allow agents to work across the agent ecosystem," Kurian says.

Already, more than 50 partners including Box, Deloitte, Salesforce, and UiPath are working with Google Cloud on the protocol.

Within Google Agentspace, enterprises can have Google-made agents, as well as third-party agents and custom-built agents easily communicate with one another.

Here to show us more is Gabe Weiss, Developer Advocate Manager, Google Cloud.

Weiss shows us how he can simply identify potential issues with his business' customers within Agentspace. Based on this, he can ask for an agent to identify client opportunities in the future. He can then iterate on this prompt by asking for an audio summary of its findings, to be delivered to him every morning – creating an in-depth, analytical agent with a few sentences of code.

Finally, he can ask for the agent to write an email within Agentspace, which once approved is automatically sent via Outlook without him having to open the app himself.

"Agentspace is the only hyperscaler platform on the market that can connect third-party data and tools, and offers interoperability with third-party agent models," says Weiss.

Customers are using all kinds of agents to unlock new value in their enterprise environment – but what are these different kinds?

Kurian welcomes Lisa O'Malley, leader of Product Management, Cloud AI at Google, to explain more.

O'Malley says we'll start with customer agents, showing us a video of how Reddit is using Gemini for Reddit Answers, a new conversational layer on the message board website.

Next, we're told about how Vertex AI Search is helping healthcare and retail organizations to deliver more relevant results to their customers and boost their conversion rates.

O'Malley says Google Cloud's Customer Engagement Suite is already helping organizations meet customer knowledge demand.

She gives the example of Verizon, which adopted the Customer Engagement Suite. The firm uses the offering to provide its 28,000 customer assistants with up-to-date data and move customers to resolution even quicker.

O'Malley announces new feaures for Customer Engagement Suite, including human-like voices, integration with CRM systems and popular communications platforms, and the ability to comprehend customer emotions.

In a demo by Patrick Marlow, product manager for Applied AI at Google Cloud, we're shown how the suite can be used to get instant answers and assistance at a garden store.

Marlow is able to hold petunias he has purchased up to a camera and receive real-time, voice output assistance from the agent. For example, he asks if he's buying the right fertilizer for the plants and the agent is able to recommend an alternative fertilizer and add it to his cart.

In cases where human assistance is required – such as Marlow asking for a 50% discount on his purchase – the agent escalates to a manager in Salesforce.

O'Malley is back onstage to discuss purpose-built agents.

For example, Mercedes Benz is using AI for conversational search and route mapping in a new line of its cars.

We're back to creative agents – it seems creative output is a major focus for Google Cloud at this year's event. We're being told about Wizard of Oz at Sphere again – find the details for that at the start of this live blog.

Imagen 3 and Veo 2 models are coming to Adobe Express, we're told, as the firm pushes forward on AI-generated content.

Moving onto data agents, we're now welcoming Brad Calder, VP & GM, Google Cloud, onstage.

He tees up a video showing that Mattel is using Google Cloud's AI to reduce the need for its teams to manually analyze customer sentment.

"We can instantly identify key issues and trends improving growth, efficiency, and innovation," says Ynon Kreiz, CEO at Mattel.

"For example, we improved the ride mechanism in the Barbie Dreamhouse elevator."

Calder says that Google Cloud is announcing new agents for every role in the data team.

Data engineering agents, embedded within BigQuery pipelines, can perform data preparation and automate metadata generation.

Meanwhile, data science agents can intelligently select models, flag data anomalies, and clean data to reduce the time teams have to spend manually validating all data.

Finally, Looker conversational analytics allows users to explore data using natural inputs. This will be made available via a new conversational analytics API, now in preview, so data teams can embed this easy question and answer layer into their existing applications.

We're moving onto Gemini Code Assist, Google Cloud's AI pair programmer, which Calder says is already being used by a wide range of enterprises.

Google Cloud is today announcing Gemini Code Assist agents, which can help developers to quickly complete tasks such as the generation of software and documentation, as well as AI testing and code migration.

Via the new Gemini Code Assist Kanban board, developers can interact with agents to get insight into why they're making the decisions they are and see which tasks they're still yet to complete.

Continuing at pace, we're now welcoming Sandra Joyce, VP, Google Threat Intelligence, to hear about the security announcements Google Cloud is making today.

Chief among these announcements is the new Google Unified Security, the new converged security platform for better visibility and faster threat detection.

Read our detailed write-up on Google Unified Security here.

In a demo, Payal Chakravarty shows us how Google Unified Security can detect vulnerabilities in code and extensions used within an enterprise's environment.

The agentic, autonomous features of the new platform can automatically detect when an AI extension has put sensitive data at risk and flag it to a human in the company's security team. In addition to providing response advice, it can proactively quarantine the suspicious extension.

We're rounding out now and Kurian is back onstage to bring the keynote to a close.

He acknowledges Google's recent acquisition of Wiz as evidence of how seriously it takes cybersecurity.

Kurian says Google Cloud is working hard on making its innovations easy to adopt in four key ways:

• Better cross-cloud networking.
• Hands-on work with ISVs to improve Google Cloud integration.
• Working with service partners on agent rollouts.
• Offering more sovereign cloud compatibility via Google Cloud.

"What an amazing time for all of us to experience and work with these technology advances," Kurian concludes.

"We at Google Cloud are committed to helping each of you in effect by delivering the leading enterprise-ready, AI-optimized platform with the best infrastructure, leading models, tools, and agents. By offering an open multi-cloud platform and building for interoperability so we can speed up time to value from your AI tests, we are honored to be building this new way to cloud with you."

And with that, the first keynote of the event comes to a close. We'll keep bringing you all the updates as they happen live from Las Vegas.

If you've ever wondered what it's like on the ground at an event such as Google Cloud Next 2025, this photo gives a good impression. You can see it's incredibly busy here, with attendees in the thousands entering and exiting each keynote. Google Cloud has a huge range of partners and customers, many of whom will be looking to reaffirm or expand their business relationship to make the most of AI, so the event is thick with meetings, roundtables, and live demos in the expo hall.

It's coming up on 8:00 in Las Vegas and we're back to report on day two of Google Cloud Next 2025. With the developer keynote due to kick off this afternoon, there's sure to be more detail on all the announcements we've heard about so far and more hands-on demos of some of Google Cloud's newest tools.

Before the developer keynote later on, we're getting to hear from Thomas Kurian, CEO at Google Cloud, Tara Brady, president EMEA at Google Cloud, and Eduardo Lopez, president Latin America at Google Cloud in a press conference.

Kurian begins by highlighting how hard Google Cloud is working to expand across the globe and how it now operates in 42 regions.

The first question is on the challenge of AI adoption in certain countries, to which Kurian says Google Cloud is working hard on its sovereign cloud capabilities. He also highlights the importance of it allowing companies to use its global technology infrastructure in meeting security requirements.

Now a question on pressure facing the EMEA region from our sister publication TechRadar Pro.

In response, Brady says that Google Cloud is helping EMEA customers with security and flexibility, which are very important in the region, particularly when it comes to not being locked into long-term contracts.

He adds there’s a competitive advantage to adopting AI and some of the changes in the past few months have changed the European attitude to the technology.

Asked a question on how Google Cloud is meeting the increased energy demand from data centers for generative AI, Kurian says the cost of inference has decreased 20 times.

“We have done many things over the years to improve the infrastructure – for example, we introduced water cooling many years ago for our processors," he says.

Kurian also said Google is working hard to identify opportunities for renewable energy to power data centers and looking to using nuclear as a source of power for its sites.

A question on tariffs, now – which have been a repeated talking point throughout the event. Kurian is asked whether Google Cloud is prepared for their impact and in response says the “tariff discussion is an extremely dynamic one,” and that Google has been through many cycles like this including the 2008 financial crisis and the pandemic.

We’ve just had a question on how easy it will be for companies to adopt Agentspace when one’s enterprise has already invested heavily in other AI ecosystems such as Microsoft or Oracle, from Diginomica.

In response, Kurian says Agentspace arose from an observation that organizations struggle with information searches, particularly across different apps. He adds that the service already has 100 connectors live and 300 connectors in development so people can adopt it without ripping out and replacing anything.

Now another question on tariffs from Techzine – specifically on the potential risk that American companies could be ordered to stop delivering services to European customers.

Kurian says that technologically, Google Cloud can prevent this from impacting its customers, because the firm doesn’t have access to its customer’s environments and no ability to reach their encryption keys.

He adds that for customers who are worried about long-term survivability, Google Distributed Cloud runs fully detached with no connection to the internet.

Finally, he adds that Google Cloud has European partnerships with firms such as TIM and Thales, to operate in a supervisory role and provide trust and verification in Europe.

With the press conference done, all eyes are now on the developer keynote – we'll be seated and ready to bring you images and updates as they come.

There are just 30 minutes to go until the developer keynote. Presented under the subtitle 'You can just build things', we're expecting this session to be all about the ease of deploying AI with Google Cloud – expect to hear lots about Agentspace, automation in Workspace powered by Google Workspace Flows, and Google Cloud's new infrastructure for training custom AI models.

We're now sat in the arena and once again listening to the AI-sampled music of The Meeting Tree onstage, accompanied by abstract visuals generated with Google DeepMind's video generation model Veo 2.

And we're off! As with yesterday's keynote, we're starting with a sizzle reel – this time all about developers, skills, AI, and production.

To count us down for the final 30 seconds, we're being shown numbers generated by Veo 2, i ncluding some truly abstract clips such as a giant 1 blasting off to a planet shaped like a 0.

Here to welcome us to the developer keynote is Brad Calder VP & GM at Google Cloud. He says Google Cloud is innovating in three key areas. First up, helping companies build agents, which can collaborate to achieve goals on behalf of users.

Next, Google Cloud is helping developers be as productive as possible via Gemini Code Assist and Gemini Cloud Assist.

Finally, Gemini underpins all these innovations with its large context window, multimodality, and advanced reasoning.

Here to tell us more is Stephanie Wong, head of developer skills & community at Google Cloud and Richard Seroter, chief evangelist at Google Cloud.

Wong says today's keynote is all about how Google Cloud can help developers build software, from start to scaling, and a sneak peek at the future of development in Google Cloud.

Gemini is key here, of course. Here to show us how is Paige Bailey, AI developer experience engineer at Google DeepMind, and Logan Kilpatrick, senior product manager at Google DeepMind.

The two are going to make an AI app to help remodel Bailey's kitchen, taking into account all the details and laws around doing that.

To start, the pair ask Gemini 2.0 Flash to generate a very detailed plan for remodeling a 1970s style kitchen. Bailey says the model has 65,000 token output window, which is great for generating long plans.

Straight away, the model's 'thinking' box shows the model has considered the floor plan (based on a sketched floor plan Bailey provided) and local regulations and building codes.

In another tab, we're shown Bailey has used Gemini to generate a prompt for its image generation capabilities and then used this to produce a concept image for the kitchen. It can produce the image, which is photorealistic, in just a few seconds.

Bailey asks the model to add two globe pendant lights into the image and within seconds, they've been added.

Wong asks Bailey to go into more detail on the benefits of long context windows.

"This example is some things like photos, images, and a few sketches," Bailey says. "But with long context, you're able to send full videos to use for your projects."

Next up, Seroter wants to know what an agent can do.

"An agent is a service that talks to an AI model to perform a goal-based operation using the tools and context it has," Wong explains.

Wong and Seroter say Vertex AI’s new Agent Development Kit can create an agent that can verify building codes and go deeper into meeting Bailey’s requirements.

Here to demo this is Fran Hinkelmann, developer relations engineering manager at Google Cloud.

Hinkelmann says agents need instructions, tools, and a model. So to start, she uses Gemini in Vertex AI to create a custom instruction: in this case, taking a customer request and creating a PDF proposal.

Next, Hinkelmann adds an 'analyze bulding codes' tool, which allows the agent to use RAG to check a private dataset for local buildings.

Performing RAG requires accessing information from outside the agent, for which model context protocol (MCP) comes in Handy, Hinkelmann says.

The next step is to select the AI model Hinkelmann wants for the agent. Because ADK is model agnostic, Hinkelmann says she could use Llama 4 or another model – but in this case will use Gemini 2.5.

The moment of truth comes – and the agent produces a detailed PDF proposal that Hinkelmann can access right within the prompt window.

We’re now learning about Vertex AI Agent Engine, which has recently been made generally available and helps enterprises deploy agents with enterprise-grade security. We’ll also hear about Agentspace, Google Cloud’s new solution for building no-code agents, or for developers to share agents they’ve built with the rest of their company.

Abirami Sukumaran, developer advocate at Google Cloud, is here to show us how to build agents within Vertex AI using ADK with Gemini.

Sukumaran creates a multi-agent system, right here in the keynote. This means creating a ‘root agent’ with a number of sub-agents, which will work together to automate a task.

Once she's deployed this agent system, she'll be able to share it within Agentspace, where she can interact with the agent.

Within Agentspace, Sukumaran asks for information related to ordering, expecting a relevant sub-agent to provide the right response. But instead, we're presented with an error message.

To fix this issue, Sukumaran shows us Cloud Assist Investigations, a new tool for diagnosing problems in infrastructure and massively cutting down on debugging time.

Within the tool, Gemini suggests a fix to the problem and Sukumaran can immediately deploy it without having to affect anyone’s access to the agent.

Seroter says that Google Cloud is helping developers with its new Agent2Agent, which not only connects agents together but helps developers discover new agents to connect with in the first place.

Google Cloud is at pains to stress that it does not require devs to use Gemini – with Vertex AI Model Garden, there's a wide range of models to choose from.

Debi Cabrera, senior developer advocate at Google Cloud is now onstage to show us how developers can use Gemini in their IDE of choice, and then bring their model of choice to Google Cloud for their apps.

For this demo, Cabrera is using the Windsurf IDE, which is intended to support devs with 'vibe coding'.

Cabrera wants to make an agent to help with budgets, powered by Gemini 2.5. Moving over to Cursor, Cabrera adds input validation to the agent.

We're really cooking now, as Cabrera moves over to Gemini Copilot to produce unit tests by entering a prompt in Spanish – which it quickly does.

Cabrera says while Gemini is her favorite model, Model Garden on Vertex AI offers a range of models from Meta, Mistral, and Anthropic among others.

Within Model Garden, developers can test out the model's response to questions like "what capabilities can you offer for designing renovation subjects?" and see how it responds to evaluate which one best suits their purpose.

"We're striving to meet developers where you are," says Cabrera. "Your team can build great apps using Gemini as your IDE of choice, or you can use Vertex AI Model Garden to call your model of choice. No matter what you use, we're excited to see what you come up with."

What does all this look like in practice? Wong and Seroter say MLB is using Gemini to measure its 25 million data points per game. Google Cloud ran a hackathon to see what innovative use cases people could come up with for Gemini in sports.

The winner of the Cloud X MLB (TM) Hackathon was Jake DiBattista, who's here now to tell us all about his project – measuring pitches using MLB high-speed video.

Via Gemini API, DiBattista created a system that can analyze video and produce text analysis of the pitch in the video – both for pros and amateurs.

To demonstrate the amateur pitch, we're shown a clip of Seroter throwing a baseball outside Google HQ. The system grades him as a 'C', with breakdowns or his arm, balance, and stride & drive.

DiBattista notes that Gemini is capable of analyzing multiple frames at once to evaluate motion, rather than just snapshots. He stresses that he built the tool in just one week, with no need to build a custom model or handle complex data sets.

Gemini can see and make sense of information that isn't apparent to the human eye, says Wong, showing a video of her basketball throw as an example. She adds that a team of developers recently produced an AI commentator for sport and that X Games is interested in using AI for judging.

We're moving on to learning about data agents, Google Cloud's tools for easily analyzing data.

Here to explain is Jeff Nelson, developer advocate at Google Cloud. Nelson starts with Colab, where we'll be shown a demo of Google Cloud's new data science agent in action.

Within the Colab notebook, Nelson can ask the Gemini data science agent to generate a forecast based on his data.

The agent uses a new foundation model called TimesFM, which has been built specifically for forecasting, to produce a table with product IDs and dates, as well as a chart with sales over time.

To share the visualization with colleagues, Nelson can press a 'create data app' button to quickly generate a link to the interactive forecast.

Rounding us out, we're welcoming Scott Densmore, senior director, Engineering, Code Assist at Google Cloud, to demo a sneak peek at Google Cloud's software engineering agent.

Densmore shows us the Gemini Code Assist Kanban Board, which includes something Google Cloud calls a 'backpack' – which contains all context for code, security policies, formats, and even previous feedback.

When a developer notices a bug, they can tag Code Assist directly in their messaging app, or add a comment within their bug tracker.

Within the Kanban Board, Densmore can ask Code Assist to add code for specific features. If another team member has changed code and broken something – in this case, Densmore uses Seroter as a negative example – Code Assist can flag the changes to make a fix.

And with that, we've finished the developer keynote! You can refer back to the rest of this blog for all the latest and stay tuned on the ITPro site for more coverage from Google Cloud Next 2025.

To catch up on some of the news from the past week, check out our ITPro Podcast episode on the conference here.

Google Cloud Next 2025 is imminent, with Google Cloud poised to unveil a slew of new cloud, AI, security, and channel announcements to a small army of Las Vegas attendees.

You don’t have to try very hard to guess what the focus of Google Cloud Next 2025 will be: like every other tech conference for the past two years, it will pivot around generative AI. As a proudly AI-first company since 2017, Google has more cause than many others to focus so heavily on the technology.

Though it initially lagged behind in generative AI, with its ‘Bard’ false-start and subsequent Gemini rebrand, Google Cloud has made up the gap since and last year I argued the firm was finally embracing its AI potential.

To build on these gains in 2025, Google Cloud needs to move away from the rat race of small model or tool improvements and produce a convincing argument for organizations to choose GCP as the platform for enterprise AI.

Focusing on Google’s X-factor

The title of this year’s opening keynote is identical to last year’s: ‘The new way to cloud’. In 2024 I suggested this could refer to Google’s tight focus on its AI offerings, to set itself apart from its hyperscaler competitors. The decision to reuse it for 2025 implies that it’s becoming something of a mantra for Google Cloud, promising customers a uniformly ‘new’ approach to every aspect of using their cloud platforms.

At last year’s conference, attendees were treated to a barrage of AI announcements including a massive expansion of AI Agents within Vertex AI and the launch of Gemini Code Assist, its AI pair programmer.

Google Cloud could storm into this year’s event with Gemini 2.5 Pro Experimental – its new flagship multimodal model – and claim victory over its rivals on a simple level of performance. It’s more likely to instead focus on all the services that the model will power, however, and use it as an opportunity to show how its infrastructure and platform work together to produce value for customers.

