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Microsoft has overtaken Salesforce to become the leading software as a service (SaaS) vendor despite a fragmented market, according to the latest note from Synergy Research.

The analyst firm, which extensively covers cloud software and infrastructure markets, argues that with the latest Q2 data to hand, the global enterprise SaaS market grew by 33% year on year to hit more than $11 billion (£8.3bn) in quarterly revenues.

The space is divided up by Synergy into several buckets. Collaboration, the largest segment, grew by 37% and has Microsoft, Cisco, and Citrix as leaders. Perhaps surprisingly, the analysts see the ERP market as the quickest growing, by 49% year on year and Oracle, SAP and NetSuite as the leaders.

The former was acquired by the latter for $9.3bn in July, and at the time, Synergy chief analyst John Dinsdale argued the move would help bolster Oracle’s play in ERP, as well as CRM, although still being behind Microsoft and Salesforce. CRM is considered by the analysts as the smallest segment, behind HR and human capital management (HCM), of which the leaders are ADP, Workday, and Ultimate Software, system infrastructure SaaS, with IBM, SAP and Oracle leading the way, and a more general bucket for other enterprise apps.

Dinsdale argues that with this analysis, the widely thought concept of the ‘born in the cloud’ companies biting at the heels of the established legacy software vendors may be something of a misnomer. “In SaaS a big battle is playing out between the traditional broad-based software vendors and companies that are focused on a specific application or industry sector, many of which are entirely cloud based,” he said.

“It might be tempting to assume that the latter camp are leading the charge, but in fact the traditional software vendors are growing their SaaS revenues more rapidly, helped by their huge base of on-premise software customers that can be aggressively targeted for conversion to a SaaS consumption model,” Dinsdale added.

(c)iStock.com/Alex Sava

A study from IBM has revealed a major increase in organisations having fully integrated cloud initiatives – but the cloud is not used for everything.

78% of the survey respondents, in the study of 1,000 C-suite executives entitled ‘Tailoring hybrid cloud: Designing the right mix for innovation, efficiency and growth’, say their cloud initiatives are fully integrated or coordinated, up from 34% in 2012. Among high performing organisations, this number rises further to 83%.

In terms of adopting hybrid cloud solutions, the key drivers are lowering the total cost of ownership (54%), facilitating innovation (42%), improving operational efficiencies (42%) and more readily meeting customer expectations (40%). Companies undertaking cloud initiatives said they were most likely to expand into new industries (76%), as well as creating new revenue sources (71%) and supporting new business models (69%).

“Enterprises are moving to the cloud, especially hybrid cloud, faster than anyone expected to support their digital transformation, drive business model innovation and fuel growth,” said Marie Wieck, general manager of middleware at IBM. “As clients continue to reap the benefits of integrating their on-premises infrastructure with the cloud, we see them increasing their investments in new workloads on public clouds.

“Successful clients have integrated plans to place workloads where they fit best, and IBM’s hybrid cloud strategy provides this on-ramp for flexibility and growth,” Wieck added.

In the study, IBM recommended three actions for businesses to drive competitive advantage through cloud adoption. Organisations need to deepen their understanding of the business implications and the financial cases of cloud and then use that knowledge from there, as well as better manage the complexity of multiple cloud ecosystem partners, and establish strict control policies.

IBM’s various partnerships have hit the headlines this week. At the VMworld event in Las Vegas VMware announced an update and the continuation of its deal with IBM, noting that more than 500 new clients, including Marriott International and Monitise, were running VMware’s software on IBM’s cloud. Meanwhile, when cloud storage firm Box announced its latest financial results, the company’s partnership with IBM, launched last year, was cited as a contributing factor in eight ‘six figure’ deals.

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Enterprise cloud storage firm Box has reported record quarterly revenue of $95.7 million (£72.1m) for Q217, as well as billings of $106.5 million.

The figures show a business which is edging closer to profitability. Free cash flow in the second quarter was negative $8m compared with negative $39.8m this time last year, while GAAP operating loss totalled 40% of revenue at $37.9m, compared to $49.8m and 68% of revenue in Q216.

