From cut-throat competition, eyebrow-raising co-opetition, and major advances in cloud-based machine learning, 2017 was a pivotal – and productive – year for the cloud, setting the stage for what looks likely to be the most exciting year yet. 

The market swing is already in full force. Thanks to a full-fledged embrace by the enterprise, the cloud is undergoing dramatic transformation as vendors rush to meet the infrastructure and business needs of today's top companies. According to Gartner, the overall market likely grew by close to 20 percent in 2017, and IaaS in particular saw close to 40 percent growth. With digital transformation at the top of every executive's mind, it's likely that this trend will only accelerate. In fact, by 2020, Gartner estimates that the overall market will reach a whopping $411 billion, and IaaS $72 billion, 87 percent and 185 percent raises respectively from 2016. 

What we considered in the realms of "crazy" 10 years ago is now a reality, and the leapfrogging will continue. Based on our collective experience, interactions with customers and conversations with colleagues, here are four key trends we see unfolding in 2018: 

Deep learning 

There's no doubt that 2017 was the year of machine learning. Culminating in the blockbuster announcement of Gluon, a brand new cloud-based open source machine learning platform, as well as other advances in technologies, ML is finally set to become a real part of the enterprise business strategy. 

While advances in ML will continue in 2018, expect this to lead major breakthroughs with deep learning as well. According to a new survey from Vanson Bourne, 80 percent of enterprises already have a form of AI in production today, and 30 percent are planning to expand their capabilities over the next three years. Cloud providers are already anticipating this need, as some already allow enterprises to leverage GPUs (the key piece of technology for deep learning) for massive parallel computational power. Expect to see an explosion of deep learning, as the costs for this service drop thanks to commodification and more cloud providers offer the service. 

Smart cloud infrastructure 

As major advances in automation and machine learning continue to make pace, expect to see the beginnings of more smart and automated cloud infrastructures, ones that go beyond traditional automation and can actually make seemingly human-like decisions about important issues around authorisation, security, vMotion, dynamic resource scheduling, load balancing, and self-healing environments. This will change the way IT departments approach technology, with the same impact that virtualisation had when it was introduced to the market in 2003. 

The "instant" private cloud 

There may be quite a few disadvantages for enterprises using a public cloud, but there is one main draw that keeps people coming back: the simplicity of setup. As a result, despite all the drawbacks, many companies continue to leverage public cloud for this reason alone, but with an eye to providers focused on mission-critical workloads. 

In the coming year, expect mission-critical cloud providers to bring the public cloud experience on-premises. Private cloud vendors will provide their own "one-click" setups for customers that will go well beyond just having a server that is instantly up and running. Instead, you'll get one that is pre-configured to the specific needs of your enterprise before you even turn it on. 

Continued co-opetition among cloud vendors 

Although 2017 had its fair share of drama, it was also very much the year of market maturation. For example, VMware teamed up with AWS and Pivotal announced a partnership with Google Cloud, all for the good of the customers. 

Cloud providers have three options: the expensive route – they can go it alone, spend hundreds of millions of dollars on acquisitions, or they can partner with their competitors to build ecosystems that meet the unique needs of their customer base. 

This year, expect to see more interesting (and unexpected) partnerships develop, as cloud providers compete to meet the needs of customers. It certainly looks as if 2018 will be the year of the specialised cloud.

Hackers have been running crypto mining scripts on unsecured Kubernetes instances owned by Tesla, according to new research from security monitoring provider RedLock.

According to the study, which analysed public cloud environments monitored by RedLock – more than 12 million resources processing petabytes of network traffic – the unsecured Kubernetes pod exposed access credentials to Tesla’s Amazon Web Services (AWS) environment. From there, the environment contained an AWS S3 bucket which held sensitive data, such as telemetry.

While the issue was quickly closed off – it was immediately reported to Tesla by RedLock and rectified before it became public – the more interesting use case is around cryptojacking, whereby unused CPU resources on unwitting users’ machines are targeted to help mine cryptocurrencies.

