As the true definition of hybrid cloud continues to blur, eight out of 10 enterprises in a survey from Stratoscale say they avoid running sensitive data in the public cloud.

The results appear in the company’s Hybrid Cloud Survey, which was conducted in June and features more than 600 responses from organisations at varying sizes.

According to the research, almost four in five (77%) respondents define the value of the hybrid cloud in one of two ways, depending on how far advanced their adoption is. In enterprises with hybrid cloud adoption level below 20%, hybrid is most frequently defined as ‘the ability to move workloads between private and public cloud’, but as it exceeds 20%, the concept moves to one of ‘different workloads belonging in different public and private environments’.

More than 80% of enterprises polled said they had either moderate or high levels of concern around public cloud lock-in, with the smallest companies – those with less than 100 employees – the most concerned. More than half of enterprises have also moved less than one fifth of their workloads to the public cloud, with smaller firms the furthest into their journey, with large companies having more users who start but a much slower pace of progress.

“The transformation to a ‘digital business’ by implementing cloud services and platforms is no longer much of an option – it’s an imperative for the continued survival of any enterprise,” said Ariel Maislos, Stratoscale CEO in a statement. “The findings from our survey confirm what we’re hearing from our customers – although many have started their journey to the public cloud, the vast majority of companies are still running mission critical workloads and sensitive data in private solutions, primarily for security reasons.

“It’s clear the hybrid cloud model represents the near and long-term future for most enterprises, regardless of size,” Maislos added.

The lack of consensus around the definition of hybrid cloud is reminiscent of a study conducted by Clutch at the start of this year regarding DevOps, where not even a quarter of respondents could agree on a definitive meaning for the term.

Read more: What is the point of hybrid cloud – or, is it time to re-evaluate hybrid?

Rackspace and OVH have announced the openings of new data centres in Frankfurt and London respectively.

The former cited EU and Swiss data protection regulations as part of the reason for its move, while the latter said that ‘in spite of Brexit’ it was still committed to the UK market.

“This marks a significant step forward for OVH in supporting UK customers with a local dedicated gateway into our worldwide network,” said Hiren Parekh, director cloud EMEA at OVH. “We are offering low latency, guaranteed bandwidth and enhanced DDoS protection for all of our customers.” Jeff Cotton, president of Rackspace, said: “Rackspace’s first data centre in Germany marks another key milestone for our DACH portfolio and reflects our investment in the German market.”

The new German data centre means Rackspace will operate 12 worldwide, while OVH is opening its fifth data centre in 12 months, after Australia, Singapore, Poland and Germany.

The two companies have been busy outside of their data centre remits in recent months. In May, Rackspace announced the acquisition of TriCore Solutions, an enterprise app management provider, as well as unveiling their new CEO, former EarthLink boss Joe Eazor. Last month, OVH announced a €400 million (£358.6m) funding round in order to help expand its global strategy.

Also among Rackspace’s recent highlights was announcing a deal with Google Cloud for managed services support, while OVH was named as the top cloud computing vendor in Europe in May in terms of price and performance. 

Amazon Web Services hit $4.1 billion (£3.13bn) in revenue for the most recent quarter, contributing almost 11% of Amazon’s overall revenue, according to the company’s latest financial results.

The figures represent a significant rise from the previous two quarters, where AWS revenue was at $3.54bn and $3.66bn. Run rate for AWS now stands at $16bn, up from $14bn for the last quarter, while overall net sales for Amazon stood at $38.0 billion.

In a conference call with analysts, Brian Olsavsky, Amazon chief financial officer, fielded several questions on the topic of AWS. “We are seeing great customer adoption,” he said, as transcribed by Seeking Alpha. “Our usage in all of our large services are actually accelerating and they’re growing at a rate higher than our revenue growth. So you’re seeing great adoption. We are seeing AWS customers migrate more than 30 databases over the last year and a half.”

Discussing profitability – or rather, how AWS’ operating margin had significantly decreased, to 22.3%, the lowest for at least six quarters – Olsavsky pointed to a 71% increase in assets acquired under capital leases, the majority of which was for Amazon’s cloud arm. “We’ve really stepped up the infrastructure to match the large usage growth and also the geographic expansion – and that is showing up in tech and content,” he said.

As AWS is the only cloud provider out of Amazon, Google and Microsoft to fully disclose its financial figures, it is therefore difficult to fully compare. Google’s ‘other revenue’ bucket, which includes cloud, was at $3.1 billion for the most recent quarter, while Microsoft’s ‘intelligent cloud’ bucket, including Azure among others such as server products, hit $7.43 billion. Google added the number of cloud deals above $500,000 had tripled year over year.

