View from the airport: AWS re:Invent 2018


Bobby Hellard

30 Nov, 2018

Go big or go home, is a slogan for Guy Fieri’s Vegas kitchen, which is just around the corner from the Venetian hotel where AWS re:Invent had taken up a residency for the week.

The cloud giant’s annual conference certainly did just that, taking over the famous Las Vegas strip where over 50,000 people flooded the MGM Grand, the Bellagio, the Venetian and more for the latest cloud computing innovations from AWS.

And the announcements came thick and fast and left most visitors excited and overwhelmed.

There were surprising announcements for blockchain services, satellite geospatial data innovations, machine learning capabilities and plenty more. Partners like Formula 1, Fender and GuardianLife took to the stage to talk up AWS services like SageMaker and AWS Greengrass. The scale of the conference matched that of the city which hosted it, challenging you to experience as much as possible.

“The first day I walk 13,265 steps, which equates to 6.5 miles, so that gives you a sense of getting around to see all the customers,” said Philip Moyer, the global director of financial services at AWS.

“One of the things you probably saw in every single session, there was a customer talking about what they are doing. That is really important for us to have the customer on stage. And, the customer loves to be there as well. It gives great validation for the type of innovation they do.”

Customer innovation was a running theme for the event, where AWS when to a great effort to stress the importance of letting its partners build and develop on top of its products. Gavin Jackson, the managing director of AWS for the UK and Ireland put it best when he said that some people want a Lego product that has instructions to build a specific thing, whereas others will just want Lego bricks to build something from their own imaginations.

“We really try to focus on the builders and really try to make it tangible,” added Moyer. “The business side, the deep technical side, the security side, for me it’s really exciting we get to see people faces after they’ve said: ‘we’ve been asking for that and you’ve delivered’. So, in that aspect it’s almost like Christmas day for us, unwrapping all these presents for our customers. So that part is really exciting for us.”

Perhaps the best present of all was saved for the very end, as superstar DJ Skrillex headlined the AWS:Play closing party. The DJ’s appearance was announced by CTO Werner Vogels, during his keynote on Thursday.

The AWS: Play after party

According to Vogels, Skrillex requested to be there. Having first headlined the event back in 2014, the DJ was keen to return for a night of fun. Clearly, he knew, as did the 50,000 plus guests, there’s no place quite like Vegas and, arguably, no cloud event quite like re:Invent.

Brent Schroeder Presented at @CloudEXPO New York | @SUSE #Cloud #CIO #Linux #IoT #SmartCities #DigitalTransformation

Every organization is facing their own Digital Transformation as they attempt to stay ahead of the competition, or worse, just keep up. Each new opportunity, whether embracing machine learning, IoT, or a cloud migration, seems to bring new development, deployment, and management models. The results are more diverse and federated computing models than any time in our history.

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Exploring the evolution of Kubernetes to manage diverse IT workloads

Kubernetes started in 2014. For next two years, the adoption of Kubernetes as container orchestration engine was slow but steady, as compared to its counterparts – Amazon ECS, Apache Mesos, Docker Swarm, GCE et al. After 2016, Kubernetes started creeping into many IT systems that  have wide variety of container workloads and demand higher performance for scheduling, scaling and automation.

This is so as to enable a cloud native approach having a microservices architecture in application deployments. Leading tech giants (AWS, Alibaba, Microsoft Azure, Red Hat) have started new solutions based on Kubernetes and in 2018, they are consolidating to build a de-facto Kubernetes solution which can cover every use case that handles dynamic hyperscale workloads.

Two very recent acquisitions depict how Kubernetes has created a huge impact in IT ecosystem. One is IBM’s Red Hat and VMware’s Heptio acquisition. IBM did not shown the direct interest to target container orchestrations but had eyes on Red Hat’s Kubernetes Based Openshift.

