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We’re nearing the end of 2014 and most smart CEOs already know their IT transformation game plan for 2015 – more digital differentiation woven into the fabric of their essential operations.

Every enterprise is now a digital business, regardless of the industry. That’s why digital service innovators are in such high demand. Meanwhile, many of the more traditional IT process-oriented jobs will diminish in importance.

Are you evolving your IT support team’s roles and responsibilities, as a result these key trends? Forward-thinking CIOs and IT managers have already embraced business technology that will do some of the more tedious routine system administration tasks via automation, so that they can redirect their focus to higher-priority activities.

What’s considered a pressing requirement? Many believe that it’s attaining parity in the enterprise with the freemium consumer cloud offerings that have helped to fuel the so-called Shadow IT phenomenon.

Public cloud gains more converts

However, there’s been progress that’s worth revisiting. According to the latest worldwide market study by International Data Corporation (IDC), public cloud computing services spending for the enterprise will reach $56.6 billion in 2014 and grow to more than $127 billion in 2018.

This forecast represents a five-year compound annual growth rate (CAGR) of 22.8 percent, which is estimated to be about six times the rate of growth for the overall global IT market. In 2018, based upon findings from the IDC study, public IT cloud services will account for more than half of worldwide software, server, and storage spending growth.

“Over the next four to five years, IDC expects the community of developers to triple and to create a ten-fold increase in the number of new cloud-based solutions,” said Frank Gens, senior vice president and chief analyst at IDC.

The ongoing adoption of what IDC calls cloud-first business strategies – by IT buyers implementing new digital services – is a major factor that is driving public enterprise cloud services growth.

IDC believes that the enterprise cloud services market is now entering an evolutionary phase. It will produce an explosion of new digital solutions and associated commercial value creation – built on top of the pervasive cloud computing infrastructure that’s being deployed across the globe.

These new applications and emerging use-cases will be created in vertically-focused platforms with their own innovation communities, which will help to reshape how companies operate their increasingly essential IT function. According to the IDC assessment, it will also transform how these companies compete within their primary industry.

Mr. Gens adds “Many of these solutions will become more strategic than traditional IT has ever been.”

IDC expects Software as a Service (SaaS) will continue to dominate public cloud services spending, accounting for 70 percent of 2014 expenditures. IDC says the second largest public cloud category will be Infrastructure as a Service (IaaS). They also predict that Platform as a Service (PaaS) and storage will be the fastest growing categories, driven by major increases in developer cloud services adoption and Big Data applications, respectively.

Next steps toward a digital nirvana

In time, I anticipate that we’ll see more multinational companies upgrade their legacy data centers and deploy private cloud solutions to meet their user’s needs – for a variety of different but equally compelling strategic business reasons. I expect public cloud to more frequently coexist with private cloud, in a multitude of combinations that will be limited by our own imagination.

Granted, there will be some technical constraints that need to be overcome – like making these cloud service permutations all work together in a frictionless manner. That being said, are you prepared with the right hybrid cloud management and orchestration solution in place? If not, start the due diligence process to select an appropriate solution. You’ll need time; choose wisely.

Of course, the now ubiquitous open-source software suites will play an instrumental role in enabling the transition to a hybrid cloud model. Certainly, the enthusiasm and momentum of the early-adopters at the OpenStack Summit in Paris, France this week was very encouraging for the fast-followers.

Besides preparing for a multi-cloud environment, I believe that the future outlook for many companies will likely include embracing a Mobile Cloud scenario, where the two most apparent enterprise technology trends morph together into a cohesive whole.

The combination of capable mobile devices and hybrid cloud computing services should provide an adaptive and flexible business technology foundation, so you’ll need to understand how they integrate into your existing IT infrastructure and legacy commercial applications.

Smartphones, tablets and personal productivity-oriented mobile applications (apps) are transforming how information is being accessed, used and shared in the enterprise. The savvy Line of Business leaders at progressive companies have already enabled employees to purchase mobile cloud apps for file syncing, and other requirements that may not have been met by the IT organization.

Some perceptive corporate IT leaders saw the mobile-first strategy gain traction in the marketplace, and immediately got involved with a proactive plan to build and support corporate-approved apps. The mobile application development platform providers, such as FeedHenry, offer the tools and services that together constitute the critical elements of a total solution.