According to a note published by Synergy Research yesterday evening, Amazon managed to gain 1% in market share over the last four quarters in spite of its dominant position, with Microsoft growing 3%, Google 1% and IBM staying steady. This evidently has a knock on for the rest of the market, with the following 10 players – whose combined market share is just over half of Amazon’s – falling 1%, and the rest of the market dropping significantly. As previously, of the second-tier players, Alibaba and Oracle are growing the quickest.

“The increasing dominance of hyperscale players continues to play out, with all four leading companies having cause to celebrate,” said John Dinsdale, a chief analyst and research director at Synergy in a statement. “While Microsoft Azure and Google Cloud Platform are doubling in size, IBM continues to dominate in hosted private cloud and AWS is still over three times the size of its nearest competitor.

“Some of the numbers are actually pretty spectacular,” Dinsdale added. “The year on year market growth rate is nudging down as we expected in such a large market, but it remains at comfortably over 40% and AWS alone generated revenue growth of $1.2 billion over the last four quarters.”

You can take a look at Amazon’s full report here.

Postscript: As reported by multiple sources, the rise in Amazon stock yesterday as the results were announced briefly put Jeff Bezos to the top of the pile as the richest person in the world, ahead of Bill Gates, before shares fell a few hours later putting Gates back on top.

Read more: AWS, Azure, and the state of play right now

Microsoft has joined the Cloud Native Computing Foundation (CNCF), a San Francisco-based organisation aiming at sustaining containers and microservices architectures, as a platinum member.

The Redmond giant joins 14 other companies in the platinum membership category, including Docker, Google – who originally designed Kubernetes before donating it to the CNCF – and IBM.

The foundation’s mission statement is to “create and drive the adoption of a new computing paradigm that is optimised for modern distributed systems environments capable of scaling to tens of thousands of self-healing multi-tenant nodes.”

Microsoft said joining the CNCF was ‘another natural step’ on its open source journey. The company last month joined the Cloud Foundry Foundation as a joint member, paying $100,000 per annum for three years.

“We are honoured to have Microsoft, widely recognised as one of the most important enterprise technology and cloud providers in the world, join CNCF as a platinum member,” said Dan Kohn, CNCF executive director in a statement. “Their membership, along with other global cloud providers that also belong to CNCF, is a testament to the importance and growth of cloud native technologies.

“We believe Microsoft’s increasing commitment to open source infrastructure will be a significant asset to the CNCF,” Kohn added.

Alongside this, Microsoft has announced the launch of Azure Container Instances (ACI), which aims to deliver containers simply and efficiently without the effort of managing virtual machine infrastructure. The company also introduced the ACI Connector for Kubernetes in open source, which enables Kubernetes clusters to deploy to Azure Container Instances. “ACIs are the fastest and easiest way to run a container in the cloud,” wrote Corey Sanders, Azure director of compute, adding it was the first service of its kind.

The product is available in public preview for Linux customers, with Windows support following ‘in the coming weeks’, the company said.

Read more: A comparison of Azure and AWS microservices solutions

Google says it has tripled the number of its big cloud deals year over year as its parent company Alphabet announced revenues of $26 billion (£19.9bn) for the most recent quarter.

In a call with analysts, Google CEO Sundar Pichai – who it was also announced is joining the Alphabet board of directors – discussed the company’s ‘impressive’ cloud assets. “[Google Cloud Platform] continues to experience impressive growth across products, sectors and geographies and increasingly with large enterprise customers in regulated sectors,” he said, as transcribed by Seeking Alpha.

“To be more specific about our momentum with big customers, in Q2 the number of new deals we closed worth more than $0.5 million is three times what it was last year,” Pichai added.

This was about as specific as Pichai got, as Google puts cloud in its ‘other revenue’ bucket, alongside such products as the Google Play app store. Google’s other revenues for Q217 were at $3.1 billion, up 42% from this time last year but seeing a very slight decrease from Q1 this year.

Compared with Amazon, which is now reporting its AWS revenues separately, and Microsoft, which does not give specifics but instead puts revenues for ‘intelligent cloud’, including Azure and server products, it is relatively nebulous.

Yet while a lot of the focus has been on AWS and Azure’s competition in recent weeks – as this publication reported on – analysts have been noting Google’s relative rise. The company still only finds a place in the ‘visionaries’ section for Gartner’s IaaS Magic Quadrant, however its growth remains higher than AWS if not at the same level as Microsoft, according to Canalys.