At VMworld Europe 2018, the acquisition of Kubernetes solution firm Heptio by VMware triggered a lot of heat. This acquisition is said to have a significant impact on the data centre ecosystem where Red Hat (IBM) and Google are among the top players. Heptio’s solution will be co-integrated with VMware’s Pivotal Container Services (PKS) to make this as a de-facto Kubernetes standard which will cover maximum data centre use cases from private, multi-cloud and public cloud.

Heptio was formed by ex-Google engineers Joe Beda and Craig McLuckie back in 2016. In its 2 years Heptio captured the eyeballs of industry giants with its offerings and contribution to cloud native technologies based on Kubernetes. Also, Heptio had raised $33.5 million through two funding rounds.

So, the question is why and on which kind of use cases Kubernetes is being used or being tested to use.

Enabling automation and agility in networking with Kubernetes

Leading communication service providers (CSPs) are demonstrating 5G in selected cities. 5G networks will support a wide range of use cases with a lowest possible latency and high bandwidth network. CSPs will need to deploy network services at edge of the network where data is generated by number of digitally connected devices.

To deploy services at the edge of the network and have a control on each point of the network, CSPs will need automated orchestration on each part. What's more, as software containers are being adopted by CSPs to deploy virtual network functions, CSPs will be leveraging cloud native approach by employing microservices based network functions and real time operations by employing CI/CD methodologies. In this scenario, Kubernetes emerged as an enterprise level container management and orchestration tool. Kubernetes brings a number of advantages in this environment.

Jason Hunt wrote in a LinkedIn post that “Kubernetes allows service providers to provision, manage, and scale applications across a cluster. It also allows them to abstract away the infrastructure resources needed by applications. In ONAP’s experience, running on top of Kubernetes, rather than virtual machines, can reduce installation time from hours or weeks to just 20 minutes.” He added that CSPs were utilising mixing of public and private clouds for running network workloads. Kubernetes works well for all types of clouds to handle workloads of any scale.

Other example of Kubernetes utilisation in telecom is the recent release of Nokia CloudBand software for NFV. With this release of CBIS 19, there is support for edge network deployments along with support for containerised workloads and integration of Kubernetes for container management along with OpenStack which will handle virtual machine as well. In the last few years, usage of containers has being discussed within NFV architecture. But this release is one of the first representations of employing containers and container management for handling network functions in NFV infrastructure.

Kubernetes and AI/machine learning

KubeFlow – Managing machine learning stacks: Moving further on managing containers, Kubernetes has evolved to the extent that it is used to manage complex workloads for machine learning applications.

Machine learning applications or systems contain several software components, tools and libraries from different vendors which are all integrated together to process information and generate output. Connecting and deploying all the components and tools require manual efforts which are tedious and takes a fair amount of time. Also, for most of the cases the hardest part is that the machine leaning models are immobile, and require re-architecture while transferring from the development environment to a highly scalable cloud cluster.

To address this concern, Kubernetes introduced open framework KubeFlow which has all machine learning stacks pre-integrated into Kubernetes which will instantiate any project easily, quickly and extensively.

KubeFlow Architecture for ML Stacks

Image source: https://www.kubeflow.org/blog/why_kubeflow/ 

Kubernetes for eCommerce retailer JD.com: Besides the launch of KubeFlow, one interesting application of Kubernetes for AI is JD.com, a Chinese eCommerce retailer, which is managing the world’s largest Kubernetes clusters with more than 20,000 bare metal services in several clusters across data centres in multiple regions.

In an interview with CNCF, Liu Haifeng, chief architect at JD.com, was asked about how Kubernetes is helping JD for AI or big data analytics. He disclosed: “JDOS, our customised and optimised Kubernetes supports a wide range of workloads and applications, including big data and AI. JDOS provides a unified platform for managing both physical servers and virtual machines, including containerised GPUs and delivering big data and deep learning frameworks such as Flink, Spark, Storm, and Tensor Flow as services. By co-scheduling online services and big data and AI computing tasks, we significantly improve resource utilisation and reduce IT costs.”

