The Internet of Things (IoT), artificial intelligence (AI) and cloud computing are among the key application markets in driving semiconductor providers’ revenue streams over the coming year, according to a new report from KPMG.

Of the 150 semiconductor industry leaders surveyed by the professional service provider, three quarters said wireless communications, including smartphones and other mobile devices, are either important or very important. This number is down from 84% in 2016. IoT was cited by 63% of respondents, with robotics (45%), cloud computing (43%) and artificial intelligence (43%) also seen as important. Cloud and AI saw a notable increase year over year, from 27% and 18% respectively.

Not only are the technologies important in their own right, the report asserts that the applications have value to each other, with cloud infrastructure critical to enabling AI and capturing IoT-produced data.

This doesn’t mean that everything is rosy in the garden, however. When it came to strategic priorities for semiconductor providers, the most popular response – cited by 37% of respondents – was diversifying into a new business area. 29% said they are looking at merger or acquisition options, while 25% opted for talent development and management. Other responses noted a maturing market. While 24% and 23% said they were looking at greater speed to market and articulating their company’s vision respectively in 2016, last year saw these numbers drop to 12% and 6%.

According to a report from IHS Markit in September, the global semiconductor industry beat $100 billion for the second quarter of 2017, representing the sector’s best quarter in three years.

“The majority of semiconductor leaders said they expect their companies – and the industry as a whole – to increase revenue, largely driven by diversification into revolutionary new technology segments, such as artificial intelligence, the Internet of Things, and autonomous vehicles,” wrote Lincoln Clark, partner at KPMG’s US firm.

“We found that while most semiconductor executives recognise it will be nearly impossible to sustain such massive growth over the long-term, optimism exists about 2018.”

You can read the full report here (pdf).

This week has seen a bevy of announcements from Oracle at its CloudWorld event in New York, from a launch of 12 new data centre regions, to product launches, to acquisitions.

Monday saw Oracle announce plans to ‘significantly expand its modern cloud infrastructure footprint’, including the opening of 12 data centre regions across Asia, Europe, and the Americas. Countries include China, India, Japan, the Netherlands, Saudi Arabia, Singapore, South Korea, and Switzerland. The company claims customers in more than 195 countries are running applications on Oracle Cloud Platform and Oracle Cloud Infrastructure.

The company’s most recent big bet, around its autonomous database cloud, has also been expanded upon. Thomas Kurian, Oracle president of product development, demonstrated how to make all Oracle Cloud Platform services ‘self-driving, self-securing and self-repairing’, with the capabilities set to be available in the first half of 2018. Among the potential examples available include automated code generation and security remediation for application development, as well as self-learning chatbots.

The first day also saw the Redwood giant expanding its enterprise service level agreements with what is claimed to be the industry’s first end-to-end financially backed cloud warranty for infrastructure as a service (IaaS).

Tuesday saw the launch of new capabilities for Oracle’s Internet of Things Cloud around Industry 4.0. The new capabilities are based around the range of IoT Cloud applications, such as asset, production and fleet monitoring, connected workers, and service monitoring for connected assets. The IoT Cloud ‘enables organisations to gain rich insight into the performance of assets, machines, workers, and vehicles so they can optimise their supply chain, manufacturing, and logistics, reduce time to market for new products; and enable new business models’, as the company put it.

On the acquisition side, Oracle also announced an agreement to buy Zenedge, a cybersecurity firm and provider of malicious bot detection and DDoS mitigation technology. The company said that the combination will ‘allow enterprises to adopt cloud services without compromising performance, cost, control or security through an expanded Oracle Cloud Infrastructure platform.’

Oracle’s most recent earnings report in December saw total cloud revenues up 44% year over year at a total of $1.5 billion, with cloud revenues representing 16% of the company’s overall revenue, up from 12% this time last year. Speaking to analysts at the time, CTO Larry Ellison said the autonomous database should ‘dramatically accelerate the growth of our PaaS and SaaS businesses’.

Elsewhere, Oracle has released a report from Dr. Michael Mendel, senior fellow at the Mack Institute of Innovation Management at the Wharton School, which argues that a cumulative $2 trillion (£1.42tn) will be added to the US GDP in the coming 10 years as a result of cloud services.

