All posts by Jamie Davies

Azure, Big Data, IoT, Microsoft, News & Analysis, Rolls-Royce

Microsoft and Rolls Royce collaborate to build next-gen intelligent engines

Rolls RoyceMicrosoft and Rolls Royce have announced a new collaboration to bring the next generation of intelligent engines to the aviation industry.

Rolls-Royce will integrate Microsoft Azure IoT Suite and Cortana Intelligence Suite into its service solutions to expand its digital capabilities, particularly around its Totalcare service offering, which aims to improve the lifespan of its assets for customers. The partnership builds on underlying trends within the industrial and manufacturing industry in moving from a reactive to proactive maintenance and repair model, using IoT to detect faults in real-time, but also identifying the tell-tale signs of such faults at industrial scale, prior to them becoming a problem.

“Our customers are looking for ways to leverage the digital landscape to increase efficiency and improve their operations,” said Tom Palmer, SVP of Services and Civil Aerospace at Rolls-Royce. “By working with Microsoft we can really transform our digital services, supporting customer’s right across engine-related aircraft operations to make a real difference to performance.”

At the Hannover Messe event in Germany, both Microsoft and Rolls Royce will demonstrate the new capabilities, including using the Azure IoT Suite to collect and aggregate data from disparate, geographically distributed sources and Cortana Intelligence Suite to analyse the data itself. Data sets will include engine health data, air traffic control information, route restrictions and fuel usage data, with the aim of increasing the assets fuel efficiency, as well as detecting anomalies and ongoing trends.

“Rolls-Royce has always been a pioneer in engine services, and this collaboration will create a new digital engine for Rolls-Royce to deliver an even better service to its customers across its world-class engine fleet through Microsoft Azure,” said Jason Zander, Corporate VP of Azure at Microsoft.

Microsoft also announced at the event it has been working with the OPC Foundation to ensure industry IoT scenarios is compliant within OPC Unified Architecture (UA) standard. The OPC UA provides a standardized communication, security, and metadata and semantics abstraction for the majority of industrial equipment, ensuring interoperability between devices, assets and the platform to interpret the collected data.

Microsoft’s support for the standard covers its entire IoT portfolio including local connectivity with Windows devices to cloud connectivity via the Microsoft Azure platform. The announcement also included extended support for OPC UA open source software stack, ensuring any Windows 10 devices running the Universal Windows Platform can connect and openly communicate with other IoT devices via OPC UA.

“As Industry 4.0 reaches a tipping point, we believe that openness and interoperability between hardware, software and services will help manufacturers transform how they operate and create solutions that benefit employees’ productivity,” said Sam George, Director of Azure Internet of Things at Microsoft. “Microsoft’s support of OPC UA in Azure IoT and Windows IoT will reduce barriers to industrial IoT adoption and help deliver immediate value.”

AWS, containers, Enterprise IT, Google, Microsoft, News & Analysis

What did BCN readers say last week?

What do you think written on whiteboardOver the past week, we took the opportunity to gauge the opinion of the BCN readership on industry trends and issues, through a number of polls. Here’s what we found out:

Microsoft is unlikely to be successful? 58% say no

For the most part, Microsoft’s lawsuit has been keep out of the headlines. This is unlikely to indicate the whole episode is unimportant to the industry, but maybe more due to the fact the story has been overshadowed by the ongoing saga between Apple and the FBI.

In any case, Microsoft filed a lawsuit against the US government, citing the first and fourth amendment with regard to government agencies using secrecy orders to access its customer’s emails or records. From Microsoft’s perspective, the company should have the right to tell customers the government is accessing their data, aside from in exceptional circumstances. The government disagrees.

While the tech giant has taken it upon itself to fight the good fight alone, BCN readers are a bit more sceptical on the success of the venture. Only 42% believe Microsoft’s lawsuit will be successful, though this is a question which is unlikely to be answered for a substantial period of time. Any decision will be appealed by the despondent party, dragging out any decisions or changes in government practise.