A blog post from the company explained how the operation was carried out. The hackers, instead of using a ‘mining pool’ – where processing power is shared over a network to split the reward equally dependent on how much work was put in – installed mining pool software which was then configured to an unlisted endpoint. The real IP address was also hidden behind CloudFlare, while the hackers had ‘most likely’ purposely configured the mining software to keep CPU usage low.

All told, the measures meant IP address-based detection of the crypto mining activity was far more difficult. RedLock added that monitoring configurations, user behaviour and network traffic, and correlating the latter with configuration data, could help in tracking similar issues.

While there are some examples of crypto mining which are transparent – US news website Salon asking visitors to go through with the process if they have an ad blocker installed being a case in point – many are much more sinister. “The skyrocketing value of cryptocurrencies is prompting hackers to shift their focus from stealing data to stealing compute power in organisations’ public cloud environments,” the RedLock blog explained. “The nefarious network activity is going completely unnoticed.”

Cloud security best practices

On a wider theme, however, the report once again assesses the importance of the shared responsibility model in cloud computing. Almost three quarters (73%) of organisations analysed use their public cloud root user account to perform activities.

This creates a serious issue with data getting into the wrong hands; and indeed, AWS strongly advises such activity. Think of the AWS account key as like a credit card number and protect it as such, the company says in its best practice guide. As this publication has reported on several occasions, a provider such as AWS has security ‘of’ the cloud – data centre, hypervisor, routers and so on – while the organisation is responsible for security ‘in’ the cloud.

A couple of stories which have broken in the past week shed light on this. Last week, the BBC reported on a service called Buckhacker, which allowed users to trawl S3 buckets for unsecured sensitive data, while yesterday another story found security researchers had posted ‘friendly warnings’ to companies whose private content had been made public.

At the time of the Buckhacker release, Mark Hickman, chief operating officer at WinMagic, said organisations ‘must fulfil their part of the shared responsibility deal’ with regards to cloud security. “Customers should encrypt all data before it is placed in the cloud,” he said. “It is the last line of defence if a hacker gains access to their cloud services.

“Equally important is that encryption is employed where the keys are centrally managed and remain under the customer’s constant control, and the keys never stored on a public cloud service, or servers that could be exposed to a hack,” Hickman added.

The RedLock report shows this is less than common practice – and it is a concern shared by the company.

“In our analysis, cloud service providers such as Amazon, Microsoft and Google are trying to do their part, and none of the major breaches in 2017 was caused by their negligence. However, security is a shared responsibility,” said Gaurav Kumar, CTO of RedLock.

“Organisations of every stripe are fundamentally obliged to monitor their infrastructures for risky configurations, anomalous user activities, suspicious network traffic, and host vulnerabilities,” Kumar added. “Without that, anything the providers do will never be enough.”

You can read the full RedLock report here (email required).

Information and communications technology (ICT) is an enabler of economic progress, and a driving force of the Global Networked Economy. Those organizations that have mastered the applications of next-generation technologies are making waves of market disruption everywhere. That said, expect more of the same, at an accelerated pace in future.

Worldwide spending on ICT will be nearly $4 trillion in 2018, according to the latest global market study by International Data Corporation (IDC). Ongoing growth will be driven by enterprise investment on cloud services, software and hybrid IT infrastructure.

Global ICT market development

The consumer market will account for more than $1.5 trillion in ICT spending in 2018 and will deliver more than one third of all worldwide spending throughout the forecast period. Consumer spending will also experience the slowest growth over the forecast period with a CAGR of 1.2 percent. Roughly 80 percent of consumer spending will go to devices and mobile telecom services.

Banking, discrete manufacturing, telecommunications, and professional services will be the four largest industries for ICT spending in 2018 at more than $900 billion combined. While all four industries will invest heavily in applications, infrastructure, outsourcing, and telecom services, spending levels will vary depending on industry needs.

Banking will invest the most in IT outsourcing and project-oriented outsourcing ($115 billion combined) while telecommunications spending will be led by infrastructure purchases ($85 billion). Professional services and banking will experience the fastest growth in ICT spending with five-year CAGRs or 5.9 percent and 5.2 percent, respectively.