Unlike rivals Microsoft Azure and Amazon Web Services (AWS), Google Cloud has rested almost entirely on internal solutions to deliver AI services. Its internal family of Gemini AI models is trained on its own AI infrastructure, largely made up of tensor processing units (TPUs).

There’s some home pride to shout about here and the significance of Google including DeepMind R1 on the benchmarking table for Gemini 2.5 Pro Experimental was not lost on me. Threatened by an open source upstart, Google Cloud has worked to show it’s still in another league when it comes to frontier model creation.

Of course, Google Cloud wasn’t alone in taking Chinese rival DeepSeek as a serious issue to address. Silicon Valley as a whole was given a fright in January as consumers and businesses found the free-to-use model met a lot of their hopes for AI. Post DeepSeek, hyperscalers must prove their AI is worth paying for or move aside for the free alternative.

Google Cloud’s USP is not raw performance. Although Gemini 2.5 Pro Experimental now tops Hugging Face’s LLM chatbot leaderboard, it will always be able to do more as the engine underneath powerful cloud applications than it can as a user-controlled LLM.

Instead, there’s a story to be told here of a unified platform that offers everything businesses need to make the most of AI without any reliance on third-party offerings. All of this is to say Google Cloud could see real success this year by focusing more on the results and less on the delivery.

The benefits of a unified cloud feed directly into AI, security, and productivity for customers. With the right framing, Google Cloud can draw a direct line between the sophistication of its AI research and the ease with which customers can deploy and benefit from it.

I had the opportunity to attend Google Cloud’s recent London event at the Google DeepMind HQ in London, at which the company announced expanded offerings for UK enterprises including new data residency for agentic AI. At the event, Demis Hassabis, founder and CEO at Google DeepMind, explained that AI is not a silver bullet right now – but that in five to ten years, it will help to massively transform the world around us.

Hassabis’ realistic but optimistic delivery is likely to resonate with hopeful business leaders. It’s widely understood that 2025 is a ‘show your working’ year for AI across the industry, with businesses who have sown the seeds of their AI systems over the past two years now looking for any sign of shoots. Similarly, customers will be looking for cold numbers and reassuringly tangible use cases in the announcements made at Google Cloud Next.

I’ll be looking to see if Hassabis' tone is matched throughout the Vegas event. Perhaps reassuringly, the generative AI section of the conference microsite is offered under the header “Drive real world results” rather than the more hyperbolic phrases we’ve seen from AI developers in recent years.

Of course, the firm is certain to spend some time providing updates on its more experimental AI research, such as its new universal AI assistant Project Astra. Combining speech recognition and computer vision in a multimodal model may have transformative potential down the line – but it’s unlikely to make waves in business just yet.

Leave businesses wanting the brand

Annual conferences are complex events. Billed as a chance for the host company to unveil their latest and greatest innovations, in practice they end up becoming several events all at once – including a chance for customers to network, discuss what they’ve heard among themselves, and get a feel for the mood music.

Events like Google Cloud Next are also vital staging points for corporate strategy but not in the simple show-and-tell manner of a corporate keynote. The hosts know that everything they announce, say, and do will feed into how their customers think of them for the next 12 months and shape how confident stakeholders are in their business vision. It’s as much a chance for the com

Let me put it another way. Have you ever been to a live comedy night? At the end of the evening you walk away struggling to remember any one joke, but with strong feelings for the overall act – either positive or negative.

Google Cloud is looking for its customers to walk away from Google Cloud Next 2025 feeling great about their cloud provider. To do so, it’ll have to present a cohesive, well thought out message that convinces attendees even if they forget some of its individual announcements. As in comedy, delivery is everything.

Rory Bathgate will be covering Google Cloud Next live from Mandalay Bay, Las Vegas between 9-11 April. To stay up-to-date with the latest news and announcements from the conference, follow our live blog and subscribe to the ITPro newsletter.

Although most organizations have seen the light of the public cloud and the lift and shift gold rush has officially finished, they are now taking a more considered, pragmatic approach to their cloud strategy.

After a wide-scale migration to public cloud during the pandemic, many companies are now realizing that while it offers scalability, it can become expensive for mid-market companies particularly when handling large volumes of data and applications.

The variable pricing models used by public cloud providers makes it increasingly difficult for businesses to manage their cloud expenses, and this is just one among a litany of other concerns attached to operating on the public cloud.

Enterprises are also concerned with their cloud security, data privacy, real-time processing latency, vendor lock-in , cross-border data sovereignty, and their ability to customize their workloads.

At the same time, integrating existing on-premises systems and applications with public cloud infrastructure can be complex and resource-intensive, requiring a considerable investment in time and skills.

All these factors combine to make public cloud platforms less attractive for mid-level enterprises and is driving a rise in popularity for hybrid cloud – research found that increasing hybrid cloud development was the top priority for mid-market IT decision makers this year.

This approach allows companies to take the best from public cloud (ideal for handling fluctuating workloads), private cloud (dedicated infrastructure with enhanced security and control), and on-premises (traditional IT infrastructure located onsite).

This new appetite is starting to be reflected in the channel, here’s how MSPs can help in 2025.

The rise of hybrid cloud

Hybrid cloud offers the best of all worlds in an environment where data and applications move seamlessly between private and public clouds based on the organisation's needs.

It offers a huge advantage with the ability to scale resources up and down by using public cloud for extra capacity while maintaining critical workloads on private cloud or on-premises.

Hybrid cloud also helps businesses lower costs and enhance security by using the public cloud for non-sensitive data and workloads while keeping more sensitive or critical data on private infrastructure.

From a business continuity perspective, the hybrid approach provides robust disaster recovery options, ensuring critical data and applications are backed up and can be quickly restored if needed.

Perhaps most importantly, hybrid cloud distributes workloads based on performance requirements with latency-sensitive applications running on-premises or in a private cloud to ensure optimal performance. This leads to a better, more responsive and more productive user experience.

So, it seems for companies considering a move in 2025, hybrid cloud should be top of their agenda, however, selecting the right channel partner for the journey is a critical first step.

The role of MSPs

MSPs offer expert guidance when it comes to designing your hybrid cloud architecture, aligning it with specific corporate goals, identifying which applications, data, and workloads are suitable for the cloud, and developing a detailed migration plan. This will ensure a staged, seamless transition with minimal disruption.

Once the migration is complete, MSPs will continuously monitor and optimize the hybrid cloud environment to ensure peak performance and cost-efficiency. At the same time, MSPs offer proactive maintenance and support to address any issues or incidents that arise.

In the context of security and compliance, an area where public cloud can sometimes be found lacking, MSPs can help businesses implement stringent security measures to protect sensitive data across the hybrid cloud landscape.

They can also guarantee compliance with industry standards and regulations, such as NIS2, by deploying advanced encryption methods, secure access controls, and continuous monitoring systems.

When it comes to support and training, MSPs have a vital role to play, helping ensure employees are well-equipped to thrive within a hybrid environment. Whether it is on-site training with new tools and technologies, or ongoing technical support, MSPs have the existing skillset to offer everything a mid-market company, with limited internal resources, could need.

With the expertise and wide range of offerings, from private cloud to virtual data centres or Infrastructure as a Service (IaaS), MSPs can support customers on the next stage of their cloud journey, ensuring they get a higher quality service, at a lower cost, than many have experienced in the public cloud.

As the new year looms, organizations of all sizes will be thinking about their corporate IT strategy for 2025. All things considered, the time is right for MSPs to embrace hybrid cloud by offering customized solutions, and value-added services with a customer-centric approach. By focusing on these, MSPs can effectively build strong, lasting relationships with both existing and new customers into the new year and beyond.

MORE FROM ITPRO

• Turning the tide: the need for a digital detox in the wake of tech’s digital hangover
• The AI challenge for the channel
• How the channel can simplify cybersecurity to build trust and agility for SMBs

The rapid evolution of cloud computing has transformed the business landscape irrevocably. A recent study revealed that 46% of enterprises already use the public cloud, and an additional 8% plan to move more workloads to the cloud within 12 months. The trend is clear: cloud strategies are no longer just about cost savings – they’re fundamental to growth, innovation, and resilience.

Yet, as organizations increasingly adopt multi-cloud architectures to avoid vendor lock-in, optimize costs, and improve agility, they also encounter a range of complexities. For executives and leaders steering this shift, one key question remains: how do we enable seamless operations across multiple cloud platforms while ensuring scalability, security, and efficiency?

Multi-cloud as a strategic imperative

Multi-cloud DevOps is undeniably challenging, but with the right strategies, the single-cloud model has evolved into a multi-cloud strategy for most organizations. The benefits are undeniable – enhanced flexibility, reduced dependence on a single provider, and the ability to choose best-of-breed services for specific workloads.

The challenge, however, lies in execution. The lack of standardization is the Achilles’ heel of multi-cloud DevOps. Each hyperscaler brings its own tools, APIs, and processes, which can create operational silos and slow down the very agility these architectures aim to achieve. This is where the role of DevOps becomes pivotal. DevOps teams are the bridge between the promise of multi-cloud and its operational reality – but only if equipped with the right strategies and tools.

To address this, adopting infrastructure as code (IaC) solutions is essential. IaC allows teams to define and manage infrastructure programmatically, creating a consistent operational language across different clouds. This accelerates deployment cycles, reduces human error, and ensures repeatability. For example, with tools like Terraform or Pulumi, DevOps teams can create a common operational language, ensuring that processes run seamlessly across all platforms. This approach streamlines deployments and reduces human error, a common risk in manual configurations.

Additionally, containerization technologies like Docker and orchestration platforms such as Kubernetes play a critical role in creating a unified operational framework. These tools abstract the underlying infrastructure, enabling teams to deploy, scale, and manage applications consistently, regardless of the cloud provider.

Organizations that invest in these technologies are better positioned to tackle multi-cloud complexities head-on.

The role of automation in multi-cloud

Automation has always been a cornerstone of DevOps, but traditional automation techniques often fall short. This is where AI/ML is proving transformative. For instance, AI-powered monitoring tools can detect anomalies in real-time, suggest pre-emptive fixes, and even automate recovery processes, minimizing downtime and mitigating risks. Moreover, AI can automate labor-intensive tasks like generating test cases, writing documentation, and managing compliance requirements. This frees up DevOps engineers to focus on innovation rather than routine operational tasks.

The integration of AI into DevOps workflows is no longer optional – it’s essential. Many organizations leveraging AI to optimise their CI/CD pipelines have reported significant improvements in deployment speed, quality, and team productivity. These gains highlight the transformative potential of AI in overcoming the operational challenges of multi-cloud environments.

Security and compliance in a multi-cloud world

Security and compliance are among the most pressing concerns for any organisation adopting a multi-cloud strategy. Each cloud provider has unique compliance requirements, and managing these across multiple platforms can be tough. A fragmented approach to security can leave organizations vulnerable to data breaches and regulatory penalties.

The solution lies in adopting a DevSecOps model, which integrates security directly into the CI/CD pipeline. By embedding security checks at every stage of the development lifecycle, teams can identify and mitigate vulnerabilities early, ensuring that applications are secure before they are deployed.

Cross-cloud security frameworks and automated security protocols are also critical. These tools allow organizations to enforce consistent security policies across all platforms, reducing the risk of misconfigurations and compliance violations.

The shift from reactive to proactive security is one of the most significant developments in multi-cloud DevOps. By implementing security measures that are integrated, automated, and scalable, organizations can achieve the agility they need without compromising on integrity or compliance.

Fostering collaboration across teams

Multi-cloud DevOps isn’t just a technical challenge; it’s a cultural one. The need for close collaboration among diverse teams – developers, operations, security experts, cloud architects, and data scientists – is greater than ever. Without an environment that promotes shared learning and collaboration, even the most advanced tools and processes will fall short.

Fostering a culture of continuous learning is essential. Regular training sessions on multi-cloud best practices, hands-on workshops with emerging tools, and cross-functional team engagements can help bridge knowledge gaps. For example, hosting hackathons or innovation days focused on multi-cloud challenges can inspire creative solutions while encouraging collaboration.

Organizations must also invest in platforms that facilitate knowledge sharing and transparency. These can help streamline communication and keep everyone aligned on project goals and progress.

The future of DevOps in multi-cloud

The future of DevOps in multi-cloud environments will be shaped by AI-driven autonomy. Generative AI has the potential to go beyond automating routine tasks to support strategic decision-making. Imagine an AI system that generates deployment-ready code, provides predictive insights into potential risks, and even recommends adjustments to project roadmaps based on real-time data.

While this vision may seem futuristic, it’s closer than many realise. Forward-thinking organizations are already laying the groundwork for these capabilities by investing in AI research and development. Those who act now will be at the forefront of this next wave of innovation, gaining a significant competitive advantage in the process.

The journey to mastering multi-cloud DevOps is both complex and transformative. It requires more than just technological prowess; it demands a mindset shift, a commitment to continuous innovation, and a relentless focus on creating value. Organizations that succeed in this new era won’t just adapt to multi-cloud environments – they will harness their full potential to reimagine what’s possible and set the pace for the future of digital transformation.

Public cloud spending is rocketing, according to IDC, as enterprises continue to invest in infrastructure expansion and ramp up AI adoption.

Figures from the consultancy’s Worldwide Semiannual Public Cloud Services Tracker show total global revenue in the public cloud services market hit $669.2 billion in 2023, marking a 19.9% increase on the year previous.

The biggest single contributor was Software as a Service (SaaS) spending IDC noted, which accounted for nearly 45% of the total.

Infrastructure as a Service (IaaS) was the second largest category, with 19.9% of the total, while Platform as a Service (PaaS) spending accounted for 18.4% of overall revenue.

PaaS spending experienced some of the fastest year-over-year revenue growth across 2023, which was partly fueled by heightened investment in AI, according to IDC's Adam Reeves.

"In large part due to end-user investment in AI, PaaS revenue growth continues to outpace the overall cloud market,” he said.

"Both market share-leading vendors and smaller providers continue to release PaaS-delivered AI offerings. Vendors are focused on being strategic partners to their customers by delivering highly performant, developer-friendly, trustworthy, and secure offerings that help users deliver intelligent applications more efficiently."

All the same names dominate the public cloud market

As in previous years, the market last year was dominated by the top five public cloud service providers – Microsoft, AWS, Salesforce, Google, and Oracle – which between them accounted for 40.5% of the worldwide total.

With offerings in all four public cloud categories, Microsoft held the top spot, with a 16.8% share in 2023, followed by AWS with a 12.4% market share.

IDC said the market is likely to continue to expand moving forward. Worldwide public cloud services revenue will top $800 billion this year, it predicts, up 20.5% over 2023, and with a similar increase expected in 2025.

Overall, the consultancy said there's likely to be a five-year compound annual growth rate of 19.5% with worldwide revenues reaching $1.6 trillion in 2028.

The main driver for all this growth is the shift of AI into the mainstream, which is pushing organizations to rethink their infrastructure strategy, according to Dave McCarthy, IDC's research vice president, cloud and edge infrastructure services.

"Public cloud IaaS will be an attractive source for AI-ready infrastructure as cloud service providers are heavily investing in the high-performance compute, storage, and networking services needed for AI workloads," he commented.

"The on-demand and pay-as-you-go tenets of cloud infrastructure facilitate access to the latest AI technology without large upfront investments or supply chain delays."

April has been a month of both highs and lows. At the start of the month, AWS was ordered to pay $525 million in damages, after it was found to have infringed US patent law through some of its core cloud offerings.

The month has also seen a high-profile cyber incident – a ransomware attack against Change Healthcare in which personal information was stolen.

All of this has unfolded against the backdrop of more innovation in the AI space, with the launch of Llama 3 and news from Google Cloud Next having buoyed market interest.

In this episode, Jane and Rory speak once again to Ross Kelly, ITPro’s news and analysis editor, to explore some of the month’s most notable news items.

Highlights

“Analysis of the attack suggests that this RansomHub group is a collective of affiliates from ALPHV/BlackCat, who have waged a second attack against Change Healthcare because they weren't paid out from the original attack.”

“It's one of these debates that pops up every now and again in the cybersecurity industry, on whether to pay or whether or not to pay.”

“[Llama 3] comes in two parameter sizes, 8B and 70B. Now, what's significant about this is that it appears to outperform models of a similar size, so Google's Gemma 7B and Gemini Pro 1.0, Mistral’s 7B model as well. In between all the hype and hyperbole around the latest large language models on the market, I think Meta’s kind of going about its work very calmly.”

Footnotes

• AWS fined $525 million after US court rules Amazon S3 storage, DynamoDB services infringed patents
• Change Healthcare hit with second ransomware attack of 2024
• UnitedHealth Group admits to paying ransom after Change Healthcare cyber attack
• The end of ransomware payments: How businesses fit into the fight
• A ransomware payments ban risks criminalizing victims
• UK CISO’s are cowing to ransomware demands more than you think, here’s why they shouldn’t pay up
• Everything we know so far about the rumored ALPHV 'takedown'
• ALPHV leak site seized by law enforcement as decryption tool released
• Citrix vulnerability behind Change Healthcare cyber attack, CEO claims
• Meta's Llama 3 will force OpenAI and other AI giants to up their game
• Just how open are the leading open source AI models?

Subscribe 

• Subscribe to The ITPro Podcast on Apple Podcasts
• Subscribe to The ITPro Podcast on Spotify
• Subscribe to the ITPro newsletter
• Join us on LinkedIn

AWS re:Invent 2023 offered an opportunity for the cloud giant to showcase its ambitious plans to combat industry competitors such as Microsoft in the age of generative AI. Instead, it chose to poke fun at them. 

CEO Adam Selipsky fired a cheeky broadside at Microsoft during his opening day keynote address, suggesting that flexibility, security, and stability were front of mind for AWS amidst a period of sharp focus on generative AI development. That same focus, he implied, might not be applicable at Microsoft.

Referring to Amazon Bedrock, the firm’s foundation model framework around which the company is pinning much of its hopes, Selipsky suggested that a monolithic approach to AI innovation appears flawed.

“You don’t want a cloud provider who’s beholden to one model provider,” he claimed. “The events of the last 10 days have made that very clear.”

Amazon bedrock offers customers access to a range of both in-house and third-party models, including those from Meta, Anthropic, and Cohere. So far, the approach has proven lucrative for AWS and enabled the firm to differentiate itself from competitors. Selipsky also took a shot at Microsoft’s chip ambitions off the back of news that AWS plans to expand its relationship with Nvidia to develop a new Trainium chip. 

“A lot of other cloud providers are still just talking about their own AI chips,” he said.