Among the customer wins for Box in the quarter were Electronic Arts, Pfizer and Uber, while CEO and co-founder Aaron Levie cited the importance of the deal with IBM struck last year in building company momentum.

In prepared remarks to analysts, as transcribed by Seeking Alpha, Levie explained: “As businesses use more and more applications to get their work done, we want to ensure that our customers can get access to their most important content from wherever they are.

“We continue to gain traction with IBM,” he added. “IBM played a role in eight six figure deals that were closed in the quarter. Customers are seeing the potential of leveraging…both Box and IBM products together.”

Among these customers were a ‘major financial institution’, as well as a ‘major retailer’, who opted for Box via IBM because they “recognised the long-term advantages of using Box with IBM products.” Levie also noted the ‘significant dividends’ of Box’s partnership with Microsoft.

“We achieved record revenue in the second quarter while delivering cash from operations of negative $5 million, a $17 million improvement from a year ago,” said Dylan Smith, Box co-founder and CFO. “These results demonstrate our ability to capture the natural leverage we have in our business model while continuing to grow at a rapid rate.”

Box has had a particularly busy week, not only issuing its financial results but also the acquisition of data visualisation platform Wagon, as well as announcing another customer win in the form of market intelligence firm Ipreo.

You can read the full Box IR release here.

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Cloud storage provider Dropbox has said the password reset measures the company put in place has prevented any hacking of user data, following revelations made in stories which argued that millions of account details had been accessed.

Certain Dropbox users received an email from the cloud storage provider earlier this week advising that if their account password was the same as before mid-2012, they will be prompted to change it the next time they sign in.

A blog post at the time from Patrick Heim, Dropbox head of trust and security, said it was done “purely as a preventative measure”. Yet according to a Motherboard story citing an anonymous Dropbox employee, as well as being vetted by other publications, the number of credentials taken from 2012 total more than 68 million.

Troy Hunt, a security expert who curates the ‘Have I been pwned?’ service, also obtained a copy of the data, and trawled through it finding not only his details – although his password had been changed well after the purported breach – but his wife’s.

Given her password had not been changed since April 2012, and that she uses a password manager, Hunt put two and two together. “There is no doubt whatsoever that the data breach contains legitimate Dropbox passwords – you simply can’t fabricate this sort of thing,” Hunt wrote.

Heim said in a statement today: “This is not a new security incident, and there is no indication that Dropbox user accounts have been improperly accessed. Our analysis confirms that the credentials are user email addresses with hashed and salted passwords that were obtained prior to mid-2012.

“We can confirm that the scope of the password reset we completed last week did protect all impacted users,” Heim added. “Even if these passwords are cracked, the password reset means they can’t be used to access Dropbox accounts. The reset only affects users who signed up for Dropbox prior to mid-2012 and hadn’t changed their password since.”

So what does this mean for users? David Emm is principal security researcher at Kaspersky Lab. He argues the importance of the ‘positive impact’ the EU General Data Protection Regulation (GDPR) could bring to the situation, but sounds a note of caution.

“Organisations should prepare on the basis that hackers will get in,” Emm said. “It’s therefore positive that we’re starting to see a shift from organisations using defensive strategies towards being better prepared.

“Dropbox hashed and salted passwords, and immediately gave advice to consumers, recommending that they change their passwords as a precaution. We know that many people use the same password across multiple online accounts, so it’s important that those affected take steps to change their password for other online accounts where they have used the same password”, added Emm.

“While Dropbox accounts are protected, affected users who may have reused their password on other sites should take steps to protect themselves on those sites,” said Heim. “The best way to do this is by updating these passwords, making them strong and unique, and enabling two-step verification.

“Individuals who received a notification from Dropbox should also be alert to spam or phishing,” he added.

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Almost three quarters of survey respondents in a study conducted by Unisys believe that it is ‘critical’ or ‘very important’ for organisations to modify IT processes and resources to support a digital business model.