These platforms enable an enterprise to design, develop, deploy, distribute and manage a portfolio of mobile apps running on a range of devices and addressing the requirements of diverse use-cases. Clearly, the best way for IT organizations to be relevant in the mobile cloud era is to get involved; preferably sooner, rather than later. So, what’s the status of your plan?

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IBM has today announced the IBM Global Entrepreneur Program for Cloud Startups, which aims to help aspiring firms to the tune of $120,000 (£75,000) if they get a foot up on IBM’s cloud platform.

Those who get the funding will be able to access the entire set of jewels in IBM’s cloudy crown, including SoftLayer infrastructure, Aspera’s data transfer, Cloudant’s database as a service, and Twitter’s social analytics, after the firms’ partnership was announced earlier this month.

Big Blue is also offering face to face events, as well as CIO and entrepreneur meet-ups for successful startups.  With over four million developers and 143,000 companies in the IBM cloud ecosystem, IBM claims it has the widest range of cloud services out there.

The firm certainly feels as though it’s got the largest in terms of funding, trilling in its press literature the $120k is greater than Google ($100k), Microsoft Azure ($60k) and Amazon Web Services’ ($15k) offerings. This publication is reminded of Rackspace’s £250,000 pledge to startups back in November 2013, but that was the total amount of its cloud hosting, so IBM does have the edge, providing it gets more than three customers, anyway.

For the enterprise market in particular, the fresh blood startups provide can be a boon for larger companies looking for more streamlined solutions to age-old IT problems. Again, IBM facilitates this by offering connections with its in-depth enterprise customer base.

“The IBM Global Entrepreneur Program for Cloud Startups provides a comprehensive and strong network of resources to drive collaborative cloud innovation,” said Norwest Ventures’ Promod Haque. “By enabling access to IBM’s broad and fast-growing enterprise cloud portfolio and third party cloud services build around open APIs, startups can now more easily build and monetise their solutions.

“More importantly, by providing a global path to the enterprise, this program can help accelerate the rate at which cloud startups can get to market and scale,” he added.

It’s interesting to note how a venture capitalist is championing this kind of innovation. It’s clear the large vendors want to muscle into this space, however there may be room for both kinds of approach. Current cloudy startups receiving venture capital include software-defined storage firm SwiftStack with $16m, cloud-based platform Volometrix – $12m in series B – and OpenStack provider Mirantis, with a whopping $100m.

You can find out more here.

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German tech giant SAP has announced former Microsoft corporate vice president (CVP) Quentin Clark as its new chief technology officer.

Clark was previously at Microsoft, where he’d served for 20 years, as CVP for business applications, reporting directly to then executive vice president Satya Nadella. He helped oversee the delivery of various data products including Microsoft SQL Server, Power BI, and BI in Microsoft Office.

His job role at SAP is described on his LinkedIn profile as ‘technology ambassador.’ “Clark will drive direction and vision of SAP’s future technology and shape SAP’s brand as the technology leader”, it adds.

“I am very pleased to have Quentin join SAP,” said executive board member Bernd Leukert, who Clark will report to. “He is not only an impressive technologist who thrives on pursuing a meaningful vision but at the same time a passionate leader.”

He added: “I am sure that Quentin will significantly contribute to shaping and executing our technology strategy and turning opportunities into innovation – and help our customers to Run Simple.”

In other words, this is cloud, cloud, cloud. The company released its third quarter results last month and found cloud subscriptions up 51% from Q313, while software revenues were down 3% from this time last year.

The problem with that, however, is cloud subscriptions and support was €738m (£584.1m), while software revenue was €2.53bn (£1.99bn). It’s a bit of a jump, but then it’s what SAP would roughly be expecting given it wants to migrate its revenues to cloud. For a company with ambitions to be ‘THE cloud company’, then it’s little surprise analysts have been concerned about its future, along with the likes of Oracle and IBM.

The move to bring Clark in as CTO continues the list of the executive merry-go-round. Former SAP head of cloud Shawn Price recently joined Oracle, as well as former Google App Engine exec Peter Magnusson.

