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Two reports have hit this publication’s inbox around the ‘state of the cloud’ in recent days; a study from RightScale argues the market is growing at a solid clip, while the summary from Bessemer Venture Partners’ (BVP) Byron Deeter found an industry which struggled at the start of 2016 but has since roared back.

While both reports differ – RightScale focuses on the adoption and vendors, while Deeter looks almost exclusively at the financial angle – there are common threads. Here, we look at the standout takeaways from both studies:

IPOs down but M&A skyrockets

Deeter affirms a point this publication has previously been making; IPOs in the cloud space have run dry. The total figure of five – Twilio, the standout, alongside Blackline, Coupa, Apptio and Everbridge – is the lowest since the financial crisis of 2008. Yet this, compounded with the resurgence of the industry towards the end of last year, means a huge amount of merger and acquisition activity as companies jockey for position.

Companies acquired represent 40% of the $300 billion market cap, including LinkedIn, bought by Microsoft, NetSuite, bought by Oracle, and AppDynamics, acquired by Cisco just last month:

The top 100 private cloud companies, as noted by Forbes in September with Slack, Dropbox and DocuSign at the summit, represents more than $100 billion of private enterprise value alone, Deeter adds.

AWS stays flat while Microsoft builds momentum

RightScale’s report interviewed more than 1000 technology professionals, across a wide range of industries, and covered the full gamut, from vendors, to DevOps tools, to multi-cloud strategy. Regarding the IaaS race, the report found that while Amazon Web Services (AWS) usage stayed the same year over year used by 57% of respondents, Azure went up from 20% to 34%.

This is a trend which has been apparent for several months, from Microsoft edging their way ahead of the pack and clearly into second place, to the gargantuan share of Amazon slightly being eaten away. AWS posted $3.5bn in revenue for the most recent quarter, up from $3.2bn in Q3.

As Synergy Research put it in their analysis earlier this month, a few cloud providers are growing at ‘extraordinary’ rates yet AWS ‘has no intention of letting its crown slip’. According to those polled, 41% of workloads on average run in the public cloud compared to 38% in private – although this number still marginally favours private when it comes to enterprises – with overall private cloud usage falling from 77% to 72% of respondents year on year.

On another note, Workday, one of the key bellwethers in Deeter’s market cap analysis – and particularly so given LinkedIn’s acquisition – migrated over to AWS as its preferred public cloud supplier back in November.

Follow Dropbox and Slack’s lead if you want to grow

As this publication reported earlier this month, Dropbox announced it had become the fastest SaaS company to hit the $1 billion revenue run rate threshold. Unlike its contemporary Box, Dropbox is ‘not in any rush’ to go public any time soon, according to a Business Insider report. Yet a slide from BVP argues this is ‘the new growth standard’.

Looking further down the scale, BVP argues that if you want to be the best, your company needs to take no more than two years to get to $10m in annualised run rate, and five years to move to $100m. Part of this is down to the astonishing growth of Slack (below):

A report from Okta in January analysing enterprise applications described the company’s outlook as ‘nothing short of jaw-dropping’. One executive this reporter spoke with – formerly of Microsoft’s parish – said there may be an element of not using Microsoft products because of the brand heritage and thinking ‘what is another enterprise tool which isn’t based around email but around communications…oh, Slack’ about its success, although adding the company had “done extremely well [with a] useful product.”

DevOps salad days and skills gap challenges

RightScale found that 30% of enterprise respondents are today adopting DevOps throughout the whole company; a number which went up from 21% this time last year. Docker, with 35% of the vote, was the most popular tool, ahead of Chef (28%), Puppet (28%), and Kubernetes (14%).

The question of DevOps and how organisations are doing it usually leads to concerns over a lack of skills to be able to realise their implementations. Going against the grain of other recent research, fewer RightScale survey respondents in 2017 said lack of resources and expertise was their biggest challenge, down to 25% from 32%.