Google’s overall revenues were at $25.8 billion, with ‘other bets’, such as its autonomous car business, Waymo, at $248 million. Like Microsoft CEO Satya Nadella last week, Pichai focused on the importance of artificial intelligence in the company’s strategy going forward. “Google continues to lead the shift to AI driven computing,” he said. “It’s our focus on infusing our products and platforms with power of machine learning and AI that’s driving our success.”

Among the company’s highlights in the most recent quarter were partnerships with SAP and Nutanix, opening four new cloud regions, with the most recent being in London, as well as the launch of Transfer Appliance, a product aimed at transferring data from local servers into their cloud.

You can digest the full Alphabet results here.

A few headlines in the tech and business press over recent months have attempted to shed light on Microsoft Azure, Amazon Web Services (AWS), and the public cloud.

As reported by The Street last week, Brent Bracelin, senior research analyst at Pacific Crest, wrote: “We estimate that in the second half of this year, Microsoft’s Commercial Cloud segment could surpass Amazon Web Services in absolute revenue, becoming the largest public cloud platform for the first time in 10 years and firmly marking its transition from cloud laggard to cloud leader.”

Later that week, as reported by Business Insider, Deutsche Bank sounded a cautious note towards AWS, moving its price target down from $1,150 to $1,135. While noting the bank remains generally bullish towards AWS, criticism came from a ‘first-ever downtick from partners around the pace of large European enterprise cloud migrations.’

Amazon is expected to disclose its most recent financial results this week, while Microsoft posted overall revenues of $23.3 billion last week, as well as announcing new products in the shape of Microsoft 365 and Azure Stack. So what does all this mean for both companies?

Comparing clouds

First of all, it is important to distinguish between clouds. AWS holds its most significant lead over Microsoft in infrastructure as a service (IaaS). According to Synergy Research figures from October last year, AWS held more than double the market share in public IaaS of Microsoft, Google, and IBM – the three nearest challengers – combined. AWS also holds the lion’s share of the public PaaS (platform as a service) market, although in this instance the combined market share of Salesforce, Microsoft and IBM amounts to slightly more than AWS’ total.

It is in software as a service (SaaS), however, where Microsoft holds the aces. According to more Synergy figures from March this year, Microsoft now leads the ‘burgeoning’ market ahead of Salesforce, with top three placings in collaboration and CRM software. As recently as April last year, again according to Synergy, Salesforce was the market leader, but with only 21% annual growth compared to 70% from Microsoft, and a continued push to the enterprise side, it was not a huge surprise when the overtake occurred.

To put all of these figures into context, Gartner’s analysis of the overall public cloud services market puts SaaS at 18.8% share, ahead of IaaS at 14%, and PaaS at 3.6%. By 2020, those numbers are expected to change to 3.7% for PaaS, 18.7% for IaaS and 19.8% for SaaS.

Comparing revenues

As previously mentioned, Microsoft posted overall fourth quarter revenues of $23.3 billion last week. Yet Bracelin mentioned Microsoft’s ‘commercial cloud’ segment was set to overtake AWS.

Microsoft does not disclose specific product revenues, but instead gives a guide. For IaaS, Azure revenue went up 97% year over year, according to the figures last week, with Office 365 commercial revenues, for SaaS, up 43%.

Here’s where things get a little confusing. Microsoft does not use ‘commercial cloud’ as one of its buckets for financial results. Instead, the company uses the categories ‘productivity and business processes’ – largely the Office 365 portfolio – which hit $8.45bn in the most recent quarter, compared with ‘intelligent cloud’ – largely where Azure and server products sit – at $7.43bn. According to Mary Jo Foley, Azure, Office 365 business services, Dynamics 365, and Enterprise Mobility + Security (EMS) form the lion’s share of ‘commercial cloud’.

AWS, in the most recent quarter, had net sales of $3.66 billion, with Brian Olsavsky, Amazon chief financial officer, telling analysts at the time: “We break out very clearly our AWS segment revenue and operating income, and you’ll also keep in mind that there’s price decreases that are part of the business, and we’re pretty public when we do those. In general, we’re very happy with that team and the progress they’re making.” The overall run rate for AWS, based on that quarter, is approximately $14.6bn.

Apples and apples?

It is no wonder therefore that Melanie Posey, research vice president at 451 Research, tells CloudTech it is ‘tricky’ to compare revenue across the hyperscale cloud providers. “If one broadens the market scope to include SaaS and PaaS…this is probably how you get to Azure surpassing AWS in revenue, but then it’s not really an apples-to-apples comparison,” she explained.