When will containers hit mainstream? 21% say right now

Containers are one of the hottest trends in 2016. We recently ran a buzzword-buster article not only discussing what containers actually are, but more importantly what the value to enterprise actually is. Since then there have been numerous announcement focused around the technology, from Microsoft to Red Hat to Juniper, indicating containers are starting to get some traction.

But how much of the press is a smoke-screen and how much is reality? In short, it’s looking quite positive.

Cloud took a healthy amount of time to be trusted and understood by the mainstream market, and maybe it is this longer adoption time which has accelerated containers as a technology. 21% of BCN readers highlighted that they are currently using the technology in a meaningful way in their business currently, 50% believe it will be in the next 1-2 years, and only 29% said longer than three years.

Who is the best innovator in the cloud industry? 75% still say AWS

Last week AWS launched a host of new features at the AWS Chicago Summit, ranging from new security features, tools which simplify the movement of data around an organizations cloud, platforms for automatically deploying and running apps on Amazon’s cloud infrastructure, testing features, as well as authentication services.

Although this is the first major update from AWS in some time, Google and Microsoft have been feverishly bolstering their offerings over the last six months ranging from new hires, to new features and new acquisitions. Industry insiders have even told us at BCN that AWS could be seen to be sitting back to much, offering Google and Microsoft the opportunity to improve their own standing, and make up ground on the number one player in the cloud space.

BCN readers do not agree however. 75% believe AWS is still by far and away the industry leader, 10% believe AWS, Google and Microsoft are all on par, while 15% believe innovation has faltered at AWS, and the rest of the industry is catching up fast.

Is DevOps mainstream? 48% say no

DevOps is another of the buzzwords which has floated over from 2015 into 2016. However, as buzzwords go, few have captured the attention of the industry in the same manner. Such is the prominence of DevOps, it seems although every company is now a DevOps specialist, DevOps expert or DevOps orientated organization.

In fact, this isn’t only vendors who have adopted DevOps, but pretty much every enterprise decision maker has DevOps on the lips also. The main concern here is the definition of DevOps can be seen as lost on certain organizations. Yes, there are practitioners of the methodology, though there are also a host of people who have taken the phrase without fully understanding the implications and the means to implement such an idea.

And it would appear BCN readers also agree with that assumption. Despite DevOps being one of the most used words in the cloud industry, only 52% of our readers believe DevOps has hit the mainstream market.

Big Data, data analytics, GE, GE Digital, News & Analysis

GE launches asset management offering for manufacturing industry

Engine manufactoringGE Digital has launched its suite of its suite of Asset Performance Management (APM) solutions, a cloud-based offering running on its Predix platform, to monitor industrial and manufacturing equipment and software.

The company claims industrial customers can now use data and cloud-based analytics to improve the reliability and availability of their GE and non-GE assets. While APM would generally not be considered a concept, GE claims its offering is the first commercially available to support the industrial data generated by a company’s assets, both physical and software based.

The launch builds on underlying IoT trends within the industrial and manufacturing industry to move towards a proactive performance strategy for their assets, repairing said assets before a maintenance issue as opposed to reacting to a fault.

“GE’s deep expertise in developing and servicing machines for industry gives us a greater understanding of real business operations and the insights to deliver on industry needs,” said Derek Porter, GM for Predix Applications at GE Digital. “With the launch of our APM solutions suite, GE is commercialising its own best practices for customers.”

The offering is split into three tiers. Firstly, a machine and equipment health reporting system will provide a health-check on the asset, detailing performance levels in real-time. Secondly, a reliability tool predicts potential problems within an asset, allowing engineers to schedule maintenance activities. And finally, a maintenance optimization tool will be available later in 2016 to optimize long-term maintenance strategies, which GE claim will enable customers to increase the lifecycle of the asset and reduce downtime.

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

The company also launched the generally available module of GE Digital’s Brilliant Manufacturing software suite, Efficiency Analyzer, which will be available through a new SaaS pricing model. Once again, the product offering is built on the need to analyse and activate data collected within manufacturing operations, to improve operational efficiency. One of the first use cases advertised by the company has been within its own transportation division.

“GE’s Brilliant Manufacturing Suite has enabled significant reduction in unplanned machine downtime resulting in higher plant efficiency,” said Bryce Poland, Advanced Manufacturing Brilliant Factory Leader, GE Transportation. “As part of our digital thread strategy, we will increase our machines and materials visibility by 400% in 2016.”