But while the digs at Microsoft made for a few laughs in the keynote theater, it perhaps points toward a degree of insecurity at AWS on the generative AI front, an area in which the cloud giant has been relatively late to the party. 

The sheer volume of new service and product announcements across the three-day conference does point toward a robust roadmap for AWS over the next 12 months, that much is clear. And generative AI, with the transformative potential it offers, naturally holds pride of place in the center of it all and is underpinned by Amazon Bedrock.

Sometimes, however, less is more. For journalists like yours truly reporting live from the three keynote sessions, the incessant and seemingly never-ending cacophony of announcements created the perfect conditions for both carpal tunnel syndrome and a sense of mild confusion over what exactly AWS is directing its focus toward. 

Selipsky outlined how the company plans to support generative AI development across all levels of its product portfolio, from the basic infrastructure upward, but perhaps unsurprisingly, it’s decided to jump on the AI assistant bandwagon, following suit from Microsoft and Google’s lead in this regard. 

Amazon Q, the firm’s newly announced AI assistant, offers a glimpse into how AWS plans to contend with industry counterparts. Make no mistake, Amazon Q does make for a compelling argument that customers will be in safe hands with AWS, with the powerful chatbot integrated across virtually every facet of the firm’s core product offerings. 

“Vertical integration” of Amazon Q, as IDC analyst Neil Ward-Dutton put it, represents a key differentiator for AWS in this regard. But nonetheless, AWS is still late to the game, and Microsoft has been warming up for months. 

Catching Microsoft’s lead

Microsoft struck an early lead in the generative AI race in November 2022 through its close relationship with OpenAI, the – admittedly somewhat beleaguered of late – tech darling behind ChatGPT. 

The tech giant has poured billions into OpenAI, enabling it to rapidly integrate generative AI tools throughout its core product offerings. The firm’s ‘Copilot’ tool has proven highly popular among customers to date, who now have access to a Copilot tool for Microsoft 365, Windows 11, and Windows 10.

Its Security Copilot has also proven a hit thus far. Similarly, the Azure OpenAI service, which allows cloud customers to leverage the power of GPT-4 to streamline development processes and reduce developer burden, has been a resounding success. 

The degree to which Microsoft has integrated OpenAI-based tools shows it’s beginning to mature in its own generative AI journey, and this is already paying dividends. In October, earnings calls at Microsoft demonstrated how lucrative generative AI has become for the firm. Revenue in its Intelligent Cloud unit surged by 19% across the previous quarter.

Research and development spending across the quarter also dipped, highlighting the fact that OpenAI may be doing much of the heavy lifting in this area while Microsoft reaps the rewards. 

For AWS, this poses a problem. Microsoft is the second largest cloud service provider globally, and if AWS isn’t careful, it could soon be breathing up its neck. For years, AWS has held its position as the dominant provider in the global cloud computing space, with Q3 statistics showing it held a market share of roughly 32%. 

This has remained relatively stable in recent years, fluctuating slightly between 34% and 32%. But revenue growth across Q3 2023 stood at 12%, marking a stark contrast to the highs experienced during the highs of the pandemic. 

Compare this to Microsoft, and it’s obvious that some gains are being made by the Redmond tech giant. Q3 saw Microsoft expand its market share to 23%, marking a 2% increase over the same period in 2022 and highlighting that the firm has continually been gaining market share from 2017 onward.

Data from Statista shows Microsoft has grown from just a 13.7% market share in Q4 2017 to its current level. Microsoft revenue stats for Q3 2023 are equally impressive, with the Intelligent Cloud group generating $24.3 billion in sales - a growth rate of 19% year-on-year. Operating income across the period also far exceeded AWS and Google Cloud, with the firm recording $11.7 billion. 

A battle between hyperscalers

Microsoft may not catch AWS any time soon, but there are signs the firm is slowly chipping away as it targets a future run-in with its long-time competitor. This perhaps explains why AWS is so eager to capitalize on recent disruption and poke fun at its little brother in the cloud computing space. But little brothers don’t stay ‘little’ for long. 

There’s no denying that last month’s OpenAI fiasco was an embarrassing - and outright confusing - debacle that Microsoft will be keen to see the back of. However, there are no signs of a pending customer exodus as a result of this and, if anything, it emerged from the affair better off. 

Oracle was long the butt of the joke at AWS conferences, and Amazon CTO Dr Werner Vogels seized the opportunity to once again jest at the firm’s expense during his keynote on day three at re:Invent. 

But where Oracle couldn’t compete, Microsoft certainly appears ready. AWS may realize it needs to face up to a pending battle in the coming years. 

Ten days out from AWS re:Invent 2023, the generative AI space erupted into near anarchy. OpenAI, the developer behind ChatGPT and the poster child of the AI ‘boom’ over the last year, sent shockwaves throughout the industry with its abrupt sacking of CEO Sam Altman. 

Five days of absolute chaos ensued in which Altman joined Microsoft, staff at the firm revolted, and then the aforementioned chief exec made a triumphant return. 

This disruption, while captivating and confusing in equal measure for an outside observer, highlights the precarious condition of the industry as it emerges from an embryonic stage to begin truly delivering impactful outcomes for businesses globally. 

But while industry stakeholders such as OpenAI and Microsoft are mired in chaos and controversy, AWS re:Invent offers a prime opportunity for the cloud computing giant to solidify its status as a ‘steady hand’ for customers worldwide. 

As the largest of the three hyperscaler cloud providers, AWS clearly has the maturity and financial clout to position itself as the go-to cloud service for companies dabbling in generative AI in the coming months and years. 

And at re:Invent, we can expect the firm to come out guns blazing. re:Invent truly is a behemoth of a conference, much like AWS itself is one in the context of the global cloud computing industry. 

Tens of thousands of AWS customers and partners will descend on Las Vegas next week to participate in the flagship conference, and many will be eager to learn how AWS plans to both continue driving its industry-leading cloud offerings as well as its approach to generative AI innovation. 

Amazon Bedrock is certain to be a key talking point in this future-facing strategy. 

AWS’ big bet on Bedrock

AWS has made no secret of its efforts to position itself as the go-to cloud provider for generative AI innovation among businesses globally. The launch of Amazon Bedrock, a hosting framework for both in-house and third-party foundation models, has been a roaring success since its launch in April 2023. 

In July, Swami Sivasubramanian, VP for database, analytics, and machine learning at the cloud giant, revealed Bedrock had drawn “thousands of customers” since its launch, underlining the popularity of the framework. 

Bedrock has matured rapidly since its inception earlier this year. Initially, customers were given access to Amazon’s own family of Titan foundation models alongside third-party models from AI21 Labs, Cohere, Stability AI, and Anthropic’s Claude chatbot. 

In September though, the firm announced the inclusion of Meta’s open source Llama 2 in Bedrock in a bold move that made it the first to provide the LLM via an API.

It’s likely that AWS will bang the drum over Bedrock throughout re:Invent, and the possibility of additional model announcements could be on the horizon. 

But flashy news bite announcements aside, AWS has a genuine opportunity to pull away from the pack with Bedrock as we near the end of 2023. 

In launching the framework, the tech giant isn’t just providing a platform through which customers can access generative AI models, it’s essentially creating an ecosystem that draws upon partner expertise to accommodate for a varied range of customers. 

Add to this the fact that Amazon is reportedly working on its own two trillion-parameter large language model, dubbed ‘Amazon Olympus’, and the stage could be set for a showdown with Microsoft-backed OpenAI in 2024. 

Industry collaboration

AWS’ approach to AI innovation has been one centered around cross-collaborative efforts with industry stakeholders, particularly high-growth startups operating in the AI space. 

Earlier this year, AWS announced a collaboration with Hugging Face to accelerate the training, fine-tuning, and deployment of large language and vision models used in the creation of generative AI applications. 

By drawing on the expertise of these companies and simultaneously positioning itself as a primary cloud provider, AWS is able to reap the combined benefits of these relationships. 

This approach has proven invaluable so far. Last year, Stability AI selected AWS as its preferred cloud provider while Anthropic did the same as part of a landmark investment deal in September. 

It’s clear that these “strategic partnerships”, as AWS dubbed the Anthropic deal, will continue to be critical in how the tech giant approaches its AI strategy moving forward. 

ITPro's Ross Kelly will be covering AWS re:Invent 2023 live from Las Vegas between 27 - 30 November. To stay up-to-date with the latest news and announcements from the conference, follow our live blog and subscribe to our newsletter below.

NetApp made no secret of its deep, long-standing relationships with hyperscaler cloud providers during its recent Insight conference. And it may be a silver bullet for the company long-term. The storage firm’s annual event, held in Las Vegas this week, offered a prime opportunity to differentiate itself from competitors amidst an exciting period of industry evolution. 

Critically, NetApp was keen to position itself as holding a unique position within the storage industry due to its roots with hyperscalers. After all, it’s the only provider offering its services natively on AWS, Google Cloud, and Microsoft Azure. 

This deep integration includes – but isn’t limited to – Vertex AI support for Google Cloud NetApp Volumes, creating a seamless data pipeline for customers operating with both NetApp and Google Cloud services. Its ties with AWS and Microsoft Azure run equally deep and appear to underline the firm’s status as the go-to storage provider for firms seeking a blend of on-prem and public cloud storage.

Building a hybrid multi-cloud haven 

Harv Bhela, chief product officer at NetApp told delegates that is a truly unique arrangement and that hyperscalers “don’t do this with anyone else”. 

“I’m hearing from some of our competitors that they have cloud offerings too, but it only took them ten years after use to recognize that customers need storage in the cloud and on-prem,” he boldly declared during a keynote. 

The extent of these ties means the firm is creating what can only be described as a hybrid multi-cloud haven for customers. The shift to hybrid cloud is growing, and no-one is better placed to capitalize on this evolution, NetApp believes. 

Research from Google in 2022 revealed 48% of tech leaders were operating under a “mostly hybrid” framework compared to just 40% in 2020. A survey from Parallels this month also found that nearly two-thirds (64%) of respondents had implemented a hybrid cloud approach, with 38% expecting to pursue the practice within the next year.

With this shift to hybrid and multi-cloud, it’s clear NetApp aims to position itself as the middleman offering customers new-found levels of flexibility and scalability as their cloud journeys mature. NetApp has been vocally bullish on the benefits of hybrid cloud for several years now, and this ongoing shift represents the culmination of a decades’ worth of championing the idea.

CEO George Kurian told journalists the firm has “always believed the world will be hybrid and multi-cloud”, and based on current trends, their prediction certainly appears to be coming to fruition.

“Customers will have environments in which they manage themselves for certain classes of applications and for others, there’s public cloud,” he said. “We said that in 2013, and we still believe that today. If you talk to an average large corporation, they have about 25-30% of their workloads running on public cloud. What we do uniquely is give the customer the flexibility to make that choice without compromise.”.

Hybrid cloud is the perfect fit for AI innovation

Generative AI has absolutely dominated agendas at tech industry conferences this year, and understandably. While the saturation of AI-related content is becoming somewhat predictable, NetApp avoided the regurgitation of the hype and hyperbole in this instance. 

NetApp appears happy to let customers and other industry players scream from the rafters about the technology, and instead focus on the underlying infrastructure that will support this revolution. And hybrid multi-cloud will be the silver bullet for the firm. Kurian told ITPro that hybrid is a match made in heaven for firms exploring the use of generative AI tools and services and that NetApp wants to become the “pipeline” for the data which underpins AI innovation. 

While businesses developing generative AI tools will naturally flock to public cloud, the firm predicts that the maturation of the space, combined with concerns over the security of internal company data sources, means models will ultimately be held on-prem.

This is a trend NetApp seems keen to capitalize on in coming months and years by framing its storage services as the go-to for customers. And running parallel to this is the integration the firm has with existing hyperscale cloud providers. Essentially, NetApp seems eager to position itself on an island in the middle of a generative AI, hybrid cloud-fuelled confluence of trends.

The relatively nascent cloud computing industry entered a slowdown in its meteoric growth this year. As it begins to mature, it now encounters a major challenge in the form of how best to integrate artificial intelligence (AI)-optimized hardware, software, and semiconductor chips. 

The ‘big three’ public cloud services – Microsoft Azure, Google Cloud Platform (GCP), and market leader Amazon Web Services (AWS) – may face an existential crisis with the rise of generative AI and the hardware needed to power large language models (LLMs) and other workloads.

Out of these three, AWS is especially vulnerable to losing market share, according to the experts, with another company – Nvidia – holding all the cards.

With its hold on the AI hardware segment, Nvidia is moving quickly to shore up its leverage by deepening partnerships with major cloud providers, apart from one: AWS. This could work to shake up a public cloud market which we had assumed was set.

AWS skips the Nvidia AI party… but at what cost?

Public cloud market leader AWS depended on a four-part approach to create and dominate the public cloud market. This plan included:

• Creating infrastructure according to popularity / demand for services
• Leveraging first-mover advantage
• Making silicon in-house, save billions of dollars
• Controling product end-to-end

This four-part formula served AWS well, says Dylan Patel, chief analyst at SemiAnalysis, but with the advent of AI, another cloud leader emerged. Nvidia, the semiconductor chip designer of choice for high-performance computing (HPC), LLM training and inference, now competes against the companies it also partners with. 

“Nvidia has big ambitions in AI,” says Jay Goldberg, CEO of technology and finance consulting firm D2D Advisory. “It wants to move beyond only selling semiconductors to providing a complete AI solution to end-customers. This includes providing extensive software tools and even its own cloud service.”

“We are witnessing an intense competition among these cloud providers to capitalize on the significant revenue opportunities presented by the thriving AI applications,” adds Sameh Boujelbene, VP of data center and campus ethernet switch market research at Dell’Oro Group. “Nvidia is seizing this pivotal moment in the market to leverage its dominance in AI hardware and generate revenue from cloud-based software solutions.

“Nvidia made early investments in AI and deep learning, recognizing their potential long before they became mainstream,” Boujelbene adds. “This head start allowed it to develop and refine its technology to cater specifically to AI applications.”

Networking is key to Nvidia’s cloud ambitions

AWS has resisted this push, and its approach to Nvidia could close the gap between it and its major competitors Azure and GCP. The service of which Goldberg and Boujelbene speak is Nvidia’s AI as a service offering, Nvidia AI. It gives customers access to the power of a supercomputer to train LLM, develop AI inference models, and monitor data. 

“So far, Nvidia has been careful to position its cloud computing ambitions in partnership with the public cloud providers,” says Goldberg. “Beyond this, Nvidia's dominant position in AI semiconductors and limited supplies has allowed it to ration allocation of those chips.”

AWS is left out, says Patel, because it refuses to leverage Nvidia’s networking product NVLink. Leveraging the tool would give Nvidia too much control, in the eyes of AWS, Patel tells ITPro. 

Networking remains a critical piece of Nvidia’s full-stack solution, according to Boujelbene. In addition to NVLink, Boujelbene points out the firm’s InfiniBand and Ethernet offerings. The H100s can reach 3.5 times their normal performance when using NVLink between GPU nodes, Nvidia claims. He notes AWS isn’t the only one cautious about integrating NVLink.

But, Patel warns, once Nvidia’s much anticipated GH200 Grace Hopper chip arrives, the firm will most likely make NVLink mandatory for other companies to gain access to the chip’s power and performance. Patel has inferred this from Nvidia’s product announcement, in which it all but came out and said NVLink is needed to get the most out of its tools.

How Nvidia is directly challenging cloud providers

Nvidia is using its popular H100 chips as leverage by prioritizing Azure, GCP, and smaller players such as Coreweave, Equinix, and Lambda to receive the first available shipments of the in-demand H100s. By doing so, the firm is folding cloud providers into its cloud ambitions, and AWS sticks out like a sore thumb because it won’t play ball, Patel says.

The demand for H100s comes from the chip’s raw speed in both inference and LLM training. Even with Nvidia’s price spikes, H100s still provide the best performance per dollar from any of the latest GPUs.

AWS occupies an almost too-big-to-fail position in the market, and it can certainly afford stick to its principles and remain in control, but this puts it in the rare position of playing catchup. “Nvidia is the leading provider of GPUs and AI accelerated compute for the cloud services providers,” says Goldberg. “They rely on Nvidia for providing the best GPUs, along with the CUDA software tools, which power the training of AI models.”

To compete, AWS developed its own inference and training software called Trainium and Inferentia, Patel adds. But they’re below standard capabilities, they’re struggling to gain traction in the market, and aren’t competitive after offering steep discounts. 

Nvidia is assuming the role of gatekeeper for the ‘big three’ cloud service providers in this AI age. The firm uses its software – CUDA – and hardware – H100 and GH200 – to retain partnerships and pressure holdouts.

Nvidia also struck partnerships with Microsoft, Oracle, Google, and minor players to roll out a lower-margin DGX as a service operation. This gives customers access to Nvidia’s latest suite of cloud-ready systems without needing hardware. According to Patel, AWS is the only major cloud provider not offering Nvidia’s AI as a service model, jeapordizing its position as the market leader.

Many organizations succeed at deploying resources in or migrating to Microsoft Azure, but many of those same organizations fail to ensure Azure adoption. Why? It could be losing cost control, a failure to learn lessons along the way, and an absence of informed leadership. 

While the simplest way to adopt Azure is starting from scratch – such as a startup deploying workloads for the first time – it’s more common for a mature organization to decide to enter the cloud with new (cloud-only or hybrid) workloads only.

Often, this is a migration project. Here, the organization takes existing workloads and moves them into the cloud using one of the six Rs of cloud migration: rehost, re-platform, repurchase, refactor, retain, and retain. The movement of these workloads is what we call a cloud migration.

A group of well-informed engineers or consultants can perform such a migration quite successfully and hand over the result to the IT department. That’s great, but cloud adoption is something that can only be measured after a migration has happened. 

Adoption is when the business has evolved:

• The tools that are used are cloud-native instead of being built around on-premises servers
• Processes have changed to adapt to the agility of the cloud
• Skills have been upgraded
• The divisions between the business and the pillars of IT delivery have been broken down

Unfortunately, the above changes rarely take place on the first, second, and sometimes even the third attempt at a cloud migration. The end result? An organization feels that the cloud can’t deliver on the marketed promises. It can take a year, or even two, but eventually, most organizations will realize that adoption has failed.

Relying on informed leadership

Consider what a cloud migration project looks like. The head of IT, either a technical IT manager or a business person who accidentally became the head of IT, makes the call to move to the cloud. Perhaps the business owner ordered it for some reason, or an outsourcing/hosting contract is ending, or maybe a physical/software infrastructure is approaching end-of-life.