The report, titled ‘Intelligent Finance: How CFOs Can Lead the Coming Productivity Boom’, polled CFOs, CEOs at companies ‘essential to US economic growth’ – Oracle customers such as Blue Shield of California and ConnectOne Bank being some of them – and found a widening productivity gap between the haves and have nots when it came to investing in software technologies.

“Many companies are holding back from widespread adoption of cloud services and new technologies because their current system is ‘good enough’ and they worry about the transition being too disruptive,” the report notes. “They don’t see how their reluctance hurts everyone – shareholders, workers, and the larger economy.”

The CFO, or equivalent head of finance, is therefore seen as the arbiter of change, the report notes, as the exec has a broad view of what’s going on across the organisation, through the finance function being transformed by new technologies. “These new capabilities put the CFO in the right position to advocate for the future,” Mendel concludes. “Any CFO who doesn’t understand what cloud services mean for her or his company is going to end up getting left behind.”

UKCloud has announced a collaboration with Microsoft and Cisco to provide what is claimed to be the UK’s only implementation of Microsoft Azure Stack dedicated to the public sector.

The company says it is moving its focus from ‘public cloud for public sector’ to becoming ‘multi-cloud experts’, as organisations progress from initial cloud deployments. Through Cisco as an OEM partner, companies can use Azure alongside other platforms, such as Oracle, VMware, and OpenStack.

As analyst firm Gartner proclaimed in April, CIOs in the government sector spend only one fifth of their IT budgets on digital initiatives, compared to their private sector counterparts who spend nearer a third. In other words, while cloud has become de rigeur for new IT projects across the public sector, many companies are still beholden to legacy systems or older IT contracts.

“We started to hear from our customers that it’s not just those cloud-native, new applications that they’re looking to do, but the vast majority of what they’re seeking to do is solve the headache they have from legacy applications and the vast majority of what they need to support day in, day out,” Bill Mew, UKCloud cloud strategist, told CloudTech.

“By providing a multi-cloud platform where they can take Oracle workloads to our Oracle cloud, some of their Microsoft workloads to our Microsoft cloud, virtualised workload to our VMware cloud, and on top of that they can have an OpenStack environment… we’re providing them with the best of all worlds,” added Mew.

UKCloud has been liaising with customers for the past few months preparing for the launch, and has spotted three primary benefits. Alongside the integration between newer and more legacy technologies, customers in the more sensitive areas of the public sector – such as justice, defence and national security – say they have benefitted from the extra sovereignty and security assurance from running on UKCloud as opposed to running directly on Microsoft.

The biggest element, however, is through the support aspect. Customers will be able to enlist the help of cloud architects, DevOps consultants and more, as well as 24/7 support – with no extra cost.

“Our belief is there is no ‘one cloud fits all’ solution,” said Leighton James, UKCloud director of cloud strategy and products. “When you look at those existing systems you see Oracle, SAP, IBM… you see lots of Microsoft stuff in there, but also a lot of Linux and open source, so trying to take such a diverse and heterogeneous environment and trying to move it to a homogeneous environment – i.e. AWS or just Azure – just isn’t going to work.

“What we’re saying [to organisations] is… continue to transform, but modernise at the same time.”

This is the latest claimed industry first from the company. In October, UKCloud became the first European provider to offer a cloud GPU computing service.

You can find out more about the new service here.

Enterprise cloud spend is on the up while Microsoft Azure gains ground on Amazon Web Services (AWS), according to the latest RightScale State of the Cloud report.

The study, which polled almost 1,000 respondents, found that Azure enterprise adoption was at 58%, gaining around on AWS with 68%. For organisations who have just begun their cloud journeys (below), Azure leads AWS, in 49% and 47% implementation respectively.

When it came to public cloud adoption, 64% of respondents say they now run apps on AWS compared to 57% the year before. Azure moves up to 45% from 34%, while every other company saw a positive uptake. Google went up three percentage points to 18%, IBM two to 10% and Oracle three to 6%, while VMware Cloud on AWS and Alibaba, asked for the first time this year, polled 8% and 2% respectively.