JD.com is declared as winner in the top end user award by CNCF for its contribution to the cloud native ecosystem.

Managing hardware resources using Kubernetes

Kubernetes can also be used to manage hardware resources like graphics processing units (GPUs) for public cloud deployments. In one of the presentations at KubeCon China this year, Hui Luo, a software engineer at VMware demonstrated how Kubernetes can be used to handle machine learning workloads in private cloud as well.

Summary

As enterprises have started embracing open source technologies in considerable manner to reduce costs, it has been observed that Kubernetes has been evolved from just a container orchestration framework to handling even more complex workloads of different types.

Even though most of the software industry has leaned towards cloud-native, dividing monolithic applications in small services which can scale, managed independently and communicate among themselves through APIs, Kubernetes has become a de facto standard to completely take care of all services residing in containers. A similar mechanism of Kubernetes has been adopted to handle NFV, machine learning, and hardware resources workloads.

Download our eBook to know more about the Kubernetes technology and industry/market insights.

The post Evolvement of Kubernetes to Manage Diverse IT Workloads appeared first on Calsoft Inc. Blog.

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Samsung is building a data centre in Korea’s DMZ to challenge Azure and AWS


Clare Hopping

30 Nov, 2018

Samsung has announced it’s building a data centre just a mile from the South Korean border with North Korea on an old civilian shooting range called Chuncheon.

The demilitarised zone (DMZ) is pretty close to the site, with military personnel patrolling around 50km away, over the border. But Samsung doesn’t seem to think that’s too concerning and even hopes in the years to come, it’ll be able to open a data centre over the border in North Korea.

The company will use the facility to develop its own cloud computing hub, going head to head with more established rivals Amazon, Google and Microsoft.

The reason Samsung has set its sights on such a dangerous place to build its biggest data centre? The cool air from the mountains surrounding the building will cool the servers, saving on power.

The area is generally a few degrees cooler than capital city Seoul and this, the engineers think, will cut the amount of power needed to keep servers running at their optimum by more than 80%.

“The era of cloud is coming, so if we don’t do it, we’re going to be weeded out of business,” said Kim Ho, vice president of Samsung SDS Co., the division that’s been given the responsibility of developing its cloud business.

Although Samsung already owns data centres around the world, they aren’t designed for customer use – they just house the company’s own data.

“This is not a bad strategy for Samsung, indeed perhaps the only one that they can try right now given the maturity of the market,” David Linthicum, chief cloud strategy officer at Deloitte Consulting told Bloomberg.

“However, they are really in the managed services provider world, with hundreds of companies currently playing in that space. While Samsung should be able to scale better, they need to do some things that are more creative and innovative to stand out.”

Box isn’t losing as much money as expected, and builds customer base


Clare Hopping

30 Nov, 2018

Box has revealed smaller than expected losses and managed to substantially grow its user base, despite rather bleak analyst estimates.

The company posted its quarterly results this week, revealing it now has more than 90,000 paying customers – up from 87,000 last quarter and this has had a significant impact on its profits.

The company posted revenues of $155.9 million for the quarter, up 21% year-on-year, with billings for the period at $155.6 million, an increase of 10% compared to the previous quarter. Nevertheless, Box posted a loss of $39.5 million, namely because if is still focussing on growth rather than consolidation, but its losses were less than the same quarter 12 months ago. 

“Our solution selling strategy continues to gain momentum with strong attach rates for add-on products and large deal growth in the third quarter,” Aaron Levie, co-founder and CEO of Box said.

“With more than 90,000 customers, including BBVA Compass, National Bank of Canada, and Shiseido Company, Box continues to expand its role as a strategic technology partner to power digital transformation for enterprises.”

He added that the cloud company is meeting business demand for a single, open platform for cloud content management, coupled with enterprise-grade security and “powerful workflow capabilities.”

Box is predicting its revenues for the full fiscal year will be between $608.2 million to $609.2 million, much higher than analyst predictions of $607.5 million.