The survey, which polled 175 IT and business executives in the US and Europe, examined the effect of social, cloud, mobility, data analytics, the Internet of Things, and security on driving new business models. 88% of respondents say data security in the cloud is a top priority for competing in the digital world, while more than half (55%) of organisations’ applications are already deployed in a cloud environment.

The overall sense of the report was that organisations were seeing positive results from their cloud and digital initiatives. As data security is a priority, one of the more interesting aspects is with regards to improvements over the past 12 months; 56% said data security had gone up, compared to greater user experience with applications and services (44%), IT efficiency (42%) and infrastructure performance (41%).

Similarly, organisations need to be more agile to better compete, the research argues. Only 15% of companies polled say they have the ‘extremely flexible’ and ‘nimble’ attributes required to take full advantages of the opportunities of digital.

“Digital business is all about finding innovative ways to empower workers and customers,” said Steve Nunn, vice president of cloud and infrastructure services at Unisys. “The organisations that will prosper in the new order are those that most quickly become focused, proficient and flexible in integrating and securing the cloud, IoT, and other key digital technologies to drive new levels of service.

“This research points the way for organisations to become more nimble and successful in capitalising on present and future business challenges,” Nunn added.

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With the latest VMworld event kicking off in Las Vegas, end user computing giant VMware came prepared with a litany of news releases. Yet the news was more of an update than anything completely new; an extension of the company’s hybrid cloud strategy, as well as the continuation of a partnership with IBM.

Back in February last year, this reporter penned a piece arguing why VMware hadn’t left it too late with its hybrid push. The new release of the VMware Cloud Foundation, utilising what it calls ‘cross-cloud architecture’ which allows users to manage applications running in private and public clouds and across multiple vendors, promises “huge strides in helping customers transform into digital businesses.”

“All business is digital business,” said Pat Gelsinger, VMware CEO in the opening keynote. “There is no longer a meaningful distinction – and every industry and every core business process is becoming driven by digital, being driven by the cloud.”

This discussion was précised by a series of stats – essentially, the history of cloud computing as VMware saw it – as well as a spot of future-gazing. We didn’t go as far back as the AT&T video from 1993 which was certainly one of the earliest instances of the word ‘cloud’ in its current technological guise, but we did hear a snippet of speech from former Google CEO Eric Schmidt dating from 2006, where VMware argued that 98% of workloads ran on traditional IT – the 2% which didn’t was “largely” from Salesforce. Fast forward to 2016 and that number stands at 73%, with 15% and 12% for public and private cloud respectively.

According to VMware, 2021 will be the year when 50% of workloads will be in the cloud, and 2030 the year when public cloud will reach the dominant share. The number of workloads – defined as an operating system instance – will go up from 29 million in 2006 to almost 600 million by 2030.

VMware’s vision for the leading and lacking businesses. Picture credit: VMware

For the time being, however, we have VMware Cloud Foundation. The press material describes it as a release which “offers a new ‘as a service’ option that delivers the full power of the SDDC (software-defined data centre) in a hybrid cloud environment.”

In other words, VMware aims to be an enabler for businesses running on other, more populous clouds. This is why the future stats, and the message VMware is pushing, is important. If public cloud is expected to become the primary destination for workloads by 2030, then this enterprise as a middleman has a defined shelf life.

Related to this was the partner news, which primarily came through an update on VMware’s work with IBM. Since the partnership was announced in February this year, the companies say that more than 500 new clients are running VMware’s software on IBM’s cloud. The three marquee customers named were Marriott International, Clarient Global LLC, and Monitise. “Our collaboration with VMware is becoming the glue for many organisations to scale and create new business opportunities while making the most of their existing IT investments in a hybrid cloud,” said Robert LeBlanc, SVP IBM’s cloud operation in a statement.

The final aspect of the opening day to note, again looking into the future, was a short chat between Gelsinger and Michael Dell, who spoke of the importance of VMware’s open ecosystem moving forward and a shared focus on making the customer cloud architecture journey easier. Dell, of course, announced its intent to acquire EMC, incorporating into it not only VMware but Pivotal, VCE, ERS, and Virtustream, in October last year.