Serverless was cited as the top growing cloud service at a growth rate of 75%, with containers as a service usage growing by 36% year over year. Docker adoption increased to 49%, up from 35% the previous year, with Kubernetes almost doubling in adoption figures for the past 12 months.

For the second year running, the primary cloud initiative among respondents was optimising existing use – or in other words, cost savings – cited by 58%. Moving more workloads to the cloud (51%) and better financial reporting (44%) were also frequently chosen. Two thirds of respondents said they will increase their cloud spend by at least 20% in 2018. 18% said it would more than double, while the same number argued there would be no change or a decrease.

“The survey showed that enterprise cloud spending will grow rapidly over the next year, and yet 35% of cloud spend is wasted. As a result, optimising cloud costs is the top initiative for cloud users in 2018,” said Michael Crandell, RightScale CEO in a statement. “Multi-cloud continues to be the preferred strategy for enterprises, with companies reporting that they use nearly five different clouds on average.

“With this multi-cloud approach, Azure is now nipping at AWS’ heels and, in fact, is in a dead heat with AWS among enterprises that are just beginning their cloud adoption,” Crandell added.

The RightScale study is seen as a benchmark yearly analysis of the cloud industry. Last year’s offering found that while AWS usage had stayed the same year over year, Azure figures went up considerably.

You can see the full data set here.

Main picture credit: RightScale, used under CC BY

Blockchain technologies hold ‘great promise’ for securing connected devices and systems, according to a new paper from the Cloud Security Alliance (CSA).

The report, put together by the alliance’s Blockchain/Distributed Ledger Technology Working Group and titled ‘Using Blockchain Technology to Secure the Internet of Things’, explores the intersection between the two technologies, as well as giving an extensive overview of deployment options.

As the report puts it, a cloud-enabled blockchain network can be divided into two sections; the blockchain service, which has communications between transaction and mining nodes – such as enterprise servers, smart devices, or cloud-based VMs – and the blockchain clients. The latter are IoT devices with limited hardware resources, which do not store the distributed ledger, and instead communicate either through M2M communications or API queries of the blockchain service nodes.

More than one blockchain service can co-exist in different contexts, such as a personal home network, the enterprise, and the Internet, the report adds.

As a result, the CSA advocates a system whereby IoT clients within a multi-blockchain service can collaborate. In the example the report gives, the first blockchain network is a dedicated enterprise implementation, with IoT blockchain clients being sensors and smart devices, with the second being a consumer smart home with the clients as smart refrigerators, temperature sensors, and so forth. “The architecture in which IoT devices are clients of a blockchain service is primarily adopted by current industry efforts for implementing blockchain technology,” the report notes.

This is by no means the first report which has looked to examine the two technologies. Last month a report from Kaleido Insights argued combining distributed ledger technologies and the IoT would give the latter ‘a level of interoperability, transparency, and security currently absent from today’s architectures.’

It is evident that more research bodies are coming to similar conclusions. “The IoT is having a major impact on how many companies conduct business and people go about their daily lives. However, security has become a stumbling block to widespread adoption or implementation,” said Sabri Khemissa, co-chair of the Blockchain/Distributed Ledger Technology Working Group and lead author of the paper.

“This research should serve as a roadmap to implementing technology that will push the dial forward in securing IoT,” Khemissa added.

Google has announced that its cloud tensor processing unit (TPU) chips are available in beta on Google Cloud Platform, aimed at speeding and scaling up specific machine learning workloads.

The company claims that using the new chips will help train business-critical machine learning models in hours rather than days or weeks. The units will utilise TensorFlow, the open source machine learning framework, with up to 180 teraflops of floating point performance – in other words, being capable of handling 180 trillion floating point calculations each second – and 64 GB of high-bandwidth memory onto a single board.

According to a blog post from John Barrus, product manager for cloud TPUs at Google Cloud, and Zak Stone, product manager for TensorFlow and cloud TPUs, the units are available in ‘limited quantities’ today with usage billed by the second at a rate of $6.50 USD per cloud TPU per hour.

As ever, Google has put together various customers exhorting the benefits of the new product. Alfred Spector, chief technology officer at investment provider Two Sigma, said the Google Cloud TPUs were ‘an example of innovative, rapidly evolving technology to support deep learning.’