“With more than 40% growth in deals worth more than $100K and our attach rate for add-on products increasing to over 80% of these deals, we are capturing our market opportunity while driving continued leverage for long-term growth,” Dylan Smith, co-founder and CFO of Box added.

AWS re:Invent: A blockchain service for the right market at the right time


Bobby Hellard

30 Nov, 2018

The announcement of blockchain services at AWS re:Invent came as a surprise, but the cloud giant believes it has the right product for the right market at the right time.

Amazon QLDB, a cryptographically verifiable ledger and the Amazon Managed Blockchain, which is a fully managed blockchain service, were unveiled by CEO Andy Jassy during his keynote speech. The company hadn’t shown much interest in the technology before and Jassy said it was because “it hadn’t seen any examples in production that couldn’t be solved by a database”.

Looking at blockchain itself, which is formed from a perpetual list of records, called blocks, linked using cryptography and contains timestamps and transaction data, there are not yet masses of innovative use cases and its original purpose, underpinning cryptocurrency, is not the best example of it as Bitcoin continues to sink.

Then there’s the empty hype, such as the Hdac advert that played out during this year’s world cup, which offered smart home technology powered by the magic of blockchain, without much explanation of how it actually worked.

But according to Philip Moyer, the global director of financial services at AWS, the Amazon QLDB and the Amazon Managed Blockchain service are not empty products following tech trends or just blockchain for the sake of it, they’re what AWS customers have asked for.

“A lot of people would say we are late to the game,” he said. “But we actually think we are finding the right product for the right market at the right time.

“Over 90% of our roadmap, is driven by what customers ask us to do. That’s a really important aspect, we don’t just build science projects, we’re really building the things the customers ask us for.”

As was evident at re:Invent, AWS works with many financial organisations, such as DTDC, insurance firm Guardian Life and Australian National Bank, which announced a long-term cloud partnership with AWS. For Moyer, these large financial organisations supported its work with blockchain.

“They were really excited,” he said. “They offered loads of support, as did Guardian for those announcements for blockchain-as-a-service and also for QLDB.”

“When you deal with very high-value transactions like the financial industry does, having the veracity of that transaction occurred and being able to have traceability of it, especially if you’re a large scale, highly distributed bank around the world, if somebody puts in a credit into your bank account in one place and someone makes a transaction in another place at the precise same time, to be able to resolve those things, QLDB is a really exciting advancement for the financial industry.”

Liverpool FC focuses on user-centric UC in strategic partnership with Mitel


Maggie Holland

26 Nov, 2018

Liverpool FC has signed a multi-year deal with comms firm Mitel as it continues on its quest to boost the customer experience and satisfaction levels.

The idea behind the union is to make use of the cloud and communications platform to ensure fans can interact with the club using whatever medium they choose, whenever suits them best. That also includes a self-service element should fans so wish.

By focusing on Omnichannel, LFC hopes to be able to offer fans a better experience regardless of how they choose to interact with the club. The key reason, LFC CEO Peter Moore says, being because fans are the heart and soul of what makes the club successful.

He stressed the LFC is focused on three key areas: engaging fans, driving growth and investing in technology.

“We couldn’t be happier that you are part of our family,” Moore told a room full of assembled Mitel executives, partners and press.

“We can’t do this [the fan-centric vision] without technology partners. We can do it through technology and with unified communications. I know you’re [Mitel] going to make our lives and our families’ lives better.”

Moore claimed the club has a whopping 771 million fans around the world. However, with a home stadium capacity of just shy of 55,000, most of them will never get to see their team play at Anfield.

“We are powered by a global pulse and that is both a challenge and an opportunity for me… We are by far the most watched team in the world,” he said.

“How do we manage that emotional conflict between the lad from Bootle and the lad from Bangkok who both believe they deserve a ticket?”

The partnership, the financial terms of which have not been disclosed, will also have wider benefits that help enhance efficiency for those working in Anfield stadium itself as well as LFC’s head office, training grounds and retail facilities.