According to a report from Claranet earlier this month, financial services organisations are the trailblazers when it comes to DevOps, while Robert Half Technology found that almost three quarters of UK CIOs polled frequently encounter IT professionals who were not up to their needs.

You can find out more about the RightScale report here, and the BVP report here.

Main picture credits: Bessemer Venture Partners

(c)iStock.com/danleap

Nutanix is the leading vendor for converged infrastructure ahead of Hewlett Packard Enterprise (HPE) and Cisco, while the latter two and Dell are jostling for prime position in the server space, according to a report from 451 Research.

The figures, which appear in the analyst firm’s most recent Voice of the Enterprise study, argues that server spending remains ‘steady’ despite enterprises continuing to move workloads to the cloud; almost half (49.4%) of those polled say they are undergoing IT transformation initiatives of some kind. Yet respondents also note that server vendors ‘could work to better understand customers’ business’.

Customers were asked to rate vendors prior to purchase – which 451 calls the ‘promise’ stage – and following implementation, or the ‘fulfilment’ stage. For x86 servers, Cisco outranked its competition in various attributes, including reputation, long-term viability, product performance, and technical innovation, yet was behind Dell and HPE in what might be the mitigating factor – cost.

For converged infrastructure, Nutanix was top of the tree by virtue of all bar one of its ‘fulfilment’ ratings exceeding its respective ‘promise’ rating. Other above average performers for ‘fulfilment’ were HPE, Cisco, Microsoft, and NetApp.

“There is a clear opportunity for server vendors to guide customers into next-generation technologies while preserving their current distribution of standard infrastructure,” said Christian Perry, 451 research manager. “As compute infrastructure choices expand beyond traditional servers, customers are more critical than ever about their x86 servers because they must provide a better ROI than competing x86 servers, cloud services and converged infrastructure.

“To seize this opportunity, vendors must work more closely with customers and prospects to understand current and future business requirements,” Perry added.

You can find out more about the report here (registration required).

(c)iStock.com/danleap

Nutanix is the leading vendor for converged infrastructure ahead of Hewlett Packard Enterprise (HPE) and Cisco, while the latter two and Dell are jostling for prime position in the server space, according to a report from 451 Research.

The figures, which appear in the analyst firm’s most recent Voice of the Enterprise study, argues that server spending remains ‘steady’ despite enterprises continuing to move workloads to the cloud; almost half (49.4%) of those polled say they are undergoing IT transformation initiatives of some kind. Yet respondents also note that server vendors ‘could work to better understand customers’ business’.

Customers were asked to rate vendors prior to purchase – which 451 calls the ‘promise’ stage – and following implementation, or the ‘fulfilment’ stage. For x86 servers, Cisco outranked its competition in various attributes, including reputation, long-term viability, product performance, and technical innovation, yet was behind Dell and HPE in what might be the mitigating factor – cost.

For converged infrastructure (above), Nutanix was top of the tree by virtue of all bar one of its ‘fulfilment’ ratings exceeding its respective ‘promise’ rating. Other above average performers for ‘fulfilment’ were HPE, Cisco, Microsoft, and NetApp.

“There is a clear opportunity for server vendors to guide customers into next-generation technologies while preserving their current distribution of standard infrastructure,” said Christian Perry, 451 research manager. “As compute infrastructure choices expand beyond traditional servers, customers are more critical than ever about their x86 servers because they must provide a better ROI than competing x86 servers, cloud services and converged infrastructure.

“To seize this opportunity, vendors must work more closely with customers and prospects to understand current and future business requirements,” Perry added.

You can find out more about the report here (registration required).

(c)iStock.com/RyanKing999

Financial services firms are embracing DevOps approaches and best practices more quickly than other industries, according to new research from managed services provider Claranet.

The study, put together in conjunction with Vanson Bourne and polling 900 end user IT leaders across European mid-market businesses, found almost half (45%) of finance companies polled had already developed a DevOps approach. This compared favourably against other industries, such as retail, software, and media, for whom the highest figure was only one third (32%).