“We made a decision to focus our deep learning research on the cloud for many reasons, but mostly to gain access to the latest machine learning infrastructure,” said Spector. “Using Cloud TPUs instead of clusters of other accelerators has allowed us to focus on building our models without being distracted by the need to manage the complexity of cluster communication patterns.”

“Here at Google Cloud, we want to provide customers with the best cloud for every ML workload and will offer a variety of high-performance CPUs (including Intel Skylake) and GPUs (including NVIDIA’s Tesla V100) alongside Cloud TPUs,” Barrus and Stone wrote.

You can find out more about the Cloud TPU machine learning accelerators here.

An interesting series of findings from ISACA in its latest report: almost one in three organisations polled are not calculating return on investment in their cloud computing initiatives.

The findings, which appear in a report titled ‘How Enterprises Are Calculating Cloud ROI – And Why Some Enterprises Are Moving Ahead Without It’, reveal how companies are increasingly moving away from the ROI model. “If ROI is not calculated in advance of implementation, it becomes difficult to validate or refute the expected value,” said Ed Moyle, ISACA director of thought leadership and research.

As a result, enterprises who are not going down the ROI route are instead calculating cloud investments by non-financial criteria, such as greater business agility, and shifting funding from capital expenses to operating expenses.

78% of the more than 100 CIOs polled said their enterprise has implemented some form of cloud computing. Of that figure, 84% said their organisation uses software as a service, with 49% using infrastructure as a service and 36% platform as a service.

Just over a third (35%) of respondents said they calculated ROI on cloud initiatives before and after implementation, compared with 29% who only do it before implementation, and 4% who opt for after. Of those who do calculate ROI, just under half (49%) opt for a hybrid model, compared with a quantitative (45%) and qualitative (23%) model.

When it came to what factors organisations considered when putting together their ROI calculation, operational expense formed 98% of responses, while capital expenses or savings (91%) was also highly considered. Changes in staffing requirements – cited by 68% of those polled – business impact (66%) and transition expenses (57%) were also cited by the majority.

The wide range of responses and lack of consensus leads ISACA to one conclusion; the need for an industry-wide tool. “Although the majority of enterprises do continue to calculate cloud ROI at some point in the cloud implementation process, the challenges associated with the mechanisms available for them to do so are clear,” the report concludes. “Without an industry-wide consensus for cloud ROI calculation, adoption of a formalised model is understandably stunted.”

The issue of calculating cloud ROI has naturally been around since the very first initiatives. ISACA itself proposed such a universal model in its previous ‘Calculating Cloud ROI: From the Customer Perspective’ whitepaper. Back in 2011, this publication explored some of the models around at the time, including Azure, Amazon Web Services, and VMware.

You can read the full ISACA paper here (registration required).

Last month, IBM put out its most recent earnings report – and one statistic stood out. For the first time in more than five years, revenue did not decline from the previous year’s quarter.

Cloud revenue was $17 billion for the year, while run rate in the company’s as-a-service offerings was more than $10bn. Speaking to analysts, James Kavanaugh, IBM senior VP and chief financial officer, said the company was ‘doing a lot of work to reposition [the] business, to help move clients to the future, investing, shifting skills and reallocating capital… in short, a lot of heavy lifting.’

Revenues reversing a longstanding downward trend point to IBM enjoying the fruits of its labour – for now. But the truth is, that from containers, to blockchain, to machine learning, IBM has been looking at a series of emerging technologies for some time – and it is now looking to utilise its expertise to give clients a competitive advantage.

One of the key ways the company is doing this is through Garages, a space for companies big and small to test out these technologies and see how it affects their operations. IBM launched its tenth, in Copenhagen, earlier this week. And according to John Considine, general manager of cloud infrastructure services, it’s ‘fantastic’ to go through the problem-solving process with organisations.

“It might be our deep learning, our analytics and data, certainly our cloud platform to create a solution that’s, believe it or not, workable,” he tells CloudTech. “[It’s] a short period of time just to say this is feasible, it can be done, and you can get on this innovation and transformation pretty quickly.”