BT, CIO, Enterprise IT, News & Analysis, Transformation

What did we learn from BT’s 2016 CIO Report?

Office worker sitting on rooftop in cityBT has recently released its 2016’s CIO report, dissecting the challenges and opportunities available for enterprise organizations, and the CIO, following the mainstream adoption of disruptive digital technologies.

The 2015 edition of the report highlighted CIO’s role was shifting away from that of a technologist and operations guru, and more towards a strategic, creative and consultative one. As organizations are still identifying what digital means for their own business, the CIO is becoming ever more central in the boardroom as each enterprise continues on the path to understand how technology adoption and integration could ultimately define its success or failure.

Here, we’ve detailed a few of the lessons learnt from the 2016 report:

Security is now being dealt with

Cloud and/or cyber security has been a topic of interest throughout the industry, though there has been a difficulty in addressing the challenge as few have identified a means to do so. It would appear that as there hasn’t been a concise or even complicated answer to the security conundrum, conversations have been swept under the carpet.

Through conversations BCN has had at recent events we understand security is still a major challenge, though discussions around how to become more secure are less taboo. In general, it would seemingly appear CIO’s have accepted the idea 100% secure is never possible, but this is okay. You have to continuously evolve your security strategy to adapt to a dynamic threat environment.

The report highlights 33% of respondents believe the transition through to cloud computing will act as a catalyst to improve security throughout the organization. It would appear the implementation of cloud is forcing enterprise to deal with security – it is no longer a subject which can be put off for another day.

Changes to CIO roleCloud is no longer a choice

65% of respondents stated their current infrastructures are struggling to deal with the rapid adoption of digital technologies. There are still challenges to the adoption of a cloud model (security, legacy systems, time constraints and budget), though the CIO’s in questions realize cloud is no longer an option to become more successful, but a necessity to remain relevant.

The CIO role has changed and there’s no going back

Traditionally the role of the IT department has been to ‘keep the lights switch on’ and to ensure the business does not close down. It’s operational, it’s in the backroom and it’s all about keeping things running. Not anymore.

The operational role of IT will never disappear, but the decision making capability and the influence on the businesses strategy has been increased. In fact, 72% of the respondents believe the CIO’s standing in the boardroom has improved increased, 73% believe the boards expectations of the CIO has increased and 70% believe the board are now looking for a creative CIO, not just someone to keep everything ticking along.

A successful CIO will be able to bridge the gap between IT and the rest of the business, becoming more of a businessman as opposed to a technologist. The disruptive nature of digital technologies ensure CIO’s now have to be driven by flexibility, adaptive to new ideas, understanding of agile models and more receptive to alternative trends. This could be seen as quite a shift in what would be the current perception of a CIO.

BT Quote

Herbert Smith Freehills, Microsoft, News & Analysis, Privacy

Legal reaction to Microsoft’s lawsuit against the US government

Lady JusticeUS government agencies have had a tough time of it in recent weeks. While the FBI’s battle with Apple has been rolling through the headlines, Microsoft’s lawsuit has been kept relatively quiet after an initial splash in the press.

In light of a potentially industry changing event, we took some time to speak to legal experts at Herbert Smith Freehills LLP to understand the impact of the lawsuit on cloud computing as an industry and a technology.

“In Microsoft’s view, the government’s increasing use of so-called “secrecy orders” to obtain access to stored customer information, without that customer’s knowledge, violates US constitutional protections that afford individuals and businesses the right to know if the government searches or seizes their information,” said Joseph Falcone, Partner at Herbert Smith Freehills, in New York.

“One provision of the Electronic Communications Privacy Act (ECPA), however, and the one at issue here, enables a federal court, upon application by the government, to enjoin a cloud services provider from notifying its customer of any governmental demand for that customer’s e-mails and documents.

“Microsoft charges that in most cases, secrecy orders issued pursuant to this provision forbid notification to the customer for unreasonably long, and in many cases indefinite, time periods, whenever the government can convince the court that such notice would result in adverse consequences to the investigation.”