The report’s findings also indicated financial firms were not done with their implementations; only 12% of those in finance said they were either not planning to implement DevOps or had not made a decision, compared with 25% of the overall sample.

Michel Robert, Claranet UK managing director, said other industries should look to finance’s lead. “Fintech startups are using technology to shake things up in the financial services industry with a customer-centric, agile approach,” said Robert. “For the big incumbents in the industry, the adoption of DevOps suggests a change in mindset and is likely being used as a way of taking on these startups and learning from their innovations.

“Despite being encumbered by legacy IT approaches and siloed data, as well as strict regulatory and security necessities, the financial services industry is ahead in the DevOps game,” Robert added. “This demonstrates that DevOps is not only capable of speeding up development time, but is also an approach that prioritises application and data security – a factor that is closely monitored in financial services.”

Plenty of research has taken place in recent weeks to dissect the current landscape, with a variety of opinions being proffered. A study from F5 Networks last month argued that while numbers go up across the board, only one in five respondents said DevOps had a strategic impact on their organisation, while a similar study from Clutch found that while 95% of respondents were looking at using DevOps methodologies, agreeing on a specific definition proved more difficult.

(c)iStock.com/RyanKing999

Financial services firms are embracing DevOps approaches and best practices more quickly than other industries, according to new research from managed services provider Claranet.

The study, put together in conjunction with Vanson Bourne and polling 900 end user IT leaders across European mid-market businesses, found almost half (45%) of finance companies polled had already developed a DevOps approach. This compared favourably against other industries, such as retail, software, and media, for whom the highest figure was only one third (32%).

The report’s findings also indicated financial firms were not done with their implementations; only 12% of those in finance said they were either not planning to implement DevOps or had not made a decision, compared with 25% of the overall sample.

Michel Robert, Claranet UK managing director, said other industries should look to finance’s lead. “Fintech startups are using technology to shake things up in the financial services industry with a customer-centric, agile approach,” said Robert. “For the big incumbents in the industry, the adoption of DevOps suggests a change in mindset and is likely being used as a way of taking on these startups and learning from their innovations.

“Despite being encumbered by legacy IT approaches and siloed data, as well as strict regulatory and security necessities, the financial services industry is ahead in the DevOps game,” Robert added. “This demonstrates that DevOps is not only capable of speeding up development time, but is also an approach that prioritises application and data security – a factor that is closely monitored in financial services.”

Plenty of research has taken place in recent weeks to dissect the current landscape, with a variety of opinions being proffered. A study from F5 Networks last month argued that while numbers go up across the board, only one in five respondents said DevOps had a strategic impact on their organisation, while a similar study from Clutch found that while 95% of respondents were looking at using DevOps methodologies, agreeing on a specific definition proved more difficult.

(c)iStock.com/john shepherd

Organisations in the UK are among the least likely globally to have a cloud-first strategy, according to a new report from Intel Security.

The study, which polled more than 2,000 senior IT professionals, found the UK had pretty miserable scores across the board compared to their international brethren. The UK’s score of 70% for businesses who are cloud-first – whilst still a reasonable number – lagged behind the global average of more than 80%, while only 7% of UK firms said they stored all of their data in the public cloud, compared with 25% on average globally.

Similarly, the UK lags behind when it comes to having a DevSecOps – development, security, and operations – function in the business, with 28% compared to the 44% global average. As a result, shadow IT practices are likely to be more prevalent; almost three quarters (74%) of UK respondents said their organisation had public cloud services in use which were commissioned outside of the IT department, above the global average of 66%.

“Despite the majority belief that shadow IT is putting the organisation at risk, security technologies such as data loss prevention, encryption, and cloud access security brokers remain underutilised,” Intel noted in an executive summary. “Integrating these tools with an existing security system increases visibility, enables discovery of shadow services, and provides options for automatic protection of sensitive data at rest and in motion throughout any type of environment.”