In April, Posey was lead analyst on a study which found that Azure was closing the gap on AWS for infrastructure. In Europe, Azure was cited by 43% of the more than 700 respondents as the primary IaaS provider, compared with 32% for AWS – although globally, the figure for the latter rises to 55%.

Posey says that AWS should not be worried by the various analyst notes, but does identify a couple of ‘could do better’ areas. “AWS could focus more on enterprise engagement,” she said. “For example, it could develop a framework for more solutions-focused engagement with enterprise customers – similar to Google Cloud Platform’s Customer Reliability Engineering program – rather than leaving the customer to figure everything out themselves or building their own partner network for broad-based solutions.”

The real potential, however, could come through Microsoft 365 and Azure Stack. Announced at the Inspire conference earlier this month, Microsoft 365 former brings together Office 365, Windows 10 and EMS to ‘deliver a complete, intelligent and secure solution to empower employees’, while Azure Stack is an ‘extension of Azure’, effectively bringing Microsoft’s cloud into a company’s own data centre.

Javed Sikander, CTO of NetEnrich, a company which does a lot of its work with the Azure platform, puts it this way. “Azure Stack is an interesting offering, and has been in the works for years,” he told CloudTech. “For organisations that want to move to a cloud architecture but cannot move to a public cloud due to privacy, security or governance concerns, Azure Stack is a compelling offering.”

Posey says Azure Stack ‘uniquely bridges the old world and the new’. “No other firm has such a complete offering,” she added. “With Azure Stack, Microsoft is bringing the cloud on-premise rather than taking on-premise to the cloud.”

Microsoft has announced revenues of $23.3 billion (£17.9bn) in its most recent financial quarter – with cloud again at the heart of its success.

This will be something of a familiar story to those who have taken notice of Microsoft’s financials over the past year or so, with CEO Satya Nadella telling analysts that financial year 2017 “all up was a tremendous year of customer momentum with cloud, AI, and digital transformation.”

Microsoft does not disclose specific product revenues but instead gives a guideline; Azure revenue went up 97% year over year, with Office 365 commercial revenues up 43%. The company instead puts its revenues into a few buckets. ‘Productivity and business processes’ – the Office 365 side – was at $8.45 billion over the most recent quarter, an increase of 21%, while ‘intelligent cloud’ – Azure and server products – rose 10% to $7.43bn.

“Our technology world view of an intelligent cloud and an intelligent edge is resonating with businesses everywhere,” Nadella said, as transcribed by Seeking Alpha. “Every customer I talk to is looking for both innovative technology to drive new growth, as well as a strategic partner who can help build their own digital capability. Microsoft is that trusted partner.”

Among the quarter’s highlights for Microsoft included the acquisition of Cloudyn in June, to help Azure customers manage and optimise their cloud usage, as well as joining the open source Cloud Foundry Foundation as a gold member and an expanded partnership with cloud storage provider Box focusing around machine learning. The latter angle was noted by Nadella, who told analysts: “The core currency of any business going forward will be the ability to convert their data into AI that drives competitive advantage.”

Meanwhile, another company whose cloud arm stands out alongside the rest of their results is SAP, who filed yesterday. Revenues for the German software giant were at €5.8 billion (£5.2bn) for Q2, with cloud revenues seeing the biggest growth at 29% to €932 million.

You can read the full Microsoft release here.

Organisations are more likely to prefer storing data in the cloud instead of on a legacy system – but are spending significantly on security to keep up.

That is the latest finding from Clutch, a B2B research firm, which put out the latest report from its annual cloud computing survey earlier this week.

Nearly 70% of the 283 IT professionals polled said they would be more comfortable storing data in the cloud; yet more than half of companies surveyed admitted to spending more than $100,000 per year on additional cloud security features. 22% of respondents spend at least $500,000 on additional cloud security features per year, while 8% spend more than $1 million.

Of the security measures available, additional encryption was the most popular among respondents, while two thirds (65%) of businesses said they follow regulatory standards from the Cloud Security Alliance.

The report also delved into who should do what when it comes to cloud security. As this publication has explored this month, through a report from Barracuda Networks, there appears to be a disconnect among organisations around the shared responsibility model for infrastructure as a service.

Application level controls, identity and access management, and endpoint protection, among others, are the customer’s responsibility, as outlined by both Microsoft and Amazon Web Services (AWS) in their documentation. Clutch argues that the high investment in cloud security is related to the risks that are out of their cloud provider’s control.