In short, Microsoft’s President and Chief Legal Officer Brad Smith has seemingly set it upon himself to take on one of the worlds’ most powerful entities, in a battle to bring government policy and legislation into the 21st century. Microsoft’s issue is seemingly centred on the idea that government is abusing its power set out in the ECPA, originally written in 1986, long before the widespread use of the internet. The team maintain the position that government cannot use a collection of rules, set years before cloud computing was even an idea.

Joseph Falcone

Joseph Falcone, Partner at Herbert Smith Freehills, in New York.

“The danger of such unlimited secrecy, Microsoft asserts, is also evidenced by the fact that the statute does not require the government to later justify the continued prohibition on providers from communicating to their customers about the government’s action,” said Falcone. The company believes there is a lack of accountability for the US government, enabling its agencies to act without fear of retribution. While tech giants throughout the industry have been on the receiving end of public outcry when discussing privacy and the ethical use of a customer’s data, Microsoft is seemingly taking a lone stance against the US government to reverse the trend.

“Microsoft’s complaint raises a host of US constitutional issues, doctrines and arguments,” said Falcone. “Distilled to their essence, Microsoft’s argument is that it is unconstitutional ‎for the government and the courts to prevent it from telling its customers when authorities seek ‎their e-mails or other stored data.”

In Smith’s blog post detailing Microsoft’s position, he highlighted the government’s current position violates the 1st and 4th constitutional amendments, but he does maintain there are circumstances where secrecy should be an option. The problem here is secrecy has become too routine, leaning towards the default setting as opposed to the exception to the rule.

“There is no way to predict at this point how the court will rule, and any ruling by the district court very likely will be appealed,” said Falcone. “It is also unclear whether the suit will result in any changes to US law or curtail what Microsoft describes as increasing government efforts to obtain electronic data, though Microsoft has signalled that it would support changes.

“Microsoft’s most recent suit is similar to a pending challenge that it lodged to US authorities’ efforts to secure, via a warrant served on Microsoft in the US, the e-mail content from a Microsoft customer whose data was stored in the EU.  In that challenge, as in this one, Microsoft has cast itself as the defender of its customers’ right to privacy and their right to transparent actions by the US government.

“In addition, these actions enable Microsoft to show regulators in the EU and elsewhere that the company is seeking to limit US government efforts to secure electronic data secretly and to secure non-US stored data from the US.”

It would be very difficult to predict which way the lawsuit will go, but it would be fair to assume this is unlikely to be a short-lived story. Any decision made will likely be met by a string of appeals, delaying the impact on the industry for what could potentially be a significant amount of time.

Nick Pantlin

Nick Pantlin, TMT Partner at Herbert Smith Freehills

We recently ran a poll in which our readers told us it is unlikely Microsoft will be successful, only 42% of our readers are backing the Microsoft legal team at this point, however the action itself could possible earn Microsoft new fans around the world, most particularly in Europe. With Safe Harbour now non-existent, and its successor attracting criticism from some quarters, Microsoft’s stance, seemingly protecting its customers from the big bad government, will possibly act as an effective PR tool in the European region.

While the US government is the one in the spotlight at the moment, it should be worth noting it is not the only government worldwide to undertake such activities.

“Against the backdrop of the ongoing global battle between public authority access to data for national security purposes and individuals’ right to privacy, the controversial UK Investigatory Powers Bill has been revised and introduced to the House of Commons with a deadline of 31 December 2016 for the legislation to be in place,” said Nick Pantlin, TMT Partner at Herbert Smith Freehills, in London.

“The issue of end-to-end encryption has also been debated in the UK. However, the Bill has clarified the Government’s position on encryption, making it clear that companies can only be asked to remove encryption that they themselves have applied, and only where it is practicable for them to do so. The Government asserts that it is not asking companies to weaken their security by undermining encryption.”

Financial Results, hybrid cloud, Microsoft, News & Analysis

Mixed fortunes for Microsoft cloud business

Microsoft To Layoff 18,000Microsoft has reported mixed fortunes for its cloud business unit during its quarterly earnings call, as while cloud revenues grew across the board, the results are slightly down on the previous quarter.