One of the primary reasons for UK firms being tentative is that old favourite, the skills gap. Almost a quarter (24%) of respondents said that having skilled staff who understand cloud architecture will boost adoption rates. This rings true with similar research from Robert Half Technology earlier this month, which found that three quarters of UK-based CIOs and IT directors regularly encounter IT professionals who they believe are not up to the task.

In terms of global statistics, hybrid cloud usage increased from 19% to 57% of respondents year on year, while organisations using only private cloud dropped from 51% to 24%.

You can read the full report here (registration required).

(c)iStock.com/john shepherd

Organisations in the UK are among the least likely globally to have a cloud-first strategy, according to a new report from Intel Security.

The study, which polled more than 2,000 senior IT professionals, found the UK had pretty miserable scores across the board compared to their international brethren. The UK’s score of 70% for businesses who are cloud-first – whilst still a reasonable number – lagged behind the global average of more than 80%, while only 7% of UK firms said they stored all of their data in the public cloud, compared with 25% on average globally.

Similarly, the UK lags behind when it comes to having a DevSecOps – development, security, and operations – function in the business, with 28% compared to the 44% global average. As a result, shadow IT practices are likely to be more prevalent; almost three quarters (74%) of UK respondents said their organisation had public cloud services in use which were commissioned outside of the IT department, above the global average of 66%.

“Despite the majority belief that shadow IT is putting the organisation at risk, security technologies such as data loss prevention, encryption, and cloud access security brokers remain underutilised,” Intel noted in an executive summary. “Integrating these tools with an existing security system increases visibility, enables discovery of shadow services, and provides options for automatic protection of sensitive data at rest and in motion throughout any type of environment.”

One of the primary reasons for UK firms being tentative is that old favourite, the skills gap. Almost a quarter (24%) of respondents said that having skilled staff who understand cloud architecture will boost adoption rates. This rings true with similar research from Robert Half Technology earlier this month, which found that three quarters of UK-based CIOs and IT directors regularly encounter IT professionals who they believe are not up to the task.

In terms of global statistics, hybrid cloud usage increased from 19% to 57% of respondents year on year, while organisations using only private cloud dropped from 51% to 24%.

You can read the full report here (registration required).

Picture credit: SAP

German software giant SAP has unveiled its roadmap for the ‘next generation’ of cloud-based enterprise resource planning (ERP) with the latest release of SAP S/4HANA Cloud.

S/4HANA, SAP’s public cloud offering which was originally released towards the end of 2015, is being updated with a new architecture of in-memory in combination with contextual analytics, digital assistant capabilities and machine learning, according to the press materials.

In other words, SAP is aiming to add a bit of artificial intelligence (AI) goodness to ERP, helping customers to adjust and adopt business processes based on real-time data and insight. S/4HANA is promoted as a product which allows organisations to embrace cloud computing at their own pace, from specific line of business functionality to efforts which entail the whole enterprise.

“Decades ago, SAP invented and became the leader in first-generation ERP. Later, we were early to build first-generation cloud ERP along with other new cloud vendors,” said Darren Roos, president of SAP S/4HANA Cloud in a statement. “While many cloud ERP vendors remain on this early architecture, SAP did not stop there, and invested in innovating the next generation of cloud ERP.

“SAP S/4HANA Cloud encompasses the latest architecture and technology innovations, along with SAP’s proven set of business management expertise to usher in a true new generation of intelligent ERP in the cloud,” Roos added.

Writing for this publication earlier this month, Stephan Romeder, general manager of Magic Software, argued the importance of flexibility for ERP success today. “There is always the need to modify and expand ERP systems,” he wrote. “Planning ahead to include the necessary flexibility, and using solutions that are fully interoperable is the best way to be prepared for new data, security and reporting requirements that come with digital transformation.”

SAP is not stopping there, however. Among the key points of its roadmap for future cloud ERP innovation are setup wizards which will be enhanced with machine learning capabilities, further integration between clouds, as well as plans down the road for blockchain and Internet of Things (IoT) integration.