You can find the main VMware announcements here.

Picture credit: Rackspace Afterparty TechStars Boulder 2011, by Andrew Hyde, used under CC BY / Modified from original

Managed cloud services provider Rackspace is to be acquired by private equity company Apollo Global Management for $4.3 billion (£3.26bn), it has been announced.

“This is a big day for Rackspace,” wrote Taylor Rhodes, Rackspace CEO, in a blog post. “We expect that this transaction will help us better serve our customers in 120 countries, who now include more than half of the Fortune 100.

“It will allow us additional flexibility to enhance the multi-cloud services that today’s customers demand, and to seize the big opportunity that we face as the world’s #1 managed cloud company,” Rhodes added.

The deal’s total $4.3bn value includes the assumption of $43 million of net cash, with shares going at $32.00 each, representing a 38% premium as of August 3 – which Rackspace notes was the last trading day “prior to news reports speculating about a potential transaction.”

Graham Weston, co-founder and chairman of Rackspace, said the move was a result of “diligent analysis and thoughtful strategic deliberations” by the board across many months. “We are confident that as a private company, Rackspace will be best positioned to capitalise on our early leadership of the fast-growing managed cloud services industry,” he said.

As the press material inferred, speculation has been rife for most of the previous month around Rackspace’s future.

Earlier in August, the company sold its Cloud Sites business unit to Michigan-based hosting provider Liquid Web. Speaking to analysts a few days before around Rackspace’s latest financial results – 277 customers on its AWS service over the past nine months with 60% choosing the higher tier option the highlight – Rhodes refused to comment on speculation, but noted that 2017 IT spending growth would “almost certainly” be negative – with Gartner statistics on the Brexit EU referendum vote cited as a possible reason – and that selling “non-core” Cloud Sites would give the company “more focus.”

This story however goes back a bit further. Back in 2014, the company did an abrupt about-turn after considering various M&A options before deciding to carry on alone. Rhodes was named CEO at the same time; Weston had stepped into the breach following the retirement of Lanham Napier six months earlier.

Ian Moyse, a cloud industry leader – and formerly senior sales exec at Rackspace – said the news came as no surprise, and sounded a cautious note around its AWS and Azure services. “Those at the top will have felt pressures to do something different and separate themselves from the shackles of current measurements,” he told CloudTech. “This will give them some breathing space to reshape their market position, but they are going to have to sell an awful lot more of these cheaper third party services at lower resale margins to get anywhere near the results of their past.

“The next 24 months is going to be key to Rackspace to reposition itself in the lucrative cloud and IoT markets,” he added.

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The Cloud Security Alliance (CSA) has today released a mammoth document detailing the 100 best practices in big data security – running the gamut from traditional cybersecurity measures to cutting edge cryptographic technologies.

The document discusses each tip at more of a cursory than comprehensive level, offering a few sentences on why and how organisations should implement them. The report goes through 10 areas with 10 tips for each, from real-time security and compliance monitoring to secure data storage, and endpoint monitoring.

One of the more interesting areas of the report focuses on cryptographic technologies for big data. “Rather than burdensome requirements, there is an increased perception that cryptographic technologies are harbingers of trusted utility for impending advances in information technology,” the report authors explain. “There is a realisation across the industry that cryptographic technologies are imperative for cloud storage and big data.”

As a result, key tips are shared, from constructing a system to search and filter for encrypted data, to implementing identity-based encryption – avoiding issues with public key crypto systems – to utilising ‘oblivious RAM’. By shuffling the memory location after data is accessed, not even cloud service providers can tell which data is which, therefore hiding the access pattern.

“This is an important initiative for the cloud community as new security challenges have arisen from the coupling of big data with public cloud environments,” said J.R. Santos, CSA EVP research. “As big data expands through streaming cloud technology, traditional security mechanisms tailored to secure small-scale, static data on firewalled and semi-isolated networks are inadequate.

“Security and privacy issues are magnified by this volume, variety and velocity of big data. This handbook serves as a comprehensive list of best practices for companies to use when securing big data,” Santos added.