Office commercial products and cloud services revenue grew 7%, Office consumer products and cloud services revenue grew 6% and Dynamics products and cloud services revenue grew 9%. Revenue in Intelligent Cloud grew 3% to $6.1 billion, with Azure revenue up 120%, though this is down from 5% and 140% respectively in the previous quarter. Despite the slight slow-down, the team remain upbeat for future business. Profits for the Intelligent Cloud business unit fell 14% to $2.19 billion for the quarter.

“We exceeded $10 billion in commercial cloud annualized revenue run rate,” said Satya Nadella, CEO at Microsoft. “We’re halfway to our FY 2018 goal of $20 billion. This quarter, we surpassed 270 million monthly active devices running Windows 10. We’re proud of our progress and look forward to making more as enterprise deployments accelerate.

“We’re expanding into new markets such as security, analytics and cloud voice, where we see an opportunity and where we can differentiate. For example, the cyber security market is expanding rapidly, and it’s a place where we have unique capabilities, like Advanced Threat Protection, Cloud App Security and Advanced eDiscovery. This combination drove a 35% quarter-over-quarter growth of monthly active users of our premium information protection services in Office 365. A key driver of this growth is our new premium Office 365 suite, E5.”

While the figures show revenues slowing slightly, the company has still demonstrated growth in the cloud computing segment and overall consensus throughout the industry would generally attribute Microsoft as the number two player in the market. Share price took a slight dip following the news, however Nadella leadership and guidance into new markets has seen positive growth in market performance since his appointment in 2014. Share price has increased from just below $40 to roughly $55 during Nadella’ tenure as CEO.

“The cloud is being built into every organization’s quest to optimize and grow,” said Nadella. “With our results this quarter, it remains clear we are one of the two leaders in this market. Azure revenue increased 120% in constant currency, with revenue from premium services growing triple digits for the seventh consecutive quarter. We are innovating in new areas to help organizations digitally transform. We’re expanding our competitive strength in hybrid computing. We’re generating opportunity for developers and partners.”

In terms of moving forward, the company has prioritized the hybrid cloud market as a means of growth. By utilizing the Azure Stack offering, Microsoft claims customers are able to process certain workloads in Azure data centres, while also keeping mission critical workloads in-house on the Azure Stack itself. The company believes the scale of the data centre and Azure Stack offering is number one in the industry.

“That I think is where the world is going to go to, where distributed computing will remain distributers,” said Nadella. “So Azure’s stack is completely unique to Microsoft. No one else who is in the public cloud business at any scale has that kind of capability. So I would say that’s another point of differentiation.”

AI, Google, News & Analysis

Google backs AI over VR

Googlers having funGoogle CEO Sundar Pichai has backed growth of artificial intelligence over virtual reality as the next era of computing.

Speaking on the company’s earnings call, where Google reported year-on-year revenue growth of 23% to $20.3 billion for Q1, Pichai highlighted investments in machine learning projects and artificial intelligence will continue, though the team is not discounting virtual reality completely.

“And overall, I do think in the long run, I think we will evolve in computing from a mobile first to an AI first world,” said Pichai. “And I do think we are at the forefront of development. So we don’t view it as adapting to it as much as pushing hard and getting there. And so that’s the core of what we do, and we’ll continue to do that.”

While the company has been making progress in the world of AI in recent months, Google launched its Cloud Machine Learning product last month, it has seemingly been playing catch up with the likes of Watson and AWS whose offerings have been in the public eye for a substantially longer period of time. Although it could be seen to be playing catch-up, Pichai believes increased investments and prioritization of AI could be the market differentiator for Google.

“We do think we are competent across a range of work flows,” said Pichai. “And areas where we view we will be uniquely capable over time is, because of our machine learning capabilities, helping enterprises really understand their data, understand how best they can do what their core competency is and really revolutionize around that. It’s early days and it’s a long-term investment. But bringing our machine learning APIs over time through cloud to our enterprise customers is going be a huge source of differentiation for us.”