In such cases, the person in charge is usually given a fixed budget or timeline and, on paper, the migration project is pretty simple: build something as similar to on-premises as possible and move the workloads and data. The result is a bunch of virtual machines (VMs), operated in the exact same way as the old workloads were hosted on before. 

The IT manager and the people who report to them are focused on technology; changes to people, processes, and organization are neither high on their agenda nor within their remit. If IT is leading a cloud journey then one should expect little to change, other than the location of where the workloads is hosted.

However, this is lazy thinking. I strongly advise anyone involved to read through the Microsoft Cloud Adoption Framework. AWS and GCP have their own versions. This explains that a cloud journey should start with the leadership. 

The motivations of the business must be understood and documented as part of a cloud strategy. That cloud strategy will document exactly how the organization is going to change while it enters the cloud. 

Such a document requires the leadership to have taken the time to understand what the cloud is and what it can offer – and it must be more than “we’re going to the cloud”. Your strategy must then be communicated to everyone to say changes are happening to the organization, processes, tools, and skills.

The skills and knowledge for a cloud migration

Now, as always, there’s a skills shortage in the IT industry, but it’s never seemed so extreme as now. Many organisations are taking a plunge into the deep end of the cloud and they need people with the right skills and knowledge to help. 

Cloud-specific knowledge is vital to any successful adoption. Knowledge of traditional systems is useful, but new skills are required. The trouble is that a migration is usually done by a select few: either consultants or an elite internal “cloud team”. The IT staff that run things on a day-to-day basis are often left out of the entire process: 

• Decide what processes will be used to deliver IT services to the organisation
• Determine how IT staff should be reorganized to break down rigid processes and failures of the past
• Identify the tools that must be used to support the new processes and IT organization
• Calculate the skills gaps between staff and their new roles and immediately organize training

Then, someone will say “we should schedule a handover”. The migration team will perform a series of presentations over a series of meetings and the IT team is given the keys of a rocket ship when all it’s ever driven before was a small car. The cloud adoption framework shows how changes should be brought to the organization before anything is deployed into the cloud.

An informed IT department will be an asset in the cloud migration project. More staff are now available to work on the project. Trained staff can provide better information to the migration team and be participants instead of remote observers. When the migration is complete, the trained staff are familiar with what is being deployed and will be ready to adopt it.

Why legacy IT may seem cheaper than the cloud

When an organization enters the cloud, its top three concerns are often hitting the deadline, security, and compliance. Then something happens post-migration: the person who signs the cheques starts noticing detailed monthly invoices from something called Microsoft Azure and they get a serious case of sticker shock.

The organization doesn’t understand what the cost of legacy IT is. Every three to ten years, there’s a big server purchase. Some hardware and software are acquired for a cost and as far as IT is concerned, that’s the cost of running those workloads. The space that the computer room consumes, the cost of electricity, the price of cooling systems, all that other stuff is someone else’s problem. The cost of IT is simple: some tin from Dell, Lenovo, or HPE, and software.

Once you enter the cloud, things change to a consumption model: the more you use, the more you pay. The inverse holds true too. That cost is invoiced every month, so the cost of workloads in Azure is visible very quickly. However, the cost includes the cost of everything that enables “VM in the cloud” plus the margin for Microsoft to keep the shareholders happy.

The true cost of IT is much higher than some tin and some software. This is why cost management replaces the aforementioned concerns after a cloud migration. The fear of never-seen-before costs can prevent adoption and “cloud repatriation” has emerged to describe the reversal of cloud migration, primarily because of the lack of cost management.

Azure includes cost management features to observe, manage and even reduce costs. The most important tool to learn and use is Azure Cost Management, which lets you observe the costs of resources in your tenant, subscriptions, or resource groups. Coupled with publicly available pricing documentation, you can understand how Azure usage creates the invoice that you get from Microsoft. Reports can be generated. Budgets can be set. Alerts can be set up when budgets are exceeded or when a budget is forecast to be exceeded in the current billing month.

The cloud is a self-service environment. Operators and developers can deploy whatever they want; self-service is essential to deliver on the promise of agility. But a common failure is to “ban” self-service – shadow IT will return and the bills will sneak in another way, along with security and compliance issues. A better way is to control self-service through IT governance. 

The primary tool to enforce governance is Azure Policy. Policy initiatives can be created and assigned to control what can be done. For example, one can block expensive resources, enabling overrides when the business requires them.

Keeping cloud costs under control

So, how can you reduce costs? Start with cloud-native architectures. Traditional IT deploys a few big VMs or even just one huge VMs for big workloads. The cloud implements elasticity by deploying auto-scaled collections of smaller compute instances. When activity increases, the number and cost of instances increase. When activity decreases, the number and cost of instances decrease. Cloud-native architectures aren’t for every workload – some recoding will be required and that’s not possible for old or off-the-shelf software.

Then there’s appropriate sizing. It’s amazing how many oversized compute resources one finds when performing an assessment for a cloud migration project. Once a resource is in the cloud, Azure Monitor can be used to analyze the resource over time. If there is waste then the resource can be reduced in size, resulting in lower costs.

Also, consider reserved instances. Several resource types offer a discount if you commit to using a resource for one year or three years. The discount varies, depending on the time commitment and the size of the resource. Finally, some on-premises software, such as Windows Server/SQL Server with Software Assurance, can be redeployed to Microsoft Azure to remove the cost of the same software in the cloud. 

Cloud adoption happens after the migration completes; it’s a commitment by the business to stick with this new platform and to start consuming new types of services to build workloads. Process, tooling, skills, and organization change to remove the friction of traditional IT and to deliver on the agility promise of the cloud. However, if a cloud journey doesn’t tackle some key challenges, adoption will fail and the same uninformed leadership will start to ask some very tough questions before they start to make some staffing changes.

Google has accused Microsoft of anti-competitive practices in its cloud business in a scathing letter to US regulators examining the state of the industry. 

Responding to a call for testimony from the Federal Trade Commission (FTC), which is examining competition in the US cloud market, Google claimed that Microsoft imposes inhibitive license terms on customers to “lock in clients”. 

The letter from Google specifically targeted Microsoft, as well as other industry players such as Oracle, for alleged anti-competitive behaviors, which it said is harming both customers and the broader industry landscape. 

In particular, Google argued that Microsoft leverages the dominant position of Microsoft Office and Windows Server product lines, dubbing it a “complex web” that has created a difficult operating space for organizations seeking alternatives to Azure services. 

According to reports from CNBC, Microsoft and Oracle are “not only forcing customers toward a monolithic cloud model but also limiting choice, increasing costs for customers, and disrupting growing and thriving digital ecosystems in the US and around the world”. 

Cloud market competition

The claims from Google come amid a period of heightened regulatory scrutiny for cloud providers globally. 

In April, UK regulator Ofcom proposed that cloud services providers in the UK be referred to the Competition and Markets Authority (CMA) due to concerns that hyperscaler dominance in the space is stifling competition. 

Ofcom specifically targeted Amazon Web Services (AWS) and Microsoft’s Azure cloud division as part of its initial investigation, raising concerns that the duo has somewhat of a stranglehold on the UK market. 

Collectively, the two providers hold a market share of between 60-70%. Google Cloud commands a 5-10% share of the market, Ofcom found. 

Ofcom also highlighted ‘concerning’ practices around ‘egress fees’, whereby customers pay to transfer data out of the cloud or to other providers. 

The regulator said that hyperscaler set fees at “significantly higher rates than other service providers”.

Egress-related fees were found to be highly discouraging for customers, deterring them from switching to an alternative provider. 

Limiting cloud customer mobility

Responding to the FTC, consumer rights group NetChoice suggested that the threat to cloud competition in US markets wasn’t due to a “lack of quality participants” in the ecosystem, but rather cloud providers’ policy of locking in customers. 

“The threat to cloud competition is not a lack of quality participants offering quality services. There are plenty. In fact, there is so much competition that the greatest threat to a healthy market is some cloud providers forcing their legacy consumers into their own clouds, avoiding competition altogether,” the NGO said. 

“The single greatest threat to cloud competition is thus the attempt by some providers to lock in their customers – businesses of all sizes and government agencies especially – into specific clouds by limiting mobility through pernicious contract clauses, predatory discounting, and other dangerous schemes that leave consumers with limited or unpalatable options.”

Is Google baiting regulators?

While Google’s argument does align with longstanding concerns over vendor lock-in within the cloud market, the claims do raise eyebrows. 

Of the three main western hyperscaler providers, Google Cloud by far holds the smallest market share, standing at around 11% based on late 2022 figures. 

Additionally,  while the company has been making headway, its share still stands at around half of Microsoft’s and just one-third of that commanded by AWS. 

Google is also no stranger to receiving anti-competition allegations, as reports in recent years show. 

The company’s advertising business has faced repeated antitrust lawsuits on both sides of the Atlantic, with regulators arguing that the company holds a dominant position in the space that is harming competition. 

A lawsuit filed in 2020 which accused the company of limiting competition in the internet search market is expected to go to trial in September this year. 

Cloud repatriation, the process of offloading IT infrastructure from the cloud to on-premise architecture, has been a recurring topic this year. 

The firm behind project management platform Basecamp, 37 Signals, embarked on a cloud repatriation strategy in February amid spiraling costs, its CTO, David Heinemeier Hansson, revealed in a series of blog posts. 

In all, Hansson suggested the company expects to save $7 million over the next five years by shifting away from the cloud – a significant cost saving and one that comes during a period of deteriorating economic conditions. 

Similarly,  Singaporean SEO firm Ahrefs said it’s saved up to $400 million in the space of three years by maintaining its own on-prem server infrastructure instead of shifting to the cloud. 

Both these examples point toward lingering anxiety among some businesses that public cloud benefits might simply not be worth the costs involved. 

Is cloud repatriation a real trend?

For businesses exploring the prospect of cloud repatriation, there’s more to this than meets the eye, according to René Büst, senior director analyst at Gartner. 

Büst tells IT Pro that recent discussions around cloud repatriation don’t point toward a rising ‘trend’ but fall within the scope of a long-running narrative around the benefits of public cloud.

“The thing about cloud repatriation is that it isn't really a trend,” he says. “This narrative has been going on for multiple years now – I’d say at least two or three. It has been mainly kickstarted and driven by tech providers who don’t have public cloud environments.

“They say there is still this need for private cloud technology or whatever iteration of cloud technology that you run on your own premises. But while we do hear things,  we haven’t seen that production environments have been moved back out of a public cloud onto private or their own environment.”

Cloud costs are fueling cloud repatriation claims 

An underlying factor in the current discussion around cloud repatriation, Büst says, centers around costs. 

The issue of cloud costs has intensified over the last 12 to 18 months, and there’s no doubt many organizations are reassessing their relationship with cloud providers and examining how they can cut costs.

“The thing we are hearing, and what customers are really asking for, is cloud cost optimization,” he says. “It’s one of the biggest pain points, the biggest criticisms at the moment from customers.”

Prospective cost savings may prove alluring to organizations examining cloud repatriation given recent claims from 37 Signals. But this isn’t the only example. 

Dropbox famously announced in 2016 it had invested $53 million in creating its own co-located hardware infrastructure. In 2017, the company revealed it had accrued more than $75 million in savings due to this infrastructure overhaul. 

Büst notes another attractive element of repatriation comes down to the fact organizations wouldn’t be beholden to an individual provider or hyperscaler. If done currently, it could put their destiny in their own hands – but there are pitfalls to bear in mind. 

Why abandoning the public cloud is a major risk

The flexibility and scalability of the public cloud have long been key to driving organizations to embrace this model in the first place. Shifting away could present significant challenges if an organization doesn’t have the expertise or capabilities to manage an on-prem environment. 

“You don’t have this dependence on a provider, you don’t have a lock-in, and you have everything in your own hands. It means you could control the costs,” he says. “But it comes with another cost, because if you’re not good at scaling your environment and infrastructure, and then demand increases, you’ll have a major problem.

“This is the benefit of a public cloud. If it’s designed correctly, it scales as much as it needs to be scaled. One of the benefits you get from public cloud is also the speed of innovation or the accessibility. You don’t have to build everything from scratch,” he adds. 

Fundamentally, the decision depends on what an organization wants to achieve, Büst says. Amid a period when many are exploring the potential benefits of machine learning, artificial intelligence (AI), and large language models (LLMs) such as ChatGPT, the prospect of managing on-prem environments appears daunting. 

“If you don’t have an army of developers who are able to build an application from scratch, then the hyperscalers make it easier for you to drive innovation,” he says. “There is this big topic around AI, machine learning, ChatGPT. Who is able to build and own ChatGPT on-premises? I would say it’s almost nearly impossible.”

Skills shortages are blocking cloud repatriation

Büst says any prospective ambitions for cloud repatriation would be severely inhibited by skills-related challenges. This problem would be especially acute for smaller businesses without the resources to invest in such an extensive process. 

“Large enterprises are more likely to have an army of developers who can deal with this,” he says. “But smaller organizations don’t have the right talent or skills.

“This is what we see frequently in our surveys. One of the biggest pain points or roadblocks to digitization or digital transformation is lack of talent,” Büst adds.

Crucially, he says, the fact larger organizations with the necessary skills and resources haven’t shifted en-masse into a repatriation frenzy demonstrates this likely won’t become a major trend looking ahead. 

“This is only happening on a very small scale,” he says. “There are certainly organizations that are considering doing it, but I don’t think this is going to become a major trend.”

“You see larger organizations, such as Volkswagen, for example, that have and could have the necessary talents to build those environments choosing not to do it. They have decided to partner with AWS.”

AWS’ landmark investment to expand cloud infrastructure in India highlights a growing appetite among hyperscalers in this growing marketplace. 

The firm revealed this week that it will invest $12.7 billion in expanding data center infrastructure in the region in an apparent move to capitalize on recent growth in the India cloud space. 

AWS said the investment program, set to run until 2030, will create more than 130,000 jobs in India and builds on a previous investment of $3.7 billion between 2016 and 2022. 

Puneet Chandok, president of commercial business for AWS India and South Asia, said the company has already committed “billions of dollars” into cloud infrastructure in India to support what he described as “tremendous growth in the use of cloud”. 

The company views its expansion in the region as a means to secure a solid footing in the market while driving “positive social and economic impact”, Chandok said. 

“AWS is committed to driving positive social and economic impact in India. In addition to building cloud infrastructure and helping local customers and partners digitally transform, we have trained more than four million people in India with cloud skills since 2017, and invested in six utility-scale renewable energy projects to meet our global 100% renewable energy goal by 2025,” he said. 

“Our planned investment of INR 1,05,600 crores (US $12.7 billion) by 2030 will help create more beneficial ripple effects, supporting India on its path to becoming a global digital powerhouse.”

Asia cloud market potential

This move from AWS comes amid a period of rapid expansion in the Asia cloud market by the three hyperscalers. 

AWS already has two data center infrastructure regions in India: the AWS Asia Pacific (Mumbai) Region, which launched in 2016, and the AWS Asia Pacific (Hyderabad) Region, which launched in November 2022. 

In March this year, the cloud provider also announced a $6 billion investment in Malaysia as it continues to broaden its reach in South East Asia. 

Its expansion efforts made in the region lend support to research suggesting the public cloud market will continue to grow well into 2026, and this growth will be especially apparent in India.

Research from IDC last year revealed that revenue in the public cloud services market totaled $2.8 billion in the first half of 2022 alone. 

This growth, IDC said, is set to continue over the next several years as organizations increasingly view the country as a prime target for expansion. 

By 2026, the overall public cloud services market is expected to reach $13 billion in revenue, growing at an impressive CAGR of 23.1%. 

Research indicated that some of the key drivers behind this rapid growth is the pace of digitalization in the country and its key industries. 

The banking, financial services, and insurance (BFSI) industry is among those leading the mass adoption of cloud, alongside manufacturing.

Digital transformation across the country’s vast public sector is also a contributing factor, with public services increasingly shifting away from legacy IT systems and shifting to public cloud. 

IDC previously described India as “among the fastest-growing markets for public cloud service” demands. 

Along with AWS, its main rivals Microsoft and Google Cloud appear fully intent on capitalizing on the regional opportunity. Google Cloud and Microsoft have both made significant headway in expanding their footprint in Asia. 

Google has been bullish on its expansion in India and the broader Asia market, having opened a series of data center regions in the country in recent years in Mumbai and Delhi. 

In August last year, Google announced plans to launch three new regions in Malaysia, Thailand, and New Zealand.

Microsoft chief executive Satya Nadella also said last year that the company is ‘bullish’ on expansion in Asian markets.

Microsoft already has a foothold in Singapore, having secured a contract to build the country’s first sovereign cloud in February 2022. However, China and India have both grown to become attractive markets for the tech giant. 

In an interview with CNBC last year, Nadella described India as a “massive growth market” for the firm due to the rising demand for cloud-native applications and increasing digitalization across both the public and private sectors.  

Microsoft’s relationship with organizations in India has traditionally been centered around supporting larger enterprises operating in the country.  

However, the rapid expansion of the Indian digital sector has prompted a new approach in which the tech giant is engaging with domestic businesses, startups, and the public sector.

“Microsoft’s presence in India was about mostly multinational companies operating in India,” he said. “But for now, it’s completely changed.”

“It’s the reverse where these companies who are innovating in India, whether it’s the big large conglomerates or the new startups, are all using cloud technology to be able to innovate and create services that are obviously popular in India and elsewhere.”

Cloud repatriation is the practice of taking workloads and applications off the public cloud and relocating them locally. This might be to an on-premise solution or to a provider that can host and deliver elements like data security and guaranteed uptime. 

Cloud repatriation might seem like a counter-intuitive strategy when the purported benefits of digital transformation largely center around migrating to the cloud. But there’s a compelling argument that repatriation is a natural evolutionary step in cloud computing. 

Engaging in repatriation, after all, is also a cloud strategy, but takes the view that not everything always needs to be hosted in public cloud environments, and that there are benefits to bringing data and workloads onto more private, hybrid, or on-prem environments.

Although the cloud repatriation trend is gaining more traction, particularly as cloud costs rise, by no means is the public cloud about to burst. Deciding whether or not to undertake a cloud repatriation exercise can be a complex task. 

Why do businesses engage in cloud repatriation?

Organizations have often been through significant digital transformation exercises as part of their transition to the public cloud. These efforts include removing data siloes, re-evaluating how data is collected, managed, and used, and data cleanup exercises to de-duplicate, remove outdated information, and ensure what’s collected is truly useful.