The artificial intelligence and machine learning angle is of particular note given the recent news of an extended partnership between IBM and Salesforce. Salesforce named IBM its preferred cloud provider, while the latter named the former its preferred platform for customer engagement. But the intrigue was on how the two companies would do it – namely, combining the insights of Watson and Einstein respectively.

“One of our theories leading into the cloud, for the past few years, of course is that data is enormously important for the enterprises,” says Considine, “and given more than 80% of the world’s data is still maintained behind the corporate firewall, our focus has been how do we enable the businesses to take advantage of that data, to combine it with new processing techniques, new data sets, and new capabilities.

“[It’s about] all the things associated with machine learning and deep learning, analytics and bringing all of these things together in a form that allows them to tap into those resources and deliver not only application modernisation, but really even process reinvention.”

Another partnership recently continued and extended was that of NVIDIA. The GPU and chip provider is bringing its Tesla V100 GPU to the IBM cloud. Considine explains how important this is for machine learning; to train a 300 MB model – something in the region of 300 million trillion maths operations – takes hours rather than years with a data centre full of standard processors. “That kind of acceleration is critical for us and for the market to be able to make the value of these artificial intelligence and deep learning models reachable and actually relevant,” says Considine.

Take containers as another example. As this publication said at the start of this year, 2017 was notable for the rise of container technologies, not least because the largest cloud vendors, from Amazon Web Services (AWS), to Microsoft, and Oracle, signed up for the Cloud Native Computing Foundation (CNCF), home to the Kubernetes project. IBM – along with Google, Intel, VMware and others – was a founder member in 2015. Todd Moore, IBM vice president for open technologies, sits as the CNCF’s governing board chair.

Considine takes up the story. “A while ago – probably a year and a half ago, in cloud time a long time ago, [we] started making some significant investments in containers,” he says. “Partly because we have so many patents, so much research in the area, we really adopted the value of containers, and have been busily transforming a lot of our services to be container-based internally.

“Part of this process has been to take our learnings about how to make these transformations – and you can think of this for everything in our SaaS properties, even some of our cloud properties, we’ve really gone through a process of effectively retooling to take advantage of this containers environment,” Considine adds. “It really has been good for us internally, helping us chart the roadmap and then work with our customers to take them through that application modernisation in that container journey.”

The earnings report meant another marker in the continual ‘cloud wars’ discussion. Like a lot of things, it depends on what you call cloud. For cloud infrastructure services, AWS is the clear winner. In fact, some may argue, it won a long time ago.

As AWS passed $5 billion in quarterly revenues earlier this month, Synergy Research, a long time tracker of cloud infrastructure figures, described the market leaders as setting ‘a fierce pace.’ According to the analyst firm’s figures, AWS has approximately the same level of market share as its four nearest competitors combined – Microsoft, IBM, Google and Alibaba – and continues to grow.

Yet there is more to cloud than infrastructure. This is the view that Bob Evans, formerly chief of communications at SAP and Oracle and now a strategic comms advisor, holds. Writing a regular column for Fortune, Evans posits that Microsoft is the real leader – taking into account infrastructure, software, platform and more – ahead of Amazon and IBM. For the most recent quarter, Evans argues that IBM was ‘a huge winner on multiple fronts’.

“The narrative – and it is dead wrong – repeated relentlessly and tirelessly by many in the media and amplified by some analysts that Amazon is the runaway winner in the cloud is baseless, sloppy and terribly misleading,” wrote Evans. “It’s time for that long-running string of extremely fake news that ‘Amazon rules the cloud’ to come to an end.”

So how does IBM see this ‘cloud wars’ narrative? Considine says he understands the issues with analysis when some companies obfuscate their definition of cloud, or what goes in which revenue bucket. Ultimately however, it all comes down to the investment in emerging technologies.

“Here’s the trick: for us, we are the enterprise cloud,” says Considine. “And this investment we’ve made in the technologies, in the underlying infrastructure… [there’s] huge growth this year in our infrastructure both in geographic and capacity expansion, but as well as new features and the rate of delivering new features.

“These are just fundamental things that pile on to deliver the capabilities we need – but these are focused in really providing solutions for the enterprises, and then helping them make this transformation.”