The company has in recent months been aggressively building its position in the public cloud market, and from what Pichai has said on the earnings call, it would appear this charge will continue. Pichai claims Google has been doing cloud, internally at least, since its inception, though the company has now matured its processes to ensure it is able to serve customers in an effective manner. Pichai also believes the acceptance of AI in enterprise, and the introduction of Diane Greene, positions Google in a bold stance to improve its share of the cloud computing segment.

“Last December, we have unified our cloud businesses under one leader (Diane Greene), so we can innovate faster and better serve our customers,” said Pichai. “This decision is already paying off. Enterprises are starting to see the power of combining Google Cloud Platform with our suite of business applications, all of which are infused with our machine learning services.”

EMC, Financial Results, Intel, News & Analysis, SAP

Cloud takes top spot at EMC, SAP and Intel quarterly announcements

Growth on a black boardEMC, SAP and Intel have all reported quarterly figures, with cloud taking centre stage during all announcements.

EMC demonstrated positive growth within the cloud business units, though its staple business unit, EMC Information Infrastructure saw double-digit year-on-year declines. The $67 billion merger with Dell was prominent throughout the earnings call, as the team would appear to be in the final stages of confirming the transaction.

SAP’s HANA once again dominated the company’s earnings call, demonstrating healthy growth in revenues and customer numbers over the period. The company saw positive growth worldwide, despite challenging conditions in Latin America.

Finally, Intel is seemingly succeeded in its transition programme as it reported positive growth during Q1. The company is moving away from its historical playground, setting its sights on the increasingly affluent IoT and cloud market segment.

EMC core business unit drags while cloud soars

EMC Corporation has reported its Q1 2016 results at revenues $5.5 billion a year-on-year decrease of 2%, though its VMWare and Pivotal businesses experience positive growth over the same period.

While the EMC Information Infrastructure business saw Q1 revenues decrease of 6% to $3.8 billion, the company was bolstered by 5% revenue growth from VMWare, and a 56% increase from the Pivotal business. The company highlighted healthy growth within the Pivotal cloud and big data subscription software in particular, with annual recurring revenue up over 200% year-on-year, to $116 million.

EMC“Work forces are becoming increasingly mobile,” said Joseph Tucci, President and CEO at EMC Corporation. “There is an explosion of data from connected smart device as sensors and telemetry are being built into every imaginable product. Companies are embarking on digital transformations to exploit this ever increasing amount of data, get more connected with their customers, employees, and suppliers. In short, we feel very good about the depth and breadth of our product portfolio.”

The results continue a trend of under-performance according to analysts, as this is now the sixth straight quarter EMC has missed analyst expectations. The company’s core business also saw declines as sales for its high-end storage services dropped 14%, though the flash storage business countered these declines somewhat, growing 122% year-on-year.

“The spending environment continues to be challenging as customers focus more on transformative IT projects while also minimizing transactional spend,” said Denis Cashman, CFO at EMC Corporation. “This customer behaviour is impacting our traditional business in the near-term. However, the major trends in IT remain intact, and we are having positive discussions with customers regarding how EMC and eventually, the combination of Dell and EMC, can help them with their IT and digital transformation.”

While the management would appear to be upbeat about the progress of EMC as an individual entity, attention could not be drawn away from the $67 billion Dell merger. The company claims the integration programme has been accelerated over recent months, and a number of EMC executives have included in the new leadership team announced by Michael Dell recently. Tucci also claims the team are now only awaiting regulatory approval from China, before the transaction can be completed.

S/4HANA dominates headlines at SAP quarterlies once again.

SAP has reported positive growth in the first quarter of 2016 as the company continues its transition from an enterprise to cloud-focused organization, with S/4HANA demonstrating healthy progress.

SAP1Cloud subscriptions and support revenues grew 33% year-on-year to €678 million, and new cloud bookings grew at 23% over the quarter to €145 million. The cloud business, as well as software support revenues, accounted for 69% of the quarter’s total revenues. EMEA demonstrated solid growth over the period, accounting for an 8% increase, whereas the Americas reported a 29% increase, despite political and economic instability in Brazil creating a challenging environment.