In 2021, Gartner identified six key ways in which cloud migration could falter. These include the following pitfalls:

• Poor migration partner selection
• Taking a “lift and shift” approach rather than a more measured one
• Rushing application assessments
• Poorly architected workload environments
• Migration delays due to poor understanding of application dependencies
• Hidden indirect costs

For many organizations, jumping into a public cloud migration feet-first mean such issues may have only been revealed post-migration. They may have noticed, for instance, lower-than-projected cost savings, regulatory hurdles, a lack of skills, difficulties establishing data security, and sub-par deployment. As such, many of these businesses may be tempted to rewind the clock and restore some degree of data residency.

Which businesses does cloud repatriation suit?

There are some organizations that could be well suited to cloud repatriation, particularly those which need to minimize latency or find their public cloud provider makes it difficult or even impossible to comply with regulations. 

Every business should perform financial calculations to work out whether cloud repatriation is really cost-efficient, or whether it might be better to live within the constraints of the public cloud. Even though day-to-day spending might be better, the process of cloud repatriation itself could be a massive cost-sink that only the largest enterprises might be able to afford.

While many organizations are taking the plunge, others may decide that after weighing up the pros and cons it is not for them – or maybe it is not for them just yet. 

What are the benefits of cloud repatriation?

Organizations that decide to engage in cloud repatriation will be looking to overcome any of these major issues, but there are other factors at play.

Vendor lock-in may become more and more apparent over time as an organization settles in with its public cloud provider. This might prevent certain desired activities. What seemed like the perfect solution at the outset might now appear constraining as the cloud provider only offers certain software and hardware features. Latency issues may also arise; when rapid response times are vital in a competitive sector, this could make or break a business.  

We can’t discount the global financial downturn, either, which is causing many organizations to rethink budgets, especially committing to ongoing digital transformation efforts. While the public cloud helps organizations reduce the costs of on-site hardware and storage, there are recurring costs for all services a provider delivers. Venture capitalist Andreessen Horowitz cites a general formula in which repatriation results in costs reducing by a third or even half versus running equivalent workloads in the cloud. 

“There is a growing awareness of the long-term cost implications of cloud,” he writes. “As the cost of cloud starts to contribute significantly to the total cost of revenue (COR) or cost of goods sold (COGS), some companies have taken the dramatic step of “repatriating” the majority of workloads (as in the example of Dropbox) or in other cases adopting a hybrid approach (as with CrowdStrike and Zscaler). Those who have done this have reported significant cost savings.

“Yet most companies find it hard to justify moving workloads off the cloud given the sheer magnitude of such efforts, and quite frankly the dominant, somewhat singular, industry narrative that “cloud is great”. 

“As growth (often) slows with scale, near-term efficiency becomes an increasingly key determinant of value in public markets. The excess cost of [the] cloud weighs heavily on [the] market cap by driving lower profit margins.”

What are the drawbacks of cloud repatriation?

The end result of cloud repatriation may be positive, but there are potential obstacles along the way. The work is unlikely to be a simple “lift and shift”, and the process could take some time. Downtime should be planned for – with adequate contingency time allocated so that tech teams are able to deliver ahead of schedule if possible rather than delaying a move that some in the organization may construe as fixing an earlier failure. 

There will be associated costs, not only in terms of technical infrastructure but also people able to effect the repatriation and then manage and maintain what’s been repatriated going forward. It’ll be important to budget carefully and take into account all aspects to avoid falling foul of the same unexpected costs that may have played a part in the decision to repatriate. 

Depending on the volume of data being repatriated, too, the costs associated with the move could be high. Organizations that decide to go for an on-premise solution will need the right hardware and the space for it, as well as technical expertise. On an ongoing basis, there will be a need for the associated power and ability to keep the system live 24/7 such as uninterrupted power supplies (UPS) and backup power sources in case of outages. 

Businesses will also need in-house technical capabilities to maintain and develop any new configuration. These come in an environment of rising energy costs and a shortage of personnel. There may also be a requirement for physical security measures from personnel to access controls. While some of these elements will not be needed if the local cloud is offsite, others may be. There’s also a pressing need to ensure data security and find a provider that can truly deliver 24/7 uptime.

Alibaba Cloud has announced it will slash prices for cloud services by nearly 50% as the Chinese tech giant embarks on a drive to expand its market share.

Price changes outlined on Alibaba Cloud’s website show that costs for elastic computing services leveraging Arm and Intel chips will decrease by 15% to 20%. 

Similarly, services which rely on Nvidia-based V100 and T4 graphics processors will also see a price decrease of between 41% to 47%.

The move from Alibaba Cloud comes amid a period of intense competition in the APAC cloud computing space, with a number of Chinese competitors vying for an increased market share.

Alongside Tencent and Huawei, Alibaba Cloud has rapidly expanded its footprint across Southeast Asia in recent months. 

In September, the tech giant announced plans to invest around $1 billion to support its expansion in the region. 

In November last year, Huawei also confirmed that it planned to invest $300 million in expanding cloud operations in Indonesia as it looks to build on an increasing foothold in the region. 

The firm currently provides services in both Thailand and Malaysia. 

However, competition with China-based providers is not the only consideration for Alibaba amid this current period of expansion.

Increasingly, hyperscalers such as Microsoft, AWS, and Google have sought to broaden their own service offerings in the region. 

In March, AWS announced plans to invest $6 billion and create a new infrastructure region in Malaysia. 

This hefty investment followed a previous commitment from AWS in October 2022 in which it unveiled plans to establish a new Asia Pacific (Bangkok) region and invest $5 billion. 

Google Cloud has also been targeting a greater foothold in the APAC region, launching a new Thailand-based unit in August last year.

Pricing out the competition 

Alibaba’s latest price reduction follows a long-running trend among Chinese cloud providers in the APAC region. 

Analysis from the Wall Street Journal earlier this year found that Chinese cloud companies frequently offer prices between 20% to 40% lower than American providers to undercut competition. 

Alibaba’s fresh move could further differentiate the provider from both domestic and international competitors and provide a springboard for greater expansion.  

Recent earnings calls from Microsoft and Google have shown there is still a strong appetite for cloud computing services, despite warnings of a pending ‘cloud slowdown’ in recent months. 

In an earnings call for the quarter ending March 31, Microsoft recorded 27% growth at its Azure cloud division. While slower than the 31% recorded in the previous quarter, this exceeded analyst expectations, Microsoft said. 

Microsoft attributed part of this growth to the ongoing hype surrounding the integration of generative AI products within its core service offerings.

In an investor call, CEO Satya Nadella said that the company’s cloud segment was reaping the benefits of AI integration within products. 

He noted that the firm now boasted more than 2,500 customers for its Azure OpenAI service. 

Elsewhere, Google Cloud recorded its first operating profit in the history of the division in the previous quarter. The hyperscaler recorded $7.4 billion in revenue, amounting to a 2.5% profit. 

Is a ‘cloud slowdown’ still possible? 

These earnings - Google Cloud’s in particular - call into question recent claims that the global cloud market was bracing for a ‘slowdown’. 

Deteriorating economic conditions, rising costs, and concerns around energy consumption prompted suggestions that the cloud market was entering a period of sluggish growth earlier this year. 

Research from the Uptime Institute showed that hyperscalers such as AWS and Microsoft had recorded slower growth toward the end of 2022 amid challenging macroeconomic conditions. 

“The global macroeconomic environment - specifically, high energy costs together with inflation - is making organizations more cautious about spending money,” the report warned. 

“Cloud development projects are no different from many others and are likely to be postponed or deprioritized due to rising costs, skill shortages, and global uncertainty.”

But a landmark profit for Google Cloud and a quarter that exceeded expectations at Azure does not necessarily constitute a reversal of any slowdown. 

Compared to pandemic-era highs, all three hyperscalers are still experiencing sluggish growth to some extent. 

Google Cloud may have recorded an operating profit in this quarter, but in Q1 2021 the firm reported a staggering 58% growth as organizations across the globe flocked to the cloud. 

Azure and AWS earnings of late also pale in comparison to that pandemic-era high in 2021 and early 2022. 

Mark Boost, CEO of Civo said that Google Cloud’s earnings are a point of interest given they come at a critical time in the cloud market amid rising concerns over costs. 

“It’s telling that Google Cloud’s first profitable quarter comes at a time of high economic pressure for businesses across the economy,” he told ITPro.

“Q1 has been a time of tightening budgets and minimizing costs,” Boost added. “Rising prices have played a role in driving these profits.”

Hyperscalers are bullish on artificial intelligence 

Satya Nadella’s comments on generative AI benefits appear indicative of how the hyperscalers view the emergence of this new trend. 

In recent weeks, AWS and Google have both outlined plans on how they plan to capitalize on generative AI to support core product offerings, and cloud services are most certainly in the crosshairs. 

 Earlier this month, AWS unveiled the launch of Amazon Bedrock, a managed service offering which it said offers customers the “easiest way to build and scale enterprise-ready generative AI applications”.

The launch of Amazon Bedrock was hailed as potentially a key differentiator for the hyperscaler due to its inclusion of access to third-party large language models (LLMs) to support cloud developers. 

Google also announced the launch of new generative AI tools for cloud developers this week, focusing specifically on bolstering security capabilities for customers within its own ecosystem. 

The Google Cloud Security AI Workbench will offer users an “industry-first extensible platform”, powered by a specialized security-specific large language model (LLM) known as ‘Sec-PaLM’.

ANALYSIS

The extent to which Microsoft has focused on AI in its report is indicative of the cloud giant’s wider company strategy going forward.

Services such as Bing have already benefited from the range of AI tools the Redmond giant has brought in across its product offerings, with the formerly-flagging search engine having exceeded 100 million daily users for the first time in March.

Satya Nadella said that Microsoft is “the platform of choice to help customers get the most value out of their digital spend and innovate for this next generation of AI,” and implicit in this statement is the Microsoft executive’s perspective on the vast value of AI for the firm going forward.

In aligning AI innovation so closely with the wider value proposition of Microsoft’s cloud platform, Microsoft has distanced itself from the competition.

Google has publicly released AI products such as Bard and has now moved to put out ethical AI under the banner of Demis Hassabis’ Google DeepMind, and AWS Bedrock has put developers first with an emphasis on third-party development.

In doing so, both of these firms have set out AI projects from their other operations under specific divisions or frameworks. Microsoft has worked to achieve the opposite, blending generative AI throughout its operations under the ‘Copilot’ umbrella including for 365 Copilot, GitHub Copilot X, Security Copilot, and Copilot for Viva. 

This may cement Microsoft as more of an ‘AI-first’ firm in the eyes of its customers, a title that Google has long held. 

It is more than likely that Microsoft’s spending on AI, so far, outweighs its absolute take in that department - its $10 billion OpenAI investment hasn’t produced a clear profitable product offering as yet. 

But the benefits of such widespread embracement of AI models like GPT-4 can already be seen in bolstered investor confidence, improved customer interest in the 365 suite, and a shot in the arm for Azure’s value offering.

The public cloud may seem far less exciting than it once was when it burst onto the scene more than 20 years ago. Amazon Web Services (AWS) first kicked us into the cloud age in 2002 – with little competition but also barely any convincing use cases to attract businesses. Over time, though, services like EC2 and S3 began to live up to the hype, with competitors soon forming in the likes of Microsoft Azure and Google Cloud Platform.

Businesses had previously been plagued with the burden of maintaining servers and making huge up-front investments. Offering, and living up to, the promise of providing scalable web services and services-based partnerships, meant it’s earned a place in history.

“I would say it’s become the de facto standard for enterprise-class IT, even if a company only has a minority of its workloads in the public cloud,” says Lee Sutar, a principal analyst at Forrester. He puts this down to the fact that a lot of the technologies developed in the cloud can now run in the data centre, such as cloud-native technologies like Kubernetes and even serverless. On the other hand, many tasks that would have been done within a data centre are now being undertaken in software as a service (SaaS). Together these have transformed the way IT is provisioned and run.

Public cloud has also just experienced almost a decade of more than 30% growth, according to Forrester, while Gartner’s vice president for cloud services and technologies, Sid Nag, cites COVID-19 as fuelling recent growth. This was, in part, due to the urgent need to enable remote working, which required things like the scaling up of data-heavy collaboration apps such as Zoom, Teams and WebEx.

The future of the public cloud, however, has come under question thanks to the rise in often the more preferable hybrid cloud and private cloud configurations. Costs are rising too, with cloud repatriation growing in popularity. The Competition and Markets Authority (CMA) is also probing AWS and Azure for anti-competitive practices. Despite surging revenues, the public cloud movement is perhaps going through its rockiest period in 20 years.

Maintaining a solid position in the cloud ecosystem

Experts see a general acceleration away from on-premise data management to the cloud, with public cloud providers innovating as the ecosystem grows in size and complexity. This is despite a growing collection of concerns.

The public cloud holds a robust position in today’s business landscape for a number of reasons. These include scalability, the fact it can be faster and less expensive than on-premise data management and the way providers can “effectively provide cloud infrastructure with a push of a button,” says Adam Coles, head of DevOps and cloud engineering at technology consultancy Opencast.

Enterprises led the way, but analysts are now seeing more adoption coming from smaller businesses – some with zero-ops – who are onboarding to the public cloud for infrastructure capabilities, and mid-market players choosing to add a cloud partner to their roster.

The public cloud isn’t a panacea for all corporate ills, however, and there are many workloads that simply aren’t candidates for cloud computing and will remain on-premise. “Perhaps they’re high-performance workloads, and latency issues mean cloud versions simply aren’t sufficient,” notes Suter. For workloads more suited to the cloud, concerns around cloud sovereignty and data localisation might also mean that hybrid or private cloud solutions are more suitable options, though.

The future lies is specialisation

The public cloud market is highly competitive, and traditional on-premise players are fighting to retain and grow their enterprise customers says Patrick Marshall, a partner at consultant firm Altman Solon.

“Innovations in the on-premise space are strengthening hybrid cloud set-ups. Companies don't tend to go 'public cloud-native' overnight, rather they migrate in phases, from an initial ‘lift and shift’ of legacy infrastructure systems to integrating hybrid cloud models, to digitally mature companies seeking cloud-native applications and services. There’s tremendous variation here.”

He adds that as the cloud ecosystem grows and users feel more comfortable using the technology, we can expect to see greater demand for specialised applications, multi-cloud organisations, hybrid clouds, and clouds tailored to the needs of specific industries.

Multi-clouds in particular have led to many public cloud providers – albeit sometimes begrudgingly – working together with their competitors.

“Companies are increasingly looking to multi-cloud, especially in regulated industries like financial services, where there’s a concern about vendor risk and so there’s some interesting overlaps and relationships there as different providers take on different parts of the multi-cloud in order to capture a share of the revenue,” says Suter.

Revenues have been somewhat flat of late as customers tighten their spending, but the providers are willing to help customers save money through consolidation in the short term – even if it impacts their bottom line – as a way to ensure a long-term relationship and the subscription revenue they will receive.

This money is critical to providers, as they build out their capabilities with huge investments in not only infrastructure but also services as a way to differentiate themselves from the competition.

“This suggests the market is maturing from simply migrating workloads to the cloud to optimising them, driving enhanced insight, analytics, and robust security capabilities,” says Marshall.

“Cloud providers are continuing to innovate, introducing even more capabilities from artificial intelligence, blockchain and others at a pace that is difficult to achieve with private cloud,” adds Naveen Thomas, director for technology consulting at EY. “Without the public cloud, business’ need for such innovations will supersede the IT industry’s ability to keep up with such demand.”

Public cloud providers want to move up the stack

Looking forward, analysts believe expenditure on the public cloud will decelerate – but in no way stall – as organisations tighten their belts post-pandemic.

Even so, overall growth will continue – a view backed up by figures from Wasabi’s 2023 EMEA Cloud Storage Index, which highlighted that 83% of respondents expect to increase the amount of data they store in the public cloud in the next year, and Forrester and Gartner forecast the market will double from $446.4 billion last year to over $1 trillion by 2026.

The overall volume of revenue will continue to come mainly from infrastructure services for the time being, but rather than being a source of profit, the providers will benefit from it as a way to grow their customer share, and in time move customers onto premium services, where the margins at much higher.

“Cloud providers want to move from down the stack and infrastructure realm much more deeply into a business or government organisation – a much more profitable place for the providers to be,” says Suter. “They’re going to get there by offering these sorts of services increasingly in a platform-like manner that’s easier to consume.”

While the public cloud’s hype has certainly reached a peak, its adoption is likely to continue growing well into the future Thomas notes, with Nag agreeing that moving to a public cloud is a “no brainer”.

“Why would I continue to run my own data centres? Why would I continue to spend money buying and throwing hardware at the problem? Why spend my money on electricity needed to power and cool a data centre when my services are only utilised 30-60% of the time? At the end of the day, it just doesn’t make sense,” he says.

The cloud computing space could be bracing for a ‘slowdown’ as businesses wrestle with growing challenges presented by recent economic disruption, according to new research.

A recent study from the Uptime Institute revealed that hyperscalers such as AWS and Microsoft have experienced slower growth towards the end of 2022 off the back of a whirlwind period during the early days of the pandemic.

The report highlighted AWS' 27.5% revenue increase in the third quarter of 2022, marking a small dip from 33% in the previous quarter. According to Uptime Institute's analysis, this marked the “slowest growth” in the company’s history.

Microsoft CFO Amy Hood also recently suggested that Azure could experience a decline in revenue growth in the coming quarter. This follows concerning growth stats in Q3 2022.

Google Cloud isn’t exempt here, either. Although the tech giant reported 38% growth in the third quarter, this marks a significant dip compared to Q1 2021 when the firm reported 58% growth.

Across the board, the report highlighted that current revenue growth rates pale in comparison to traditional figures. Over the last decade, the three hyperscalers have consistently recorded significant growth rates, with AWS increasing by 30% to 40% annually since 2014.

Economic uncertainty

Much of this reduced growth can be attributed to the current economic climate, the report suggested.

Amidst rising costs and growing disruption, organisations globally are tightening budgets and shifting their focus towards optimising processes to accommodate for a lack of spending.

“The global macroeconomic environment - specifically, high energy costs together with inflation - is making organisations more cautious about spending money,” the report warned.

“Cloud development projects are no different from many others and are likely to be postponed or deprioritised due to rising costs, skill shortages, and global uncertainty.”

This spending shift means that some moves to the cloud may have been “indefinitely deferred”.

Similarly, it suggested that businesses are now realising that “migration is just not worthwhile in light of other financial pressures”.

“For those organisations that have already built cloud-based applications, it is neither feasible nor wise to turn off applications or resources to save money: these organisations are, instead, spending more time examining and optimising their costs.”