Employees will have the necessary tools at their disposal to work anywhere on any device to communicate with their peers and customers alike.

Moore is not shy about claiming it is the most-watched football club in the world and while the stats themselves may be contested the sentiment cannot.

“We are the number one tourist attraction in the city. The Beatles are big… So, one of the challenges I have as CEO is how do I take this incredibly unique football club [to the next level]?” He said.

“Football means more to the people in this city than it does anywhere else in the world. We take enormous pride in the fact that we have received – for the third year in a row – the Visit Football awards for the best stadium to visit… For those who work for the club, it means more than just a job. It’s not a 9-5. It is something very special.”

The partnership will involve the integration of Salesforce CRM to provide one single view of the fan so their comms history with the club is visible to agents regardless of the channel utilised. This, LFC hopes, will position it to offer a much more tailored fan experience.

“We have both evolved and both changed. You have to evolve, you have to grow, you have to change and you have to be prepared to bet on the future,” said Graham Bevington, Mitel’s executive vice president of business development.

“Customer experience is at the forefront of everything Liverpool does. And it’s at the forefront of everything we think about.”

Moore added: “I couldn’t be more excited about the partnership as to what you bring to what we need.”

Everton FC ‘lucky’ to have SureCloud’s data protection suite in place for GDPR kickoff


Keumars Afifi-Sabet

29 Nov, 2018

With each passing season, the footballing industry seems increasingly detached from the realities most businesses face. This is underlined by extortionate sums exchanged between clubs, players, and supporters on a daily basis; not to mention a counterintuitive penchant for amassing mountains of debt to drive footballing success.

But the General Data Protection Regulation (GDPR) has affected every organisation large and small in the same way, with the sporting world no exception. Just as with startups, massive football clubs must comply with demands to bring data practices in line with modern standards – from appointing a Data Protection Officer (DPO), to training staff.

For Everton FC, this process entailed leaving it to as late as January to get things started; putting faith into the all-in-one, modular GDPR suite developed by SureCloud. Maintaining a database of 32,000 season ticket holders, 60,000 registered fans, 360 employees, players and agents as well as third-party suppliers, through Excel spreadsheets, is a laborious task, with or without GDPR. But a changing landscape spurred the Premier League stalwart into re-examining how it managed data and processed GDPR’s additional demands.

Everton was still using a series of spreadsheets to manage its data within the football club, community outreach programme, and pre-school, as soon as January 2018. This is when the club hired Ian Garratt as its DPO to single-handedly oversee the transition to SureCloud. But the platform wasn’t initially up to the standards expected, Garratt tells IT Pro, and needed a significant amount of custom tailoring to suit the club’s data protection needs.

“I hadn’t worked with a full management system before. I’d looked at OneTrust which is an equivalent, very template-based, and then what I’d worked on was spreadsheets, Excel and ones that we’d built in-house, at my old employer.

“So I went into SureCloud with a long list of tailoring. Most of them were only quite minor but there was quite a few.”

Although compliant by 25 May, implementation took so long that Everton considered hanging onto its spreadsheet-based system as the deadline fast-approached. It would’ve posed a massive headache given how slow searching through spreadsheets would have been, not to mention handling internal and external queries taking a great deal longer compared with SureCloud’s touted greater functionality.

“By the time we started the discussions it was probably late January, early February,” Garratt continues. “Knowing we had to get all of the data mapping done, and in place before May, we were considering whether or not we had to do that spreadsheet-based, and import it into SureCloud afterwards, just because of the timing.

“But we were lucky in that they got it all done for us.”

Bringing the human touch for higher-quality data

Before joining Everton Garratt was information governance manager with the Southport and Ormskirk Hospital NHS Trust in Wales. Using spreadsheets in this post meant he could slot straight into the role with Everton, but would have to quickly adapt to the platform.