You can find out more here.

Read more: SAP aims to succeed in the cloud – but can it be the next IoT giant?

Picture credit: SAP

German software giant SAP has unveiled its roadmap for the ‘next generation’ of cloud-based enterprise resource planning (ERP) with the latest release of SAP S/4HANA Cloud.

S/4HANA, SAP’s public cloud offering which was originally released towards the end of 2015, is being updated with a new architecture of in-memory in combination with contextual analytics, digital assistant capabilities and machine learning, according to the press materials.

In other words, SAP is aiming to add a bit of artificial intelligence (AI) goodness to ERP, helping customers to adjust and adopt business processes based on real-time data and insight. S/4HANA is promoted as a product which allows organisations to embrace cloud computing at their own pace, from specific line of business functionality to efforts which entail the whole enterprise.

“Decades ago, SAP invented and became the leader in first-generation ERP. Later, we were early to build first-generation cloud ERP along with other new cloud vendors,” said Darren Roos, president of SAP S/4HANA Cloud in a statement. “While many cloud ERP vendors remain on this early architecture, SAP did not stop there, and invested in innovating the next generation of cloud ERP.

“SAP S/4HANA Cloud encompasses the latest architecture and technology innovations, along with SAP’s proven set of business management expertise to usher in a true new generation of intelligent ERP in the cloud,” Roos added.

Writing for this publication earlier this month, Stephan Romeder, general manager of Magic Software, argued the importance of flexibility for ERP success today. “There is always the need to modify and expand ERP systems,” he wrote. “Planning ahead to include the necessary flexibility, and using solutions that are fully interoperable is the best way to be prepared for new data, security and reporting requirements that come with digital transformation.”

SAP is not stopping there, however. Among the key points of its roadmap for future cloud ERP innovation are setup wizards which will be enhanced with machine learning capabilities, further integration between clouds, as well as plans down the road for blockchain and Internet of Things (IoT) integration.

You can find out more here.

Read more: SAP aims to succeed in the cloud – but can it be the next IoT giant?

The AI Expo world series brings together developers and enterprises to examine the future of artificial intelligence (AI) and how it can drive business in 2017 and beyond. Find out more here.

(c)iStock.com/RonBailey

Microsoft has announced the launch of the Azure IP Advantage program to help protect intellectual property from ‘patent trolls’ in the cloud.

Patent trolls, defined by the Electronic Frontier Foundation (EFF) as companies or people who ‘use patents as legal weapons, instead of actually creating any new products or coming up with new ideas’, are becoming an increasing problem with code and products hosted on cloud servers.

As a result, Microsoft is making 10,000 of its patents available to customers who use Azure services as something of a protection racket; the patents are ‘broadly representative of Microsoft’s overall patent portfolio and are the result of years of cutting-edge innovation’, according to the company.

Picture credit: Microsoft

Brad Smith, Microsoft president and chief legal officer, cited in a company blog post a Boston Consulting Group article which argued that there was a 22% rise in US cloud-based IP lawsuits over the past five years.

“Our goal is to help foster a community that values and protects innovation and investments in the cloud,” Smith wrote. “We want software developers to be able to focus on coding, and businesses and enterprises to be able to respond to the changing needs of their customers with agility without worrying about lawsuits.

“It’s a goal that we believe deserves more attention than it has received to date,” Smith added.

This naturally comes at a price, however; Azure customers eligible for patent protection must be spending more than $1,000 per month over the past three months and have not filed a patent infringement lawsuits against another Azure customer for their Azure workloads over the past two years. Only patent litigations after February 8 are part of the package, meaning companies currently fighting lawsuits and who see this as a get out of jail card are out of luck.

“We take seriously our responsibility to make sure the cloud is used for good, and we stand with our customers to protect them against intellectual property risk,” added Smith. “In partnership with our customers, we are committed to creating an ecosystem where developers, entrepreneurs, enterprises and customers can innovate with confidence.”

You can find out more here.