We’re nearing the end of 2014 and most smart CEOs already know their IT transformation game plan for 2015 – more digital differentiation woven into the fabric of their essential operations. Every enterprise is now a digital business, regardless of the industry. That’s why digital service innovators are in such high demand. Meanwhile, many of the more traditional IT process-oriented jobs will diminish in importance.
Are you evolving your IT support team’s roles and responsibilities, as a result these key trends? Forward-thinking CIOs and IT managers have already embraced business technology that will do some of the more tedious routine system administration tasks via automation, so that they can redirect their focus to higher-priority activities.
What’s considered a pressing requirement? Many believe that it’s attaining parity in the enterprise with the freemium consumer cloud offerings that have helped to fuel the so-called Shadow IT phenomenon.

read more

Eighty-nine percent of knowledge workers retain access to the sensitive corporate applications and files of former employers.

Earlier this year, a member of the team at Site-Eye, one of the top time-lapse film companies in the UK, noticed a disturbing problem with one of its client’s feeds. A deeper investigation revealed that of the 200 cameras it had installed at construction sites around the world, 120 had been remotely disabled. In order to restore service to these cameras, engineers needed to be dispatched to each location, setting Site-Eye back $80,000.
The cause behind the problem? A single disgruntled former employee who walked away from his job with the passwords to the company’s services in-hand.

read more

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Over the next 12 months, the majority of business applications will be deployed to the cloud, with most of these being deployed to multiple clouds across multiple geographies.

That’s the key trend from a survey conducted by Equinix, in which the overwhelming majority of the 659 global respondents (77%) said they planned to deploy to multiple clouds in the next year, and a similar number (74%) expect a larger budget in 2015 for cloud services.

91% of new cloud-based offerings will be deployed in the organisation over the coming 12 months, while 45% of new cloud-based apps will be deployed at a third party colocation provider.

It’s clear that multiple cloud deployments are the way forward, but the report also made mention of how this was going to take place: interconnected data centres. 87% of respondents indicates that interconnection is required to meet cloud performance objectives, while 85% argue that direct connections to cloud providers are “highly valued.”

The report found that globally, 11% of firms are planning to deploy more than 10 cloud services in the next 12 months, compared with only 6% for North America. It’s an interesting trend, and shows how cloud deployments are catching up outside the US. 38% of firms globally are going to deploy between three and five services, compared to 30% for North America.

Globally, 7% said they were expecting to deploy to multiple clouds over the next three months; this again compares favourably with just 1% for North America. Only a minimal number (15% globally, 17% North America) said the process will take more than 12 months. Three quarters (74%) of global respondents say they will be deploying in multiple countries in some capacity.

“What surprised us about this survey is how quickly multi-cloud strategies are becoming the norm worldwide,” commented Ihab Tarazi, Equinix CTO. “Businesses have discovered that colocation provides a meaningful ROI for WAN optimisation, and it is clear that multi cloud deployment will improve the ROI even more.”

The report comprised IT decision makers, including IT executives (44%), IT managers (54%) and IT service providers (2%).

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Cloud services provider Interoute has announced it will open up a new virtual data centre (VDC) zone in Frankfurt on December 1.

The new VDC zone is the seventh to be launched in 2014, the 14^th overall, and the second in Germany, alongside the zone in Berlin launched in 2012. The firm launched data centres in Milan, Hong Kong, New York, London, Slough and Madrid this year.

It’s another step towards protecting data of European customers within EU borders, and offers ultra low, in-country latency and a resilient platform connected via fibre. It also plays into the trend of managed services; customers can spin up or down dependent on their needs with a hands on IT infrastructure or a fully managed service.

The company is also committed to startups, with the first year of access free via the JumpStart-up program.

“Expanding the application universe that can be moved to the cloud is central to Interoute’s approach,” said Matthew Finnie, Interoute CTO. “Critical from a German perspective is data control and location.”

The data centres are closely linked to Interoute’s CloudStore, a one stop shop for enterprises to deploy applications on the firm’s VDC. Speaking to CloudTech at the launch of the Hong Kong VDC, CloudStore general manager Lee Myall noted how it enabled smaller customers to buy IT on a ‘help themselves’ basis.