Rising cloud costs driving hesitancy

A sharp increase in cloud costs over the last 12 months is a key factor in recent concerns highlighted by the Uptime Institute. The combination of external financial pressures and rising rates for businesses means that, moving forward, many organisations will be “more careful about cloud spending”.

“Projects may be subject to more stringent justification and approval, and some migrations are likely to be delayed (or even cancelled) for now,” the report read.

John-David Lovelock, distinguished VP analyst at Gartner, told IT Pro that for many CIOs, the current environment is an entirely new experience and is placing pressure on organisations to optimise and re-consider cloud approaches.

“In 2022, when cloud providers all started to increase prices, CIOs got a price increase in cloud for the first time. For the first time, uncertainty was added to your costs, and stable pricing is something that is really sought after now,” he said.

“The companies that were racing for cloud-only environments and closing down their on-prem are now re-looking. For companies that were doing simple lift and shifts, where they were taking on-prem applications into the cloud, that automatic shift is being re-looked at.

“Some shifts that have already happened are being re-costed because of price increases, and some may end up coming back on-prem.”

This hesitancy, in Lovelock's view, will result in many organisations focusing heavily on cost analysis over the next 12 months to fine-tune how they’re allocating IT spending and delivering the best value for money.

Yet despite this, there is a positive outlook for businesses. Recent analysis from Gartner predicted that worldwide IT spending is projected to surpass $4.5 trillion (£3.6 trillion) in 2023, marking a 2.4% increase on the year previous.

Software spending, which also applies to cloud, is also expected to increase by 9.3% across 2023, which Lovelock said highlights the traditional tendency among some businesses to “double down” on IT spending.

This was the case in the wake of the 2009 recession, he noted.

"In 2009, we really saw the amping up of cloud. People moved to the cloud because they could get more IT for their limited dollars. And that started us on this cloud journey, so to speak.

“Economic uncertainty typically pushes cloud adoption a bit more.”

IT distribution giant and solutions aggregator TD Synnex has announced a fresh expansion of its Google Cloud offering in nearly 60 countries across Europe, Latin America, and Asia.

The firm said the expansion will provide users with greater access to its solutions that can be implemented with Google Cloud’s capabilities in artificial intelligence (AI), machine learning (ML), data analytics, infrastructure, and collaboration.

In an announcement, TD Synnex's chief strategy officer Sergio Farache described the move as a “tremendous opportunity” to build its partnership with Google Cloud, as well as better serve international markets.

“TD Synnex has seen significant growth opportunities in these markets with our hyperscaler relationships, and expanding our availability to Google Cloud in these countries allows us to provide excellent scalability and services to meet existing needs,” he said.

As a global distributor and solutions aggregator, TD Synnex serves more than 150,000 customers across more than 100 countries around the world. Headquartered in Clearwater, Florida, and Fremont, California, the company says its 22,000 staff work to unite IT products, services, and solutions from over 1,500 technology vendors.

TD Synnex's edge-to-cloud portfolio leverages some of the highest-growing tech segments – including cloud, cyber security, big data and analytics, IoT, mobility, and everything as a service. Its mission is to equip partners with a “true, multi-cloud experience” for their customers, it says.

That includes providing resources to support organisations in building cloud practices and delivering cloud offerings – including Cloud Practice Builder programmes, Rapid Risk Security Assessments, Google Cloud Migration Assessments, as well as a host of professional managed services.

The company says that these resources - coupled with Google Cloud offerings, devices, and cloud infrastructure - will position partners to “grow new core competencies and accelerate business growth”.

The expansion of Google Cloud availability follows its initial addition to TD Synnex's cloud portfolio back in May, which was rolled out to the US, UK, Canada, Ireland, and France. Now, TD Synnex is available on Google Cloud in 60 further countries across Europe, Latin America, and Asia.

“With more businesses around the globe moving along their digital transformation journeys, partners with knowledge and expertise in Google Cloud technologies play a key role in these companies’ successful migration to the cloud,” commented Eric Buck, Google Cloud’s director of commercial partners and global distribution.

“By expanding its global support of Google Cloud offerings, TD Synnex is providing more organisations with greater access to the cloud experts and technologies they need to drive positive business outcomes in the cloud.”

The global public cloud market is expected to reach more than $1 trillion in value by 2026, according to research from Forrester.

Revenue from cloud infrastructure, database and analytics, development services, and cloud applications is currently on track to total $446.4 billion in 2022.

However, Forrester believes that “more moderate public cloud growth” will be influenced by a number of factors, including increased competition among hyperscaler providers.

In particular, the industry analysts predicted that cloud infrastructure services alone will account for nearly $496 billion in revenue by 2026, and much of this will be fuelled by this “intense competition”.

Hyperscalers are the largest organisations currently operating in the public cloud and services industries and they will increasingly be forced to contend with a stifled global market as the commoditisation of infrastructure continues.

To accommodate for this, Forrester predicts that larger operators will increase investment in technologies such as custom microchips and advanced wireless networking to match competitor offerings, retain customers, and shift to higher-priced services.

Published this week, the study noted that in order to maintain their current influence in the public cloud market, hyperscalers will be forced to prioritise investments in “differentiated premium services”.

This includes a heightened focus on database and analytics services to meet customer demand for AI and machine learning in the years ahead.

“As customers seek AI and machine learning for product innovation and greater operating efficiency, database and analytics services revenue will rise threefold to $89.5 billion by 2026,” Forrester said in a statement.

This growing demand for AI and machine learning is expected to be a key growth driver as providers sharpen their focus on cloud AI platforms.

Development services are also another key area of interest at present, the study revealed, and revenue in this particular market segment could rise to $51 billion by 2026.

“Factors including serverless becoming integral to app development on cloud platforms, automation, and integration of low-code into cloud development will fuel this growth,” Forrester said.

SaaS competition heats up

Hyperscalers will also be required to focus heavily on strengthening their SaaS offerings over the next four years, according to the study.

The cloud applications market, which is currently dominated by non-hyperscalers, is expected to be worth nearly $397 billion by 2026. This presents an opportunity for hyperscalers to further develop SaaS offerings and capitalise on predicated growth, the study added.

Lee Sustar, principle analyst at Forrester, said current growth expectations follow a decade of intense acceleration despite the impact of the pandemic. But, despite positive expectations, he warned there will be significant challenges in the months ahead.

“This growth will continue into 2026,” he said. “It will be challenged, however, by competitive pressure for hyperscalers and providers to make massive investments in services like database and analytics, development services, and SaaS – all while maintaining high levels of infrastructure investment to keep pace with their rivals’ innovation.”

Future growth

Forrester’s study follows similar research in November which highlighted an acceleration in public cloud growth.

Market research firm Gartner said global end-user spending on public cloud is expected to reach more than $598 billion in 2023, marking an increase of 20.7% on 2021 figures.

The Gartner study found that infrastructure as a service (IaaS) will experience significant growth with regard to end-user spending in 2023 at 29.8%.

Similarly, SaaS and cloud application infrastructure services (PaaS) were also expected to see continued growth.

Gartner warned that both these market segments will feel the effects of current economic disruption, however. Rising inflation and a sharpened focus on margin protection could impact both of these areas.

A US senator is reportedly drafting a bill which could change the way that the federal government buys software, potentially impacting the way big tech companies sell their services to the public sector in the country.

According to Bloomberg, Gary Peters, a Michigan Democrat, is drafting the bill, which would force agencies to buy unlimited software licences instead of ones for a specific number of employees. These enterprise licences, which provide software for an unlimited number of users, can help save money by avoiding paying additional costs when software is overused.

The bill would ensure that government buyers would have to review all of their software, including rules on how it can be used on computers, servers, or cloud providers. Peters, who is the chair of the Senate Homeland Security and Governmental Affairs Committee, is still reportedly finalising the bill.

The US Government Accountability Office (GAO) found in 2014 that most agencies didn’t have adequate policies for managing software licences. GAO found that federal agencies weren’t adequately managing their software licences as they didn’t generally follow leading practices in that area.

Two years later, Congress passed a law, the Megabyte Act of 2016, requiring agencies to manage their software licences better and track their purchases. The new bill aims to build on this by also making plans to adopt government-wide licences for popular software as a way to further reduce costs and use its purchasing power to promote interoperability. It also demands agencies to underline any limitations in software licences and think of ways to minimise any restrictions.

The US federal government budgeted around US$92.2 billion for information technology spending in fiscal 2021, according to GAO. Its 24 government agencies negotiate contracts independently of each other.

Licencing rules have been a contentious issue between cloud companies in the past. In 2019, executives from AWS and Google Cloud hit out at Microsoft for changing how it charges customers for using its software on other public clouds. Some accused the tech giant of trying to lock customers into a single vendor with a complicated pricing structure.

This was followed by a leading competition law expert highlighting unfair and anti-competitive licencing practices enforced by major tech firms on customers globally in October 2021. Microsoft and Oracle were the primary targets of the report, which accused Microsoft of enforcing unfair licencing costs and charging customers more to use its products on third-party cloud platforms. The report also accused Oracle of enforcing licencing restrictions which led to a 10x increase in price when using Oracle software in a third-party cloud platform compared to running it on the cloud giant’s Infrastructure.

Amazon S3 is the company's premier object storage service, and one of the first products it brought to market. It remains one of the most popular storage services available today, working in tandem with, and underpinning, most of Amazon's other customer-facing services.

Amazon S3 is regularly updated with new features and storage capabilities, and patches that are designed to improve data protection and security.

What is Amazon S3?

Amazon Simple Storage – or Amazon S3 as it is more commonly known – is an object storage service. It offers unlimited, flexible cloud storage for seemingly any use case, whether that’s big data analysis, cloud-native applications, or mobile apps.

Object storage, or ‘object-based’ storage, is a type of architecture that manages data as an object, instead of files or blocks. Each object includes the data itself, a variable of metadata, and a globally unique identifier. The metadata element is key, as it is separated to support additional capabilities, such as the capture of application-centric or user-centric information for indexing, which is traditionally harder with fixed metadata.

Amazon S3's object storage approach is designed in a way that simplifies data admin. It removes the need for many basic storage functions, such as construction and management of logical volumes for disk capacity, or configuring settings to prevent disk failure.

Part of the reason Amazon S3 is so popular is its accessible pricing. Customers only pay for what they use, and there is no minimum service fee. It's also quite cheap, with the first 50TB, or the first month of use, being just $0.024 per GB – price accurate at the time of writing.

Amazon S3 security: What are buckets and keys?

Amazon S3 organises data into 'buckets'. These act as data repositories that can handle an unlimited number of objects, although each object is limited to a maximum size of 5TB. Buckets are designed in a way that allows for data to be organized and for access controls to be placed on objects.

 Any object placed inside a bucket will be assigned a unique key, which helps locate and identify specific data objects within each bucket. This key resembles the structure of a URL, and is made up of the bucket number, the object number, and the region or data center the data is stored in.

Buckets must be appropriately configured in order to prevent unauthorized access to data. Historically, Amazon S3 buckets have been the source of a number of high-profile data leaks, including those belonging to the NSA, largely due to misconfigurations through human error.

Amazon has made efforts to minimize cyber security risk with constant updates and new features, and now includes a wealth of security controls for use across a variety of businesses.

For example, following an integration deal with CloudKnox in 2019, the company introduced a built-in identity and access management (IAM) tool to make it easier to monitor access controls.

Admins can also make use of the 'S3 Block Public Access' function, which is able to prevent access to specific buckets from those outside of a company or approved list. This function also overrides any existing blanket S3 permissions.

Read our guide to setting up and securing Amazon S3 for more information.

Amazon S3 latest features and updates

As a flagship product, Amazon S3 often receives new updates and innovations at the tech giant’s annual conferences. These can sometimes be tie-ins with other AWS services but it mainly sees new cost efficiencies and user improvements.

For instance, in 2021, Amazon added S3 Object Lambda, a service that allows users to add their own code to process data retrieval from their S3 buckets before it is returned to an application. The introduction of Lambda enables users multiple views of the same dataset, with capabilities to change the views at any time.

Another new function is S3 Glacier Instant Retrieval, which was launched during 2021’s AWS Re:Invent. This is a new archive storage class which offers low-cost storage for older datasets that are rarely accessed. AWS claims it is the fastest access to archive storage and offers 63% cost savings compared to previous services.

Alibaba Cloud and VMware have launched the next generation of their jointly developed Alibaba Cloud VMware Service, in a bid to help enterprises across China accelerate their digital transformation.

The offering has been designed to enable businesses to migrate and modernize applications faster and seamlessly move workloads between on-premises VMware environments and Alibaba Cloud at scale.

The service includes access to the entire VMware stack running natively on Alibaba Cloud’s infrastructure – a setup the pair said will help maximise performance, availability, security, as well as increase workload density.

“In today’s app-driven economy, more and more Chinese enterprises are adopting a hybrid cloud model to accelerate their digital transformation,” commented Mark Lohmeyer, senior vice president and general manager at VMware’s Cloud Infrastructure Business Group.

“Alibaba Cloud VMware Service helps customers modernize applications, infrastructure and operations faster with demonstrable economic benefits and less risk.”

Ultimately, customers will be able to leverage a VMware cloud platform that can support vMotion migration of workloads to Alibaba Cloud VMware Service with zero disruptions.

The integrations enable enterprise-grade compute, storage and networking capabilities, as well as unified infrastructure and management for high visibility and automation.

Customers can also benefit from improved security, with the ability to create offsite disaster recovery sites to safeguard VMs in any operating system and application. It also facilitates fast and predictable recovery time objectives (RTOs) and the ability to automate disaster recovery workflows to reduce costs.

Additionally, vSphere capabilities will help maximize the value of underlying hardware resources, with the costs associated with moving vSphere workloads to non-vSphere public clouds mostly eliminated, the companies said.

“Alibaba Cloud VMware Service enables enterprises to seamlessly migrate workload to cloud and reduce the costs of both operations and migration,” said Ms Lijuan Chen, Vice President of Alibaba Group. “It also helps enterprises leverage leading cloud technologies to further unlock the benefits of digital transformation.”

The Australian government has decided to renew its cloud services deal with AWS, at a time when the cloud giant is seeking to maintain its dominant position in the region.

AWS and the Digital Transformation Agency (DTA) signed an agreement in 2019 to allow Australian Federal, State, and Territory agencies and departments, as well as public universities and government-controlled corporations access AWS Cloud services.

The new agreement, which will begin on 1 May, 2022 and is said to be worth $174 million, will involve AWS helping to streamline purchasing processes for agencies and provide more opportunities to AWS partners to work with government customers.

Public sector customers will be able to continue to receive over 200 AWS cloud services via the DTA, directly from AWS, or through authorised partners on the AWS Partner Network such as PwC, Accenture or Versent. The company hopes this will help customers maintain easy access to its cloud services and provide a greater choice in how they procure them.

“This enhanced Whole-of-Government Agreement represents AWS’s deep long-term commitment to Australia and our ability to innovate and improve based on feedback from our partners and customers,” said Iain Rouse, public sector country director of Australia and New Zealand at AWS. “We are looking forward to continuing to support the government in its digital initiatives, drive local economic growth, and solve some of the biggest challenges in society.”

As part of the agreement, AWS will also work with DTA and the Australian Public Service Commission to uplift digital capability across government through a comprehensive cloud training programme.

AWS held a 32.3% market share of the Australian infrastructure as a service (IaaS) public cloud market in 2020, according to research published by Gartner last June. Microsoft was in second place with 27.3% followed by Google with 12.7%.

There’s fierce competition between the three providers who are all battling to secure a share of Australia’s cloud computing spend, which is predicted to reach US$14.1 billion by 2025, according to GlobalData.

Securing a repeat deal with the government is seen as a major win for AWS, especially as the other cloud giants are working hard to expand their presence. Google, for example, launched its second cloud region in Melbourne last July, while Microsoft reportedly plans to establish a new $1.3 billion data centre campus in Sydney, according to AFR.

How is Australia’s public sector using AWS’ technology?

AWS said that its infrastructure is used by hundreds of thousands of active customers in Australia each month. This includes large public sector organisations like the Commonwealth Scientific and Industrial Research Organisation (CSIRO), the Australian Bureau of Statistics (ABS), the Australian Securities and Investments Commission (ASIC), and the Australian Taxation Office (ATO).

Through the previous agreement, AWS provided the foundation for the successful collection of data for the Australian Bureau of Statistics (ABS) for the 2021 Census of Population. It worked with PwC to deliver the Census Digital Service, which provided professional services, training, and marketplace services. As a result, ABS was able to handle the workload generated by the 2.5 million people who submitted their forms in a 24 hour period on Census Day.

Geoscience Australia (GA) also worked with AWS to advance key science programme initiatives like the establishment and deliver Digital Earth Australia, a project to use satellite imagery and data when making decisions that support a sustainable Australian environment.

AWS is also working on a new digital platform with Western Australia’s Curtin University. This will help automate IT management, provide new digital services for projects, and allow for data driven decisions across the university’s services. Through this, Curtin has launched an AWS Skills Guild called ElevateU, which will equip over 200 employees with the skills needed to help the move to the cloud.

The UK’s largest property market website, Rightmove, has announced that it is migrating a number of its systems to Google Cloud.

The move will see Rightmove’s more than 1,000 containers being managed by Google Kubernetes Engine (GKE), as well as the creation of a more centralised alternative to its BigQuery data warehouse.

Rightmove’s head of technology operations Andrew Tate said that one of the main reasons why the property website selected Google Cloud as a partner was because of the tech giant’s commitment to run solely on carbon-free energy by 2030.

The goal, which was first announced by CEO Sundar Pichai in September 2020, aligns with Rightmove’s “own commitments to reduce (...) carbon emissions, and will ensure that our platform is consuming the minimum amount of power that is needed to support the maximum number of users each minute of the day”, said Tate.

Google Cloud will also assist Rightmove in simplifying its technology platform, while also “building and delivering new products even more quickly”, which was described as a “key focus area” by Tate.

“We are continuously striving to provide a better experience for consumers on the Rightmove website and better products for our customers. We release over 2,000 updates a year to our applications, so a key focus area for us is reducing time to production and, in turn, time to market,” he added.

By using GKE, Rightmove will be able to streamline the delivery of new services, automate upgrades, as well as scale in line with traffic peaks – which, in the UK, is at 8:48 pm on Wednesdays.

The pandemic has had a significant impact on the UK’s property market, with many city-dwellers choosing to relocate to more rural areas of the country as offices closed and remote working became the norm. This had resulted in an uptick of traffic to property websites, with Rightmove alone recording more than 100 of its busiest ever days for visits in the last 12 months.

Commenting on the news, Google Cloud UKI director Adrian Poole described Rightmove as “no stranger to innovation” that “has already developed a smart platform that is the go-to for property”.