Serverless computing, APIs and blockchain are all going to shape the cloud landscape in 2018 and beyond, according to the latest State of the Cloud report from Bessemer Venture Partners.

The influential annual report, the fourth of its kind, takes a look at the state of investments, IPOs and future trends in the cloud realm. The cloud IPO market recovered somewhat in 2017 compared to 2016’s slump, with Okta, Cloudera and MongoDB among the companies taking the plunge – yet still below historical averages, according to Bessemer.

The portents however are good for future entrants, as there are now almost as many private cloud unicorns – companies valued at more than $1 billion – as public. Private unicorns include Slack, DocuSign and Stripe – all companies who have scored highly on the Forbes 100 top private cloud companies ranking. Another traditionally high performer, Dropbox, has already confidentially filed for IPO this year – if reports are to be believed.

Regarding the rise of serverless computing, Bessemer argues it is being driven by three macro trends; Docker making containers more developer-friendly, more, scalable APIs, and open source becoming more available and accepted. As regular readers of this publication will note, containers have been frequently in the news this year already, from Cisco launching its Kubernetes package and Red Hat acquiring CoreOS.

As far as blockchain is concerned, Bessemer cites various examples of organisations in different industries using the technology. The food industry has participants in the shape of Unilever, Dole and Nestle, while aviation has Lufthansa, Airbus and AirFrance and retail Walmart and Alibaba.

The latter can be seen as focus for another trend the report covers; that of the cloud ‘being flat’. Alibaba – whom Synergy Research among others have placed among the leaders in cloud infrastructure – is cited alongside the likes of Huawei, Atlassian and Adyen as examples of companies outside the US pushing the envelope.

Ultimately, however, whatever technological trends 2018 will bring, it’s all about the balance sheet. As Byron Deeter, partner at Bessemer, explains, “the cloud computing revolution has changed the way we value companies and approach investment opportunities.” As the company said last year, it expects good companies to grow from $1 million to $10m in annual recurring revenue (ARR) in four years, but the best companies can do it in two years.

You can check out the full presentation here.

More than four in five small businesses (81%) say they pay for their cloud storage, representing an increase of 10% over the last three years, according to new data from B2B research firm Clutch.

The study, which polled 300 IT decision makers at US small businesses who use cloud storage, aimed to examine what small businesses need to know when looking for a storage provider, as well as how vendors can better market their tools to small businesses.

The figures show that even small businesses who got on board with cloud storage last year would be seen as laggards; 63% of respondents adopted cloud storage in 2015 or earlier.

The main benefits of cloud storage according to survey respondents are wide-ranging, from access to data, cited by 29% of those polled, to data security (20%) and ease of access in sending and receiving large files (18%). This may be small beer to many organisations, but it seems to be effective if the figures about more businesses paying for their cloud storage are anything to go by.

Organisations are most likely to pay between $51 and $250 per month, with this option cited by 38% of respondents. 23% said they paid between $251 and $1000, with 9% saying they paid more than $1000 per month.

Naturally, while security is always the number one challenge, for smaller businesses price is significant as well. The report notes how, for some small businesses, their only reason to move data to the cloud is to use it as an archive. Almost two thirds (65%) say they want to use the cloud as an archive in some capacity, with 28% of respondents saying they only plan to use cloud storage for archiving.

The report advocates cold storage offerings, such as Amazon Glacier or Google Coldline, as a cost-effective alternative. “If you are looking between a backup solution or a collaboration solution, the collaboration solution is more expensive. The backup is cheaper,” said Istvan Lam, CEO of Tresorit.

Ultimately, however, the report advocates that cloud storage is key for small businesses, but only if utilised efficiently. “Small businesses place emphasis on cloud storage security, and the cloud’s ability to offer flexible and fast access to data. Yet small businesses may not be using cloud storage most effectively in terms of cost or brands,” the report concludes.

“Businesses should place data that is infrequently accessed in a cheaper long-term backup solution,” it adds. “Furthermore, small businesses should ensure the brand of cloud storage they use offers the reliability and security they need.”

This is the latest in a series of studies Clutch has put together on small businesses and cloud computing. As this publication reported in November, a previous study argued organisations were ‘confident’ about cloud storage security, yet many did not follow industry standards.

You can read the full report here.