Fresh to the club, and sole member of the data management team, he had to gain a wider understanding of what data each department held, and their internal processes. He devised an approach to overcome these challenges all at once, sending questionnaires to each department, and inputting the answers into SureCloud himself. But the key, Garratt says, lied in working through them with people one-on-one, to personally guide them through what needed to be sent back.

Instead of giving everybody within the organisation their own SureCloud login, Garratt decided to limit access to the club’s data to three individuals: himself, the director of risk, and head of IT. They also decided against setting up email reminders and alerts, despite the fact this approach takes longer. But, why? 

“I think just from my experience you get better quality input if you actually sit down with people and do it with them, rather than sending an email alert and asking them to update something themselves when they’re not specialists in the area,” he said. 

A matter of when, not if

During implementation, Garratt oversaw the migration of data from on-prem infrastructure to the cloud. But assurances over security and the decision to go with SureCloud in the first place rested with the club and were a matter for before he joined.

“Football clubs are getting targeted more and more often. Certainly, from a backup point of view, I feel happier with it being hosted rather than living on a server,” Garratt says.

“The risk is always there. Cyber security is now on our risk register, and I think always will be. I’d expect it to be on every company’s register nowadays. The other threat I suppose is malicious staff.”

“If we did have an incident,” he explains: “We should straight away be able to see what the data types are, what the fields are, the volume, what systems there are, and what associated systems. So we’d be able to get a really good idea of the scale of the incident, and we’d be able to get that very quickly.”

And what about minor incidents, such as supporters’ email addresses inadvertently leaking due to a lapse in staff concentration, as struck West Ham FC in August?

“If that happened with us, any mass marketing should go up to our marketing department, and they’ve got a system that sends them all as individual emails – all personalised – so you don’t need to do it as BCC.

“If we had a lot of emails like that going out – and it’s largely to Hotmail or Gmail sort-of accounts, we’ve got systems that would flag them, quarantine them, then either myself or someone from the IT department would be able to review them… I imagine West Ham has probably got the same sort of system, and it just, for whatever reason, didn’t go through that system.”

Revisiting supplier contracts proves the biggest GDPR hurdle

The most difficult part of Everton’s wider compliance journey involved re-examining the several existing contracts with the club’s many suppliers. Although just a handful of suppliers have access to personal data held by the club, reaching out to renegotiate a GDPR-compliant addendum proved the toughest aspect for Garratt.

“The data mapping is what took the most time, but that’s because there was a lot of it. But getting contracts in place with suppliers with the GDPR-standard terms has been the hardest bit of the gameplay.

“They would’ve had general data protection and confidentiality terms, but GDPR stipulated a wider scope for what the contracts had to include – even things like assistance with impact assessments, acceptance of audits by us and by the ICO, and breach reporting.”

By using SureCloud, Garratt says, the club was able to list all their third parties, and a subsection of those who were charged with handling the club’s data, as well as whether they were based in an EU country, or a non-EU country with or without data adequacy.

But it was no substitute for the hard graft the club’s had to put in to ensure GDPR-compliant terms were included in each contract individually, with each supplier providing their own template, and seeking to consult with their own legal teams respectively.

AWS Re: Invent: AWS adds more programme languages to Lambda


Bobby Hellard

29 Nov, 2018

AWS is giving developers the choice to integrate their prefered programming languages into Lambda Runtime API and Lambda Layers.

These two new AWS Lambda features enable developers to build custom runtimes and share and manage common code between functions.

Making the announcements on stage in Las Vegas at the cloud giant’s re:Invent conference, CTO Werner Vogels told the crowd: “You asked for it, so we’ve given it to you.”

It turns out, what they wanted was more options with Lambda, more flexibility to use the code they are au fait with. AWS Lambda is an event-driven serverless computing platform the company launched in 2014. It was designed to simplify the building of smaller, on-demand applications that are responsive to events and new information.

Up until now, the platform only supported some programming languages, such as Node.js, Python, Java, Go and NET Core, which had previously limited developers with other language preferences.