“Our cloud results this quarter leave no doubt that this business continues on its fast-growth path,” Luka Mucic, Chief Operating & Financial Officer at SAP. “Cloud revenue came in at 33% growth this quarter, which marks the 12th quarter in a row with 30%-plus growth rate excluding acquisitions. This is at the high end of our implied guidance range and ticking well ahead of our CAGR through 2020.

“New cloud bookings saw robust growth, up 23% or up 26% at constant currencies. With our strong cloud backlog and our strong bookings performance in 2015, we are well on track to deliver on our midterm growth ambitions in the cloud.”

SAP added more than 500 S/4HANA customers, of which approximately 30% were new. The company now boasts 3,200 customers for across the world for the product. HANA Enterprise Cloud was credited with particularly strong performance from the management team, as it highlighted customers are now utilizing the cloud platform for sensitive and mission critical processes.

“Companies are running their supply chain, manufacturing, asset management, sales and distribution that all operate on a 24/7 basis on the SAP HANA Enterprise Cloud,” William McDermott, CEO at SAP. “The triple-digit growth in this business is a validation of SAP Cloud innovation and we are only getting started.”

Intel cuts 12000 jobs to focus on IoT and cloud markets

Intel has reported year-on-year growth of 7% for Q1, taking the company’s revenues to $13.7 billion. Despite the positive growth, the management team also confirmed it would be cutting 12000 jobs, equivalent to 11% of the global workforce.

IntelThe Internet of Things group reported revenue of $651 million, an increase of 22% year-on-year, Security group revenue was up 12% to $537 million and the Data Centre group reported a 9% year-on-year growth to $4 billion. The company’s historical playground, its Client Computing group which includes PCs and mobile devices, was down 14% to $7.5 billion. The Client Computing group is where the management have revealed the majority of the job cuts will come from.

“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” said Intel CEO Brian Krzanich, who is leading the company’s shift away from client computing and towards IoT and the cloud.

“The opportunity now is to accelerate this momentum and build on our strengths,” said Krzanich. “These actions drive long-term change to further establish Intel as the leader for the smart, connected world. I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.”

During the call Krzanich detailed the company’s restructuring programme, in which the team aim to move away from the perception Intel is a PC company, focusing on the cloud and connected devices markets. The company claims the staff reductions will enable Intel to focus its resources on new priorities

“You take a look at it, 40% of our revenue, 60% of our margin comes from areas other than the PC right now,” said Krzanich. “It’s time to make this transition and push the company over all the way to that strategy and that strategic direction. So that’s why we wanted to do it now.”

Cost Reduction, Deloitte, Enterprise IT, hybrid cloud, Opinion

Understanding the economics of the cloud – its more than just a money saver

Businessman drawing business planA recent survey from Spiceworks highlighted 93% of enterprise organizations are now using at least one cloud based service within their operations, but there does seem to be a general feeling within the community that the benefits are not clearly understood.

While most early adopters of such platforms, as well as other future tech, have focused on the performance capabilities which cloud can offer, the mainstream market believes the cloud is a cost reduction tool, a point which professional services giant Deloitte disagrees with.

“The image of the cloud projected by the market is sometimes that all forms of cloud are cheaper, but it is a question of using the right tool for the right job,” said Gwil Davies, Director & Cloud Lead in the EMEA IT Infrastructure at Deloitte. “What decision makers at these organizations need to realize is that the cloud is not necessarily cheaper.”

“I think it’s more important for organizations get a real understanding of how to use the cloud and perhaps not automatically assume that moving all of their current IT into cloud is going to be the cheaper solution.”

The concept of the cloud being a cheaper alternative to traditional IT is sometimes a case of a lack of understanding of the technology itself, but also the journey on which organizations need to undertake to ensure cloud computing is being used in an effective manner. Selecting a cloud provider is only a small facet of the cloud itself, a fact which can be under-appreciated by enterprise decision makers.

“Technology is a small part of the challenge, business transformation of the organization is key to the success of the cloud,” said Davies. “You have to be really clear on the why, the what and the how. Specifically you have to have a keen eye on value. Some of the most successful cloud implementation projects generate value in new ways. These decision makers have specifically identified where clear business value can be generated. If the answer is to reduce costs, the cloud is not always the right option.”