With concerns over the state of US data, many cloud providers are expanding their operations to Europe. Salesforce announced the opening of its first European data centre in London last month, with France and Germany in its sights, while Amazon Web Services launched a Frankfurt data centre region last month to great fanfare.

Alongside the virtual data centres, Interoute’s portfolio also comprises 12 data centres, 31 colocation centres, and over 67,000km of lit fibre.

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By Nick Razey, CEO, Next Generation Data

When the CIO of a company recently contacted us about data space for housing 25 racks with the possibility of growing to 80 racks, he mentioned in passing that he was thinking about building his own data centre as an alternative. “We’re not experts in data centres but it would be much cheaper than buying from you,” he added.

Well, on the face of it, he could be right assuming a build cost of £2.5m, depreciate it over 10 years and you’ve a cost of £250K per annum, or per rack of £3,125 per year. That does sound cheap.

But how about the cost of capital, say an average of £100K pa, and equipment maintenance – perhaps another £50K pa? And of course rent and rates, say £90K pa, plus staffing where even assuming a bare minimum you will need £150K for salaries including all uplifts. So now the total is £640K pa or £8,000 per rack. Not so cheap after all.

But that’s the least of his problems. Remember he only wanted 25 racks initially. Those 25 racks now work out at an average of over £25,600 pa each. Still within a couple of years the data centre will be full so his price per rack will get back down to the lower level. But what if he keeps growing? What if he needs 85 racks? Where do the extra 5 racks go? Does he build another 80 rack data hall for a further £2.5m?

The build option looks cheaper than colocation only if the cost of real estate and staff are ignored and full occupancy is assumed

The foregoing analysis also assumes that he has an available site which is suitable (secure, safe from flooding and flightpaths), planning permission, a source of power, connectivity options, a quality design and build contractor and plenty of cash to invest.

By comparison, housing the same number of initial and potential additional racks in a modern tier 3 UK colocation data centre will cost between £5,000 and £10,000 per rack pa depending on location (with London/inner M25 locations being at the higher end of the scale). This includes space, power, cooling and associated infrastructure.

This illustration shows the own-build option looks cheaper than colocation only if the cost of real estate and staff are ignored and full occupancy is assumed. Some of the new single site ‘mega’ data centres – over 250,000 square feet – can further reduce the cost per rack by delivering even greater economies of scale. This is achieved by all data hall construction taking place within one building and the utilisation of a common facilities infrastructure (power supply, HVAC plant, fibre cross connects, security).

So why do so many companies consider building their own data centres? A charitable explanation is that they feel more secure with an in-house data centre and it’s more efficient for staff if the data centre is on-site. A more cynical explanation is that a data centre is the ultimate vanity project.

But as the saying goes, “Revenue is vanity, profit is sanity.”

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Updated “All Sage lines terminate here.” This is the opening statement of an advert placed in yesterday’s Financial Times and Metro by NetSuite.

Parodying a railway network, the ad asks: “Has your business come to the end of the line with Sage?” adding it had poached 500 customers from its rival.

CEO Zach Nelson has approved the campaign, seeing it as an ideal time to further European expansion for NetSuite. Nelson is planning to move to the UK for a period next year to help with this, as well as oversee the recent acquisition of the UK-based commerce provider Venda back in July.

When the two companies spoke to CloudTech as the deal was being completed, they agreed they both “shared the same DNA”, with Pete Daffern, EMEA president at NetSuite, arguing: “It’s just us doubling down on our European investment.”

Sage’s SMB segment managing director Steve Attwell said in response to the advert: “In Sage’s world, businesses don’t run in a straight line and end. They adapt, evolve and grow.”

He added: “If Sage ran the underground, it wouldn’t be under the ground, it would not have an end of line and there would be no gaps to mind. You would get to your destination quicker, there would be no delays and you would get there with confidence.”

NetSuite is planning to announce a variety of new customers and launches at its SuiteConnect conference in London on November 10. Nelson will be delivering a keynote speech: “The Next Disruption: Collision of Product and Services Business”.

Despite its ambition, there’s still lots of work for NetSuite to do if it wants to topple Sage. The Newcastle-based firm recorded revenues of £657m for the first half of this year, compared to NetSuite’s £160m.

This feud looks like it will run and run. Take a look at the advert below – what do you think?