“There is suddenly a number of people recognising that application-level security needs to be done by the user, not the vendor,” said Haresh Kumbhani, founder and CEO of cloud consulting provider Zymr. “If this is the case, then they need to invest top dollar in securing the data.”

Almost a quarter (23%) of respondents said they use Internet of Things (IoT) services on the cloud, although when it came to security on top of it – a significant threat, given the frequent global cyberattacks which invariably make the headlines – it was described by Jamie MacQuarrie, co-founder of Appivo, as ‘nascent’. “For every company that properly locks down IoT-enabled machines on a factory floor, you have thousands of unsecured ‘smart’ lightbulbs,” he said.

You can read the full report here.

IBM has issued its financial results for Q217, with revenues down 5% year over year but with its cloud arm leading ‘continued growth in strategic imperatives’.

According to the release (pdf), total revenues were at $19.3 billion (£14.9bn), compared to $20.2bn this time last year. The first half of the year totalled $37.4bn, down from $38.9bn in 2016. IBM said its second quarter cloud revenues were at $3.9 billion, up 15%, with cloud revenues over the last 12 months totalling $15.1bn.

IBM puts its revenues into four primary buckets; cognitive solutions at $4.6bn, global business services, at $4.1bn, technology services and cloud platforms, at $8.4bn, and systems, including systems hardware and operating systems software, at $1.7bn.

“In the second quarter, we strengthened our position as the enterprise cloud leader and added more of the world’s leading companies to the IBM cloud,” said Ginni Rometty, IBM chief executive officer in a statement. “We continue to innovate, adding regtech capabilities to our portfolio of Watson offerings; developing solutions based on emerging technologies such as blockchain; and reinventing the IBM mainframe by enabling clients to encrypt all data, all the time.”

IBM’s focus on blockchain and artificial intelligence (AI) was made abundantly clear at the company’s InterConnect event in Las Vegas in March. Rometty told attendees of her belief that blockchain “will do for trusted transactions what the internet has done for information”, and how quantum computing will solve problems businesses ‘never knew [they] had’.

Signifying the cloud push, the company has also announced the arrival of four new cloud data centres yesterday, with two opening its doors in London and the others in San Jose and Sydney. IBM’s global cloud data centre footprint now sits at almost 60, across 19 countries.

The company name dropped two customers, in the shape of Bit.ly and oilfield services provider Halliburton, with John Considine, general manager for cloud infrastructure services, saying “we continue to expand our cloud capacity in response to growing demand from clients who require cloud infrastructure and cognitive services to help them compete on a global scale.”

Given the continued downturn in overall revenues – revenue falling for the 21st consecutive quarter – analysts would be expected to have a pessimistic outlook. An excoriating note from Jefferies, reiterating ‘underperform’, said that while IBM’s Watson is one of the most complete cognitive platforms, the company is ‘outgunned’ in the war for AI talent and return on investment could be negligible.

Yet writing for Seeking Alpha, Thomas Pangia – a long IBM supporter – argued the company’s declining revenue trend should be a thing of the past by 2019, adding its strong cash flow was also a positive.

Among the highlights for IBM this quarter is buying Verizon’s cloud and managed hosting service, collaborating with Nutanix to help enterprises with hyperconverged deployments, as well as securing a cloudy client win with American Airlines.

Google has opened the doors on its London data centre, joining Brussels as its second European site with more to follow.

The region will have three zones – as is the case with each region, although some initially operate with two – and will offer compute – App Engine, Compute Engine and Container Engine – big data, storage, and networking capabilities for customers.

“Incredible user experiences hinge of performant infrastructure,” wrote Dave Stiver, Google Cloud Platform product manager in a blog post announcing the news. “GCP customers throughout the British Isles and Western Europe will see significant reductions in latency when they run their workloads in the London region.”

The move also plays into Google’s commitment to the General Data Protection Regulation (GDPR) legislation, which is set to come into effect on May 25 next year. In a post from May, the company outlined its compliance specifications, including a number of third part audits and certifications for G Suite and Google Cloud Platform.

The company wheeled out various customers in its announcement, including The Telegraph, WordPress hosting provider WP Engine, and money app Revolut, with Jason Cohen, founder of WP Engine, saying the company is “excited about bringing reduced latency benefits from the ability to store and process data in London to our UK customers.”

With the launch of London, Google now has 10 regions and 30 zones across four continents, with seven more in the pipeline, including the company’s first launch into South America with Sao Paulo. Google is the third of the leading cloud providers – after Microsoft and Amazon Web Services (AWS) – to open a UK centre. Microsoft opened its doors in September last year, with AWS following suit in December.