Speaking at Cloud World Expo, Davies highlighted that a successful journey to the cloud is not one which focuses on reducing CAPEX and OPEX throughout the organization, but identifies where value can be achieved through a cloud-enabled business. Identifying where the value is, but also monitoring the progress of the project can be the difference between effective investment and throwing money away.

“There are sometimes surprises – and most organisations will need to invest in some base capabilities, before a migration of systems into the cloud can begin,” said Davies. “The business case needs to be defined around what the value of the transition is to the business – huge benefits can be realised, and often it’s not just about reducing the current cost of your IT systems.”

One conclusion which can be drawn from the aforementioned survey as well as others, is the concept of cloud computing has penetrated into the mainstream market. But the question as to whether the benefits of scalability, compute power, agility, flexibility etc. have been effectively received is less clear.

“It varies very widely (whether benefits beyond cost reduction are understood), as customers are in different stages of their cloud journey,” said Davies. “In my opinion, the cloud as a technology is one of the most transformative opportunities available to enterprise organizations in recent years. The cloud is unlocking a huge amount of value throughout the organization, which wouldn’t have been possible even two years ago. There is a huge potential to reach new customers, create new opportunities and experiences, as well as become more competitive in the market place.

Different organizations are in different places though. The starting point for organizations, who are at the investigating the cloud, and haven’t identified what the cloud means to the wider business, is mostly cost saving.”

containers, News & Analysis, Open Source, Red Hat

Red Hat bets on OpenStack, DevOps and Containers in new product offerings

redhat office logoRed Hat has launched general availability of Red Hat Cloud Suite and Red Hat OpenStack Platform 8, leaning on wider DevOps trends within the industry.

The company claims the new offerings will assist enterprise organizations in bridging the gap between development and operations teams at the scale of cloud computing, and successfully implement a DevOps business model.

“Everyone is now aware that Uber doesn’t own a car or Facebook doesn’t generate its own content, this is nothing new, but it does highlight the digital disruption which is taking place in the industry,” said Radhesh Balakrishnan, General Manager, OpenStack at Red Hat. “These disruptions are impacting decisions on infrastructure within the organization, but also what kind of development methodology gets adopted. Customers are demanding an agile infrastructure and a Devops model to ensure they can reduce time to market and accelerate innovation within their own organization.

“When you generally look at the CIO agenda, the need to be more responsive to business needs is a priority within almost every organization by default. Given that they are viewing DevOps as a means to facilitate the change in thinking and culture, DevOps is here now and it’s not a fad which the industry has grabbed onto.

“Even internally, we have been aggressive in embracing DevOps. Our oldest business is Enterprise Linux and security updates is an area which of key value to our customers. Heartbleed was a huge issue for our customers 12 months ago, and since we are following the DevOps methodology, we were not only able to provide a patch, but we also pushed out a tool which customers can use to see if they are now compliant. None of this would have been possible without DevOps, so we are seeing the benefits internally as well.”

Red Hat is currently pinning its ambitions on the growth of OpenStack and the belief it will become the choice operating system for cloud infrastructure and the data centres of the future. The company backed the growth of Linux in a similar fashion, effectively riding the wave to its $2 billion annual sales, and is now placing the same bet on OpenStack, and its adoption throughout the industry.

The launch is based on OpenStack Kilo, the release which came out last year, combining the Red Hat cloud, DevOps and container offerings on a single cloud suite, within a private cloud environment. Keeping on the theme of ‘openness’, the tools will also be available as individual products should customers want to work with other offerings also.

Building on another industry trend, Red Hat has also prioritized containers as a technology for its service offering.

“Containers are probably the most attractive technology we at Red Hat have seen in years. Every large customer we have wants to have a conversation around containers,” said Balakrishnan. “We’re including OpenShift in the cloud suite, which is a service offering which was designed from the ground up on Docker (for container image) and Kubernetes (for orchestration layer). We are excited about the fact that we are one of the first in the industry to be bringing container technology to mainstream.

“Containers are one of the biggest priority areas for us as a company, so much so that we include container technology in our Enterprise Linux offering. It’s pervasive both in our technology as well as in our customer minds.”