The Runtime API for AWS Lambda defines a standardised HTTP-based specification which codifies how Lambda and a function’s runtime communicate. It enables users to build custom runtimes that integrate with Lambda to execute functions in response to events. With the Runtime API, AWS said that developers can use binaries or shell scripts, and their own choice of programming languages and language versions within the Lambda tools.

“We decided to change course and give you the ability to start bringing your own language to Lamda,” said Vogels. “We are launching today, custom runtimes for Landa, where you can bring your own execution environment.

“Now there is no limitation anymore for what kind of language you can use to do serverless development in.”

Lambda functions in a serverless application typically share common dependencies such as SDKs, frameworks, and now runtimes. With layers, AWS said users can centrally manage common components across multiple functions enabling better code reuse.

This announcement swiftly followed news that Ruby, the Japanese object-orientated, general purpose programme language has been made available on AWS Lambda functions.

How IT services are adapting to ongoing digital transformation

As CIOs and CTOs shift their focus to digital transformation projects and the launch of new digital business offerings, demand for traditional IT services has evolved. Worldwide revenues for IT services and business services totaled $506 billion in the first half of 2018 (1H18) – that's an increase of 4 percent year over year, according to the latest market study by International Data Corporation (IDC).

During 1H18, it was a mixed picture for tier-one global outsourcers and systems integrators headquartered in developed countries. Most remained flat or declined slightly. But this was partially offset by stronger performances by two large global vendors, who returned to double-digit growth.

IT services market development

Indian IT services firms still outpace the U.S. and European counterparts, but their growth slowed from a year ago, continuing their 2H17 deceleration. While most large Indian vendors continued to grow at rates in the low single digits to high teens, it was offset by a few vendors' sharp slowdowns.

Project-oriented revenues grew by 5.2 percent in 1H18 to $191 billion, followed by 3.6 percent growth for managed services and 2.7 percent for support services. The above-the-market growth in project-oriented markets was mostly led by business consulting and application development markets with growth rates of 7.5 percent and 6.5 percent, respectively.

Most major management consulting firms still posted strong earnings in 2018, although growth rates cooled slightly: business consultants still extract more value in digital transformation. However, the market is now being driven by enterprise buyers who are executing their digital growth agenda.

In outsourcing, revenues grew 3.6 percent to $238 million in 1H18. Application-related managed services revenues (hosted and on-premise application management) outpaced infrastructure and business process outsourcing.

On the infrastructure side, while hosting infrastructure services revenue accelerated to 7.2 percent growth in 1H18, mostly due to cloud adoption, IT Outsourcing (ITO) – still almost twice as large a market and mostly big buyers and vendors – declined by 1.5 percent, largely chipped away by cloud cannibalization across all regions.

On a geographic basis, the United States grew by 4.3 percent, slightly higher than the market rate, while Western Europe grew only by 2.6 percent. IDC expects Western European services revenues to be stable but structurally weaker than North America. IDC forecasts the region to grow below 3 percent annually in the coming years.

In emerging markets, Latin America, Asia-Pacific (excluding Japan) (APeJ), and Central & Eastern Europe led in growth. In Latin America, most major economies are turning the corner despite problems in Argentina and Venezuela.

In APeJ, Australia saw its growth scaled back slightly to 3.8 percent in 1H18, from 4.3 percent in 1H17. The largest market, China, trimmed its growth rate to just 7.2 percent, down from the 8 percent to 9 percent during the last two or three years.

Outlook for IT services in emerging markets

So far in 2018, the weaker growth in China and Australia was partially offset by faster growth from other emerging markets in APeJ. IDC expects this trend to continue. Governments will fund large digital transformation initiatives and a better investment outlook will also drive IT spending.

"Steady growth in the IT services market is being driven by continued demand for digital solutions across the regions," said Lisa Nagamine, research manager at IDC. "But during 2018, as well as most of 2017, it is really the Americas and cloud-related services that are having the largest impact on revenue worldwide."

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