“Having recognised the need to take its platform to the next level to stay agile and continue innovating, it is now going to be able to iterate and accelerate time to production. We’re delighted to support Rightmove in their mission to make home moving easier,” he added.

Google Cloud has revealed that 86% of hacked Google Cloud Platform (GCP) instances in 2021 led to cryptocurrency miners being dropped into customers' environments.

Cryptocurrency miners being installed in cloud instances was the leading issue facing GCP customers this year with 58% of compromised instances having cryptominers installed within just 22 seconds of attackers gaining access.

Google Cloud's Threat Analysis Group (TAG) said this led it to believe the process was script-driven without requiring human intervention.

GCP customers were targeted heavily with attackers attempting to leverage the high levels of compute available to them, without having to foot the bill.

Google Cloud also revealed cloud instances have been compromised in as little as 30 minutes, with the majority taking just eight hours.

The TAG at Google's cloud arm noticed attackers are monitoring the public IP address space for signs of unsecured GCP instances, knowing how quickly they can compromise each one.

"Given that most instances were used for cryptocurrency mining rather than exfiltration of data, Google analysts concluded the Google Cloud IP address range was scanned rather than particular Google Cloud customers being targeted," the report read.

"The amount of time from the launch of a vulnerable Google Cloud instance until compromise varied with the shortest amount of time being under 30 minutes."

TAG researchers also noted that threat actors gained access to GCP instances through exploiting poor customer security practices in almost 75% of all cases.

Half of these cases were compromised because of attackers exploiting instances with weak or in some cases no passwords for user accounts or API connections.

This meant unsecured GCP instances could quite easily be scanned by attackers and brute-forced with minimal difficulty.

Google Cloud customers were also at fault in 26% of cases for installing third-party software in their instance which was then exploited to gain access.

Google Cloud's basic recommended mitigations to the flaws allowing attackers into GCP instances include ensuring accounts always have strong passwords, updating third-party software before a cloud instance being exposed to the web, and not publishing credentials in GitHub projects.

Container Analysis is also available to GCP customers to perform vulnerability scanning and metadata storage for containers, while the Web Security Scanner in the Security Command Center can identify security vulnerabilities in their App Engine, Google Kubernetes Engine, and Compute Engine web applications.

Amazon Web Services (AWS) has won a contract to provide sports clothing brand Adidas with a cloud environment for hosting its SAP workloads.

German-based multinational Adidas AG also intends to develop a modern SAP S/4HANA platform using AWS, according to the deal.

By integrating SAP into its enterprise resource planning (ERP) system, Adidas aims to connect data across its global operations, while also tapping into AWS' SAP expertise to support advanced analytics, data science, and enterprise reporting, the company said in a release.

Utilizing AWS’ machine learning solutions, including Amazon SageMaker, Adidas’ data scientists can forecast seasonal demand for goods. This ensures the right product arrives at a warehouse or retail store at the right time, increasing customer satisfaction.

Through a cloud-based data lake on AWS, Adidas can also gain visibility into both internal and outbound operations, while AWS Sustainability programmes will also assist Adidas in reducing the environmental impact of its cloud operations.

Adidas said the deal will allow it to offer customers discounts and early access to new releases, priority services, and personalized offers.

“We want to drive innovation across our business, which includes everything from how we design our products to how we engage with the consumers who buy them. By committing to cloud infrastructure, we have the scalability and elasticity we need to handle the seasonality of our business during peak demand, and support the projected growth in our e-commerce business in the years to come,” explained Markus Rautert, senior vice president of technology enablement at Adidas AG.

“Deploying SAP environments on AWS isn’t just about transforming our technology—it’s about transforming business opportunities and using AWS’ wide range of cloud capabilities to create efficiencies and bring us closer to consumers,” he added.

AWS is set to launch AWS Australia to allow customers in the region to purchase the company’s cloud services locally.

The tech giant, which has operated in the country for nearly ten years, wants to establish AWS Australia as an affiliated legal entity of AWS Inc and appoint it as a reseller of AWS cloud services for all customer accounts based in Australia, it declared in a FAQ on its website.

AWS doesn’t have a specific date for the change, which needs to be approved by the Australian Foreign Investment Review Board, but it will see AWS Australia provide Amazon Connect, Amazon SNS, Amazon Chime, and Amazon Pinpoint cloud services. However, Amazon Media Communication Services (AMCS) will continue to provide public switched telephone network-related features through AWS Inc.

The company said the move should simplify the process of acquiring cloud services and lead to greater adoption of the technology across the country.

“We regularly review our business structure to ensure that we are able to best serve our customers,” an AWS spokesperson told IT Pro. “AWS plans to launch an Australian Seller of Record to support the growing adoption of cloud computing by enabling our customers in Australia to purchase AWS Cloud services from an Australia based company.”

Purchases made through AWS Australia will be invoiced from the entity, whereas purchases from AMCS will continue to be invoiced by AWS Inc. All customers with accounts based in Australia will be charged a 10% Goods and Services Tax (GST) on all services sold by AWS Australia.

Through the new affiliate, pricing will remain in US dollars although those who pay by credit card will pay in Australian dollars by default and if customers pay through invoice they can choose to pay in US or Australian dollars.

There will be no change to how customers receive and use AWS cloud services, with the only change being the AWS entity that customers contract with for purchasing AWS Cloud services.

Current customer agreements with AWS Inc will be replaced with a new one with AWS Australia, and the company said that the continued use of AWS cloud services following its launch would mean that customers accept the new agreement.

AWS business or government customers will need to update their Australian Business Number and other taxation information on the AWS Bill Dashboard, while other customers need to ensure their details are up to date.

AWS has announced that it’s retiring its Elastic Compute Cloud (EC2) Classic network after 15 years in operation, with customers given until 2022 to migrate their services to its successor.

EC2-Classic, widely considered a foundational cloud computing technology, was launched in 2006 as a virtual computing environment that organisations could use to host scalable applications. These ‘instances’ provided layers of security, different hardware configurations, as well as pre-configured templates.

This technology was eclipsed with the launch of AWS' Virtual Private Cloud (VPC) platform in 2009, which serve as virtual networks of isolated EC2 instances. It was again followed by the launch of Virtual Private Clouds for Everyone in 2013.

AWS has now decided to retire EC2-Classic, giving customers two years to complete all migrations away from the older technology and towards VPC.

“EC2-Classic has served us well, but we’re going to give it a gold watch and a well-deserved sendoff,” said chief evangelist for AWS, Jeff Barr, in an in-depth blog post.

“We are not planning to disrupt any workloads and we are giving you plenty of lead time so that you can plan, test, and perform your migration. In addition to this blog post, we have tools, documentation, and people that are all designed to help.”

When is AWS retiring EC2-Classic?

AWS has begun notifying all current EC2-Classic customers through their account teams, and will soon begin issuing notices in the Personal Health Dashboard.

From 30 October 2021, AWS will disable EC2-Classic in Regions for AWS accounts that have no active EC2-Classic resources in the Region. The firm will also stop selling one-year and three-year Reserved Instances for EC2-Classic.

Then, from 15 August 2022, AWS expects all migrations to be complete, with no remaining EC2-Classic resources present in any AWS account.

All AWS accounts created after 4 December 2013 were already VPC-only, unless EC2-Classic was enabled as a result of a support request, meaning the change is likely only to affect longstanding AWS customers.

How to migrate from EC2-Classic to VPC

Although AWS will notify customers they will need to migrate, there are several steps that businesses running EC2-Classic instances will need to take. To prepare, ahead of any migration, the firm has put together guidance available on the AWS site.

To fully migrate, customers need to find, examine, and migrate several resources. These comprise running or stopped EC2 instances, running or stopped RDS database instances, Elastic IP addresses, Classic Load Balances, Redshift clusters, Elastic Beanstalk environments, EMR clusters, AWS Data Pipelines, ElastiCache clusters, Reserved Instances, Spot Requests, and Capacity Reservations.

Customers may also need to create, or recreate if deleted, the default VPC for their account. In some cases, they’ll need to be able to modify the existing resources, but in other cases, customers will need to create new and equivalent resources in VPC.

The task may seem daunting, but AWS has launched the EC2 Classic Resource Finder script so customers can find all EC2-Classic resources in their accounts. This can either be run directly in a single AWS account or can be used against all accounts within an organisation.

Customers, at this stage, can use a variety of migration tools that AWS has developed including AWS Application Migration Service, Support Automation Workflow, IP Address Migration, and Class Load Balancers.

Comprehensive support is available through Barr’s post hosted on the AWS site, including a more in-depth overview of each of these migration tools, as well as guidance for updating instance types as businesses move from EC2-Classic to VPC.

Migrating to Azure is one major step on your journey to becoming a more holistically digital business.

With Microsoft’s Azure Migration Partner Programme (AMP), you can get the help you need setting up Azure, migration your databases, and modernising your infrastructure. This flyer highlights the benefits of public cloud and the requirements for AMP.

Download it now to see if you qualify and what value you could gain from joining Microsoft’s AMP.

The global outage of cloud computing services provider Fastly was caused by an undiscovered software bug, the company has admitted.

The bug, which was introduced to the company's system last month, surfaced on Tuesday "when it was triggered by a valid customer configuration change", according to Fastly's Engineering and Infrastructure SVP Nick Rockwell.

The hour-long "global CDN disruption", which took place on 8 June, affected the online services of numerous governmental portals, news outlets, and IT and code-hosting websites such as GitHub and Stack Overflow. Amazon and he UK government's online portal were also among countless other websites taken offline.

In a statement on the company's website, Rockwell said that "a customer pushed a valid configuration change that included the specific circumstances that triggered the bug", causing 85% of Fastly's network to "return errors".

"We detected the disruption within one minute, then identified and isolated the cause, and disabled the configuration. Within 49 minutes, 95% of our network was operating as normal. This outage was broad and severe, and we're truly sorry for the impact to our customers and everyone who relies on them," he added.

Rockwell added that the company has taken appropriate measures to prevent future issues, including deploying the bug fix across Fastly's network as well as conducting a complete post mortem of the processes and practices that were followed during the incident.

The company will also determine why the bug hadn't been detected during quality assurance and testing processes and will evaluate ways to improve its remediation time.

However, Fastly didn't provide further details on the nature of the bug. IT Pro has reached out to the company and will update this article when more information becomes available.

Commenting on the events, Angelique Medina, director of Product Marketing at network intelligence company Cisco ThousandEyes, said that the outage is an example of how interconnected the web is.

"Most of the sites we visit, the apps we use and the media we consume are delivered by Content Delivery Network (CDN) providers. By caching web content close to users for maximum performance and availability, they're critical to how we access digital services," she told IT Pro.

"Together with major public cloud providers who host or provide services to the most-used sites and applications online, the delivery mechanism that is the Internet is largely powered by a few providers and whenever something goes wrong with one of them, it can have a massive impact on web users globally."

Nokia has announced a new deployment of its cloud-based convergent charging system on Amazon Web Services (AWS).

The announcement is an expansion of an existing partnership between the two firms that aims to accelerate the migration of high-frequency charging applications to the public cloud for communications service providers (CSPs).

A convergent charging system is a telecommunications innovation that enables the 'convergence' of payment methods. This has emerged due launch of new multimedia services and the increasing prevalence of multi-play service offerings on mobile networks.

The idea is to extract more benefits with cloud-based 5G applications with CSPs tapping into new revenue streams from 5G-enabled technologies, such as IoT.

Nokia claims its Converged Charging (NCC) provides "true" continuous availability as its supports high frequency, low latency demands for an "always-on" charging system that a 5G economy would need. It offers CSPs the chance to run workloads on AWS and develop new ways to monetise projects as a part of their journey to the public cloud.

"The technological barriers of deploying charging systems on the public cloud, such as network latency, are decreasing rapidly due to faster-dedicated connections and far edge CNF deployments; while the advantages, such as having the ability to grow capacity for one-off short-range events, are increasing," said Udi Israel, Nokia's head of digital business product line, cloud and network services.

According to global consultation and research firm, Analysys Mason, SaaS and public cloud will make inroads into the market for monetisation platforms by growing more than six times its size by 2025.

Nokia suggests its NCC's architecture can support CSPs at every step of their public cloud journey, from the deployment of greenfield sub-brands as a first step towards hosting testing environments to full production workloads of the main brand on the public cloud.

"As the world becomes increasingly cloud-centric, it's important that our customers can leverage cloud-native solutions to unleash the potential benefits of the cloud and 5G," said Fabio Cerone, EMEA telco managing director at AWS.

AWS and Red Hat have jointly launched a managed service that allows customers of both companies to manage containerised applications through the cloud.

With Red Hat OpenShift Service for AWS (ROSA), Red Hat customers can create cloud-based Kubernetes clusters, as well as build and scale their containerised applications, without needing to manage any underlying infrastructure.

ROSA allows businesses to more smoothly move on-prem Red Hat OpenShift workloads to AWS, with this managed service available alongside tighter integrations with a suite of AWS services.

Existing AWS customers can also take advantage of the partnership by deploying container clusters without needing to go through Red Hat. Billing, as well as technical support, is handled directly through AWS, with no up-front investments, and customers charged only for the container clusters and nodes they use.

“Increasingly, customers are turning to containers to improve application velocity and portability, and they’re growing to rely on technologies like Red Hat OpenShift and AWS that make it easier to deploy containerised applications,” said AWS’ GM Kubernetes, Bob Wise.

“ROSA gives these customers the ability to seamlessly run containers on AWS using familiar Red Hat OpenShift APIs and tooling, and integrates the full breadth and depth of AWS services to build, scale, and manage their workloads.”

Red Hat’s OpenShift platform is a family of containerised software products. The flagship Container Platform serves as an on-premises platform as a service (PaaS) system built around Docker containers and managed by Kubernetes.

Many OpenShift customers have in the past been required to manage OpenShift clusters on top of AWS deployments by themselves, with much more work required to make it happen, including maintaining two vendor relationships. Using ROSA will allow them to create Kubernetes clusters using OpenShift APIs and tools while being able to access a variety of AWS services from within the AWS console.

With ROSA, AWS claims Red Hat customers can access the breadth of its compute, database, analytics, machine learning, networking, and mobile services in order to build secure and scalable applications much faster.

Each ROSA cluster comes with a fully-managed control plane and application nodes. Installation, management, maintenance, and upgrades are monitored by Red Hat’s site reliability engineering (SRE) division with joint Red Hat and Amazon support. Cluster services, such as logging, metrics, monitoring, are also available.

Customers can acquire the service directly from the AWS console on their own. As with other AWS services, such as elastic compute cloud (EC2), organisations spin up OpenShift clusters and will be charged based on consumption. Customers can also contact their Red Hat or AWS representative to purchase ROSA clusters.

“Red Hat OpenShift provides a common, open and enterprise-grade Kubernetes platform to span hybrid infrastructure, from a customer’s physical datacenter to their operations in AWS,” said Red Hat’s VP for Hosted Platforms, Sathish Balakrishnan.

“ROSA provides a streamlined process for organizations that want to extend the power of Red Hat OpenShift in AWS without having to manage separate technology streams, enabling IT teams to focus on delivering value and not managing underlying infrastructure.”

One of the starkest consequences of the pandemic is the fragmentation of workforces. Mass working from home (WFH) was at first expected to be short-term, but now looks set to become permanent as companies look to radically alter how they organise and manage their employees.

Businesses have used collaboration tools for decades, allowing individuals and teams to work efficiently together. COVID-19 made these tools vital and a hub around which workers could congregate. However, the speed at which some businesses rolled out these tools to remote workers was often hurried anot strategically planned. Now that enterprises have had time to assess what WFH means to them and what tools they really need to make it work, we may see the emergence of a new age of collaboration tools.

It's no surprise that the fastest-growing apps during the pandemic have been workspace management and collaboration tools. According to Okta's Business at Work report, Miro, an app offering whiteboard functionality for teams, experienced 301% growth; measured by unique users, it grew 449% in just a year.

Deployment of project management app Smartsheet has grown 170% over the past three years. Slack has cemented itself as the leading messaging tool with 190% growth. And deployments of Zoom grew over 45% between March and October 2020, while Webex grew 15% and RingCentral grew 18% during this same period.

Martin Langan, chairman and innovation director at legalmatters, tells IT Pro that his company has been using the cloud-based NetDocuments service to help its 20-strong workforce manage their document loads. “The implementation of NetDocuments has played a big part in enabling the firm to continue ‘business as usual’ operations despite employees being unable to work from its office,” he says. “At present, legalmatters is only scratching the surface of what its employees can do with NetDocuments, and the firm expects further benefits to be realised once COVID-19 ‘lockdown’ measures are eased.”

Tools, then, need to be chosen and deployed carefully to ensure they are fit for purpose, but also, that their end users are comfortable with their features. Legacy systems also need to be taken into consideration – often, several tools will be used together, which can provide integration and security challenges.

With this in mind, unifying collaboration tools will become the Holy Grail of many businesses post-COVID-19 to avoid efficiency declines and ongoing security issues. Zoom’s new ability to integrate with Google Calendar and Microsoft’s Together Mode are examples of how this might look, as providers take the opportunity to make their products more attractive in an increasingly remote-focused business world.

New Tools

Carl Harris, group director at BCS (The Chartered Institute for IT) says there has been a shift over the past 12 months in how collaboration tools are used: “Certainly, at the start of the pandemic, the single biggest change in our use of collaboration tools was not which tools we are using, but how we would use the ones at our disposal differently.”

He adds: “Take Microsoft Teams as an example. Prior to lockdown Teams was a value-add collaboration tool, enabling us to reach employees via a simple video call more easily on those irregular occasions when somebody may be working from home. Now it is an integral part of our everyday working. All daily employee interaction is conducted through the tool, and the use of the tool’s features have expanded from just simple video calling to an extensive use of all it has to offer.”

Jörn Rabach, director at architecture practice Hutchinson & Partners, tells IT Pro his organisation has found significant benefits in melding a specialist remote working and collaboration tool into its existing systems.

“We have recently adopted Inevidesk, a virtual desktop solution which has been developed specifically for the AEC (Architecture, Engineering and Construction) sector,” he says. “Most importantly, this solution integrated seamlessly into our existing set-up, allowing the teams to directly work off our London based servers while avoiding the cost and complexity of a hybrid infrastructure solution.”

Fran Nolan, MD of content agency Tribera, explains that her company, too, found itself needing more than the basic level of collaboration platform that everyone flocked to in March 2020.