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

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Asana, Greenhouse Software and WalkMe have been ranked as the three best private cloud computing companies to work for, according to a new study from Glassdoor and Battery Ventures.

The study focused on larger, privately held firms, with 200 or more employees, and ranked CEO approval, as well as a ‘positive business outlook’. Participants were asked to rank on a scale between one and five, with 1.0 meaning they were ‘very dissatisfied’, 3.0 signalling ‘okay’, and 5.0 marking ‘very satisfied’.

Productivity app firm Asana came out on top with an overall company rating of 4.9, a 100% approval of CEO Dustin Moskowitz, co-founder of Facebook, and a 99% positive business outlook rating. Enterprise software providers Greenhouse and WalkMe picked up the silver and bronze medals respectively. In total, seven companies polled rated 4.9 out of 5.0 overall – Chef Software, Sprout Social, Grovo, and Procore Technologies – while the former, a Battery client, polled only fourth despite getting 100% in both CEO approval and business outlook.

All of the top 50 companies scored above 4.0 overall, with bigger names at the outside the top seven including Couchbase (4.5, #22), DocuSign (4.4, #24), MongoDB (4.3, #34), and Dropbox (4.1, #47). The latter saw 77% confidence in CEO Drew Houston, with 71% – the lowest in the top 50 poll – for positive business outlook.

“This list provides a window into which private, business-focused cloud companies are generating the most excitement among employees – one key proxy for company health, and part of the broader business trend we see today around transparency on the Internet,” said Neeraj Agrawal, a Battery general partner specialising in cloud investing in a statement. “We look forward to tracking these standouts as they mature, and to watching smaller, up-and-coming cloud startups make the list in future years.”

The report also noted key tenets of employees wanting to work at the highest rated firms; the need to work for ‘mission-driven companies with strong and unique company cultures’, as well as embracing transparency, and teams who regularly and clearly communicate with their employees.

Back in March, this publication posted a list of the top 100 cloud companies and CEOs to work for based again on Glassdoor as well as the latest figures from Computer Reseller News. Including companies across the spectrum, the top performer was Zerto; 95% of employees said they would recommend the disaster recovery and virtual data replication company to a friend.

The full Glassdoor/Battery table can be seen below (companies with asterisks after their name indicate a Battery investment):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Good news if you’re an IT practitioner or manager, particularly in the US, but not so good if you’re a sysadmin; the latest examination of IT salaries from automation and cloud software provider Puppet has found that more than half of IT bods in the US earn more than $100,000 per year, while manager salaries have gone ‘off the chart’.

The latest DevOps salary report, which garnered responses from more than 4,600 IT professionals, argues that the percentage of US managers earning more than $150,000 went up to 43% in 2016, from 26% last year, while 34% of sysadmins earn more than $100,000 – lower on average than other common IT practitioner jobs. The number of IT practitioners earning more than $100,000 has gone up to 58% from 47% over the past 12 months.

IT practitioners earn more in the US than in Australia, New Zealand and Canada, with the most common salary range in the US being $100,000 to $125,000 compared to a lower bracket for the latter three countries.

The research also found that the more servers IT teams manage, the more money you’re likely to earn. The cut-off point appears to be 5,000 servers; those who manage more are on average earning between $100,000 and $125,000, while those who manage less are more likely to be on $75,000 to $100,000.

Nigel Kersten, CIO of Puppet, argued that the survey results reveal the need to hire the best talent. “Today, software is everywhere and is the driver of every business. For organisations to compete in this new world, they need to enable a frictionless delivery of high quality software,” said Kersten.

“This year’s DevOps salary report shows that organisations are realising the pressures of these dynamics and are pushing to hire, retain and manage the best IT teams to gain a strong competitive advantage,” he added.

Previous research has shown the issues associated with tech skills – and how much they cost organisations. A study from Indeed.com earlier this year found that DevOps engineer was the hardest IT job to fill in North America, while the latest State of the Cloud report from RightScale found that DevOps and Docker skill sets continue to rise.