“We immediately had to get Microsoft Teams as we needed an intuitive way to meet on video as much as possible. We regularly use the chat function too to stay connected and try to keep those collaborative conversations going,” she says. “We then got GetBusy as we were finding we had too many work channels open with email, Slack andWhatsApp so we now use GetBusy which still integrates with email, but the task assignment and completion are a lot slicker.”

Transforming connections

What does all this mean for the future, both of business and of collaboration technology? One type of technology that holds some promise for meetings in particular is alternate reality, virtual reality, and extended reality – with IT Pro having already trialled an example of this in the form of Vive Sync.

Jocelyn Lomer, chief executive at nuVa Enterprises, which develops a virtual meeting room application, explains to IT Pro that while the tools we’ve been using so far have plugged a hole, we need to build on them.

“The desktop video apps are insufficiently rich and do not deliver innovative solutions or allow the mind to range freely,” he says. “Traditional desktop collaboration tools like MS Teams and Zoom have proven to be partly sufficient, but frequently employees are left frustrated, stressed and exhausted from the limitations of the asynchronous tools.”

Shaun Lynn, CEO of channel services provider Agilitas, says that as COVID restrictions subside, businesses will begin to reconsider how they create a more collaborative and flexible workplace outside a time of crisis.

“Collaboration tools need to support this migration, with connectivity and compatibility being key focus areas,” Lynn says. “Like all software-based tools, this will be an evolution rather than a revolution. Market demand will define functionality, and the vendors of collaborative tools who respond the quickest will be the ones to succeed. Like all great tech, some will become the VHS of collaboration tools and others will be Betamax.”

All businesses, no matter their size, have been transforming at speed as the pandemic has re-shaped their workforces. Choosing the right collaboration tools that deliver efficient services to remote teams and individuals are now the cornerstone all companies can build upon. But business leaders should also appreciate that these tools are not just for process management. Collaboration tools can connect remote workers on a personal level. Collaboration is about work, but also reinforcing social relationships that are critical for every employee's wellbeing.

NICE has announced its new cloud-based compliance solution for omnichannel trade recording management called NTR-X.

Built on the NICE trading recording (NTR) platform for secure and reliable voice recording, NTR-X captures all regulated employee communications modalities, including traditional, unified, and mobile, through a centralized platform.

A consolidated and centralized approach for managing trade recording estates and footprints would mean that financial services firms can finally eliminate the need for costly and dedicated local IT resources. Furthermore, organizations can deploy NICE’s NTR-X globally with support for local data capture and storage requirements.

"Although the rest of the world has changed, trade-related recording obligations have not,” said Anna Griem, senior analyst at Opimas, LLC.

Griem continued, “Firms are adjusting to monitor their workforces, which are now often remote. Now more than ever, firms are demanding a lot from their communications recording solutions, especially in terms of the channels they are able to cover, the flexibility of deployment options, and the option to roll out improvements and new services easily across their user base.”

NICE NTR-X’s also helps reduce compliance and regulatory risks with automated recording checks and provisioning of users/resources. This tool’s other interesting features include transcription, bulk call extraction, system management and administration, and compliance assurance reporting.

Finally, NTR-X’s open application programming interfaces (APIs) enable integration with upstream and downstream applications for real-time alerting and actionable intelligence so firms can make informed decisions.

NICE executive vice president Chris Wooten adds, “As the environments in which financial services and energy trading firms operate become inherently more risky, costly and complex, NICE’s passion for innovation has led us to create a one-of-a-kind compliance recording and assurance solution, offering simplified compliance for a complex world. Regardless of the communication modalities regulated employees use or where they work from, firms can cost-effectively manage their entire global recording footprint to increase compliance with key regulations.

"NTR-X also provides a seamless upgrade path for current NICE Trading Recording (NTR) customers and a proven cloud-ready platform that speeds future migration.”

IBM has ditched subscription-based cloud pricing in favour of a 'pay as you go' scheme as it continues to transform its central focus to cloud provision.

With the Cloud Pay as you Go with Committed Use model, customers will need to negotiate a certain amount of cloud usage they’d be committing to pay for month after month, as well as discounted pricing.

IBM's main selling point for its new cloud pricing model is that customers won't be met with penalties for using more than is expected. Instead, customers will be charged at the normal discounted rate they’ve negotiated for their expected cloud usage.

"With this billing model, you commit to spend a certain amount on IBM Cloud and you also receive discounts across the Cloud platform,” said Amit Patel, offering management, direct sales and Haley Lucey, IBM cloud content experience.

"You are billed monthly based on your usage, and unlike a subscription, you continue to receive a discount even after you reach your yearly committed amount."

The change comes after another mixed round of financial results for the computing giant, with a 10% surge in cloud growth overshadowed by the sharpest overall revenue decline in five years.

IBM's cloud business earned $7.5 billion during Q4, with revenue from Red Hat also increasing by 19%. However, this wasn't enough to raise overall revenues, which dropped 6% between October and December.

The pivot to pay as you go pricing is also part of a wider shift in pricing strategy, with IBM also announcing last week that it’s raised the prices of its Enterprise Plan for Db2 on Cloud programme from January 2021.

The console user experience is also getting an overhaul, IBM says, with changes including visualisation of progress towards a cloud commitment, with ways to identify any discount, spending progress and remaining time on a commitment.

Customers can also look at their spending break down, month by month, as well as a detailed usage dashboard for each specific calendar month.

Google Cloud has announced a new tool for managing large fleets of virtual machines (VMs).

The VM Manager is a suite of infrastructure management tools which aims to simplify the process of ensuring the security, compliance, and observability of large VM fleets as businesses scale their operations.

The suite supports Windows and Linux operating system environments and comprises a single dashboard to allow real-time tracking of inventory.

It offers services such as configuration management and patch management, with the latter including patch compliance reporting, which provides insights on the patch status of users’ VMs across Windows and Linux distributions. It also includes patch deployment, which automates the OS and software patch update process, the company explained in a blog post on Thursday.

Lastly, VM Manager also includes an inventory management service which is integrated with Google’s Cloud Asset Inventory product, in order to simplify the analysis of customers’ Google Cloud fleet data.

Announcing the new management tool, product manager Ravi Kiran Chintalapudi and product marketing manager Senanu Aggor said that the new suite “reduces complexity, improves security and compliance reporting, and simplifies monitoring resources in a large cloud environment”.

“By taking advantage of automated tools to keep systems up-to-date, reduce the risk of downtime, and improve productivity of internal users, early VM Manager users tell us that it allows their IT administrators to focus on other business critical tasks,” they added.

VM Manager is available for testing in the customers’ environment using a free tier which provides a monthly usage of 100 VMs per Cloud Billing account. Once the free tier is exhausted, for all VMs that have an active OS Config agent, each active agent is charged at a rate of $0.003 (approximately £0,002) per hour per VM.

IT Pro has contacted Google Cloud about the availability of VM Manager in the UK and will update this article when more information becomes available.

Last year, the company announced Confidential VMs – Google Cloud’s first product in its new confidential computing portfolio which allows companies to process sensitive data while keeping it encrypted in memory. The feature is an evolution of its Shielded VMs, a tool launched in 2018 that companies could deploy to strip out most of the potentially vulnerable startup processes that trigger when attempting to create a new environment.

Until then, like many cloud providers, Google offered encryption on data at rest and while in transit, requiring that data to be decrypted before it could be processed.

The COVID-19 crisis has had a profound impact on all of us, but one of the most drastic changes has been to business IT. Digital transformation and remote collaboration have been catapulted to the top of CIOs’ priority list, and companies have found themselves supporting scores of remote workers.

But with a vaccine tantalisingly close to rollout, how will these trends evolve once it’s safe to go back to the office? Joining us this week to discuss the potential long-term impact of COVID on the UK’s cloud market is Frank Jennings, commercial & cloud Lawyer at Wallace LLP.

Footnotes

• Post COVID-19: The end of the office as we know it?
• Navigating the public cloud
• Alibaba's cloud growth outpaces AWS, Microsoft, and Google Cloud
• Cloud infrastructure spending surges 33% in Q3
• What is a managed IT service?
• How the enterprise can embrace hybrid cloud
• Five minutes with… Adam Gerrard, Yodel CDO
• What are the risks of cloud adoption?
• Five reasons why digital transformation is essential for business growth
• Digital transformation? Don’t bother unless you plan to address risk
• Brexit could cost UK firms £1.6bn if data-sharing agreement isn’t reached
• European court invalidates primary EU-US data transfer mechanism
• What is GDPR? Everything you need to know, from requirements to fines
• Now is the time to embrace remote working
• Microsoft overhauls its privacy policy amid EU concerns
• Managing cloud lifecycles
• The road to recovery: Growing your business in China
• Why you need to include the cloud in your disaster recovery plan
• Channel Pro

Subscribe

• Subscribe to The IT Pro Podcast on Apple Podcasts
• Subscribe to The IT Pro Podcast on Google Podcasts
• Subscribe to The IT Pro Podcast on Spotify
• Subscribe to the IT Pro newsletter
• Subscribe to IT Pro 20/20

Amazon Web Services (AWS) has struck an agreement with the UK government to accelerate the public sector’s digital transformation drive, boost digital skills and raise the level of participation among smaller cloud providers.

The ‘One Government Value Agreement (OGVA)’ is a three-year memorandum of understanding (MoU) between AWS and the Crown Commerical Service (CCS) that spans two tiers for both smaller and larger organisations.

Cloud services will become available to the public sector as a single client, offering more cost savings for deployment against organisation-by-organisation deals. AWS will also establish a digital skills fund, which will train more than 6,000 civil servants in cloud computing free of charge.

The first tier supports organisations at the beginning of their cloud journeys, allowing them to conduct their first cloud projects with support such as bespoke training, workshops, and “cloud credits” for new research projects. The second tier, aimed at larger organisations already well underway in terms of using cloud services, offers various additional services they can take up and advantageous pricing structures.

“CCS provides commercial agreements which help organisations across the entire public sector save time and money on buying everyday goods and services,” said chief executive of the Crown Commercial Service, Simon Tse.

“This agreement with AWS demonstrates excellent value for the public sector organisations we serve, and supports them in their drive to improve services for citizens across the UK.”

This is an agreement in the same mould as those struck earlier this year between the government and major cloud providers such as UKCloud, Google Cloud, and Oracle.

IBM, for example, struck an agreement that would allow public sector organisations to benefit from ‘preferential commercial terms’ when moving their workloads to the cloud. HPE, meanwhile, struck a deal with the UK government to provide hybrid cloud services on a pay-per-use model.

In addition to the skills find, the AWS agreement specifically contains an element that hopes to encourage the uptake of services by smaller cloud providers and AWS partners. More than 150 members of the AWS Partner Network would be able to pitch their own services to public sector organisations, including many cloud-based small and medium-sized businesses (SMBs).

Dropbox has partnered with Facebook on a digital transfer project which will allow users to import data directly from their social media accounts.

Starting today, the new integration will help users securely transfer photo and video libraries from Facebook, as well as organise the files in any chosen way.

The integration also offers customisable privacy settings, and although the imported files will be set as private by default, users can choose to share the albums with others.

Commenting on the release, Dropbox’s VP of Business Development Jamie Perlman said that the company’s goal was to “provide products and services that make our users’ digital lives easier and less chaotic, so they can really focus on what matters”.

“People no longer accept being locked into one service or product, and want the freedom to use the tools they love. We’ll continue to look for ways to seamlessly integrate with best-in-breed products so that we can serve as the connective platform for all of today’s leading productivity tools and devices,” he added.

The release of the new integration comes weeks after Facebook called for appropriate legislation to be introduced in order to make it easier for users to transfer photos and videos to a competing tech platform.

In comments sent to the US Federal Trade Commission (FTC), Facebook said it planned to improve on its existing data portability tools “in the coming months”. A hearing on the topic is scheduled for 22 September 2020.

Currently, Facebook already allows users in the US and Canada to transfer photos and videos to Google Photos.

Meanwhile, in June, Dropbox unveiled several other features which aim to help users stay organised while they work from home. The updates included a password manager service called 'Dropbox Passwords' and filing system called 'Dropbox Vault', as well as an automatic backup service, 'Computer backup', which saves Mac and PC folders to Dropbox for secure access on the go.

Since April 2018, The Scale Factory have reviewed over 200 workloads on the Amazon Web Services (AWS) platform. In this keynote session, CEO Jon Topper shares how The Scale Factory goes about running a review, and talks about some of their findings. Watch now to learn what aspects of architecture and operations teams struggle with, and how IT professionals can avoid these problems themselves.

Jon Topper

CEO, The Scale Factory

Jon Topper runs The Scale Factory, a team of cloud infrastructure and DevOps experts based in London, UK. He's worked on infrastructure problems for Fortune 500 companies, and startups, across a range of market sectors.

Microsoft is pursuing major cloud deals with foreign governments in the mould of the highly lucrative Joint Enterprise Defense Infrastructure (JEDI) cloud infrastructure project that it secured last year.

Although elements of the contract in the JEDI cloud infrastructure project, worth $10 billion over ten years, are still not fully settled, the industry giant is increasingly keen to pursue similar deals outside of the US.

The company is indeed in the process of signing deals similar in shape to the cloud infrastructure project assembled for the US Department of Defense, according to people familiar with the matter speaking with CNBC.

This has come after overseas governments have begun to show an interest in replicating the type of relationship that Microsoft has formed with the Pentagon. Microsoft, specifically, has staffed the project with people who hold security clearances and has committed to delivering existing products and services, as opposed to specifically-built technologies at a customised price.

However, the company’s move to focus on more government contracts comes at a time when its JEDI contract work has been put on hold due to a legal challenge from Amazon. The rival cloud company is especially aggrieved as it feels the contract was awarded unfairly.

This conscious evolution in Microsoft’s cloud strategy will likely be formally announced later this year, a source told CNBC, with overseas intelligence agencies and militaries set to be key customers. Another source said the firm had already established JEDI-like cloud contracts with foreign governments, although it’s not clear which countries are the main focus.

“We’ve worked with governments around the world on a longstanding and reliable basis for four decades,” a Microsoft spokesperson told CNBC.

“We have government customers using our products to enhance their services with the latest in commercial innovations, deeply engage and connect with citizens in powerful ways, and empower government employees with the modern tools they need to be more efficient and effective, and to give them time back to focus on their agency mission.”

The JEDI work is currently on hold while the Pentagon re-examines elements of the contract, which Amazon said were ridden with errors and which a judge suggested may not comply with current standards. The Pentagon was due to finish the examination last week, on 17 August, although it requested a 30-day extension earlier in the month, according to Nextgov.

Read m

IBM is developing an in-built security and compliance module for large banks and tech companies using IBM Cloud for Financial Services, giving customers a central hub to manage risks.

The dashboard, which spans infrastructure, platform, data and the developer workflow, allows clients to continuously monitor and enforce security and compliance procedures across multiple workloads to improve cloud security.

Launching in August, the IBM Cloud Security and Compliance Centre builds on the acquisition of Spanugo last month, with the company's cloud cyber security posture management systems to be integrated into the new product.

The dashboard will take advantage of the acquisition with the capacity for customers to augment the developer workflow with automated security and compliance checks.

This news has come in addition to IBM expanding its reach and collaborations, welcoming BNP Paribas to its customer base of financial institutions, and growing its network of independent software vendors (ISVs) to more than 30 tech companies.

These are providers that have onboarded cloud services and systems to IBM Cloud for Financial Services. This is in addition to a major milestone in IBM’s partnership with Bank of America.

This collaboration has allowed IBM to establish a set of cloud security and compliance control requirements as the basis for its policy framework. This feeds into the Policy Framework for Financial Services module that allows customers to host key applications and modules with confidence.

"With major financial institutions and technology partners joining our financial services cloud, IBM is establishing confidence within the industry and around the globe that the IBM public cloud, equipped with industry-leading encryption capabilities, is the enterprise cloud for all highly regulated industries, including financial services healthcare, telco, airlines and more," said IBM Cloud senior vice president Howard Boville.

"IBM is creating a platform with the goal that financial services institutions can address their regulatory requirements, while creating a collaborative ecosystem that helps enable banks and their providers to confidently transact."

Confidential VMs will be the first product in Google Cloud’s new confidential computing portfolio, the company has revealed, allowing companies to process sensitive data while keeping it encrypted in memory.

The announcement aims to capitalise on a growing interest in confidential computing, a field that promises to revolutionise cloud computing by providing what is in effect permanent uptime on data encryption.

Until now, like many cloud providers, Google offered encryption on data at rest and while in transit, requiring that data to be decrypted before it could be processed. Through Confidential VMs, Google customers encrypt data while it is being processed inside a virtual machine.

Google’s new feature is an evolution of its Shielded VMs, a tool launched in 2018 that companies could deploy to strip out most of the potentially vulnerable startup processes that trigger when attempting to create a new environment. This is in addition to a few layers of extra protection against external attacks, and monitoring systems that check for unexpected changes to data.

These added layers of security were required given that data is normally decrypted in order to be processed inside the VM – something that not only creates added risk from external attacks, but also forces companies to deploy strict access controls to ensure only the right employees handle the data.

The Confidential VMs feature, available as a beta today, attempts to solve these issues by allowing customers to encrypt their data in memory, meaning encryption can be maintained while it is being used, indexed, queried, or trained on.

This promises to have profound implications for those industries that process highly sensitive or heavily regulated data, such as those in finance and health, or government agencies. Companies in these sectors, which are usually forced to keep most of their data processing in their own private networks, now have a public cloud option, Google claims.

“These companies want to adopt the latest cloud technologies, but strict requirements for data privacy or compliance are often barriers,” Sunil Potti, general manager and VP of Security at Google Cloud. “Confidential VMs… will help us better serve customers in these industries, so they can securely take advantage of the innovation of the cloud while also simplifying security operations.”

Providing confidential computing is largely a question of hardware, something that many vendors have grappled with over the past few years. In this case, Google has turned to AMD and its second-generation EPYC CPUs – these now support a ‘Secure Encrypted Virtualisation (SEV)’ feature, which allows a VM to run with encrypted memory using a unique, non-exportable, key.

“Our deep partnership with Google Cloud on its Confidential VMs solution helps ensure that customers can secure their data and achieve performance when adopting this transformational technology,” said Dan McNamara, senior vice president and general manager of AMD’s Server Business Unit.

“Confidential VMs offer high performance for the most demanding computational tasks all while keeping VM memory encrypted with a dedicated per-VM instance key that is generated and managed by our hardware.”

The company has also confirmed that any customers already running workloads in a VM on Google Cloud Platform will be able to shift these over to a Confidential VM using a checkbox.

Google has also said that VM memory encryption will not interfere with workload output, promising that the performance of Confidential VMs will be on-par with that of non-confidential VMs.