The United States will see $1.3 trillion in ICT spending in 2018 making it the largest geographic market this year and throughout the forecast, with spending expected to grow at a CAGR of 3.6 percent. China will be the second largest market for ICT spending at $499 billion this year with solid growth (5.2 percent CAGR) forecast through 2021.

Japan, the UK, and Germany will round out the top five countries for ICT spending in 2018. The countries that will experience the fastest ICT spending growth over the 2016-2021 forecast period are the Philippines (7.5 percent CAGR), India (7 percent CAGR), and Peru (6.7 percent CAGR).

"The growth of technology spending in the U.S. professional services industry is propelled by the tech-savvy firms that comprise it. Meanwhile, banks and retailers share the common desire to deliver a delightful, cohesive, channel-agnostic customer experience. These initiatives are enabled by technology investments to help organizations unite their physical and online worlds," said Jessica Goepfert, program director at IDC.

In terms of company size, the small office category will account for 7 percent all ICT spending throughout the forecast period. Most of this spending (around $100 billion per year) will go toward fixed and mobile telecom services, while devices will also be a significant spending category.

On the other end of the spectrum, very large businesses will account for more than 50 percent of all ICT spending throughout the forecast. These businesses will focus the majority of their spending on IT outsourcing, project-oriented outsourcing, applications, and infrastructure as they pursue their digital transformation strategy.

The spending patterns for small businesses will closely resemble those of the small office category with slightly more spending going toward applications and outsourcing. Medium and large businesses will experience more balanced spending across all technology categories.

Outlook for global IT investments

Spending on information technology (IT) will reach $2.16 trillion this year, led by business and consumer spending on devices, applications, IT outsourcing, and project-oriented outsourcing — including application development and system and network implementation.

In addition, more than $300 billion will be spent on business process outsourcing and business consulting services this year. Telecommunications spending is forecast to be $1.5 trillion this year, with 95 percent of the total going to fixed and mobile telecom services.

Mobile phones will be the largest segment of technology spending at nearly $500 billion in 2018, followed by mobile data and mobile voice at more than $400 billion each.

Spending on public cloud services in the Asia Pacific region – excluding Japan – will hit $15 billion in 2018, representing an increase of 35% over the year before, according to IDC.

The findings show that while annual spending growth in the APeJ region will slow between the 2016 and 2021 forecast period, 2021 will see a total of $32.27bn. Spending on public cloud services this year will be driven by banking, with a spend of $1.85bn, ahead of professional services ($1.75bn) and discrete manufacturing ($1.63bn).

Infrastructure as a service (IaaS) will be the largest category of public cloud spending this year, IDC says, as global data centre providers gain more traction in the region. IaaS will contribute almost half (47.6%) to overall cloud spending in the region, just ahead of software as a service (SaaS) on 45.8% and well ahead of platform as a service (PaaS), although application platforms, which are part of the PaaS bucket, will see the quickest spending of all the areas.

Of the countries analysed in the APeJ region, China will be seen as the largest market for public cloud services in 2018 with $5.44bn, or around 36% of the overall spend. Australia, at $2.85bn, and India ($2.12bn), in second and third.

“China and India, the two largest markets in APeJ will account for about 60% of the region’s cloud market size,” said Ashutosh Bisht, IDC Asia Pacific research manager for customer insights and analysis. “The Chinese government has been actively promoting the development of the high-tech industry, and continues to implement its Internet+ strategy is a leading factor for China’s adoption to cloud technology.

“For India, accelerated demand by enterprises and government towards the implementation of new technology like blockchain, AI [and] IoT is making the cloud a bare necessity,” Bisht added.

According to the most recent report from the Asia Cloud Computing Association (ACCA), Hong Kong was seen as the most ‘cloud-ready’ Asia Pacific nation, ahead of Singapore and New Zealand. Australia and Japan finished fourth and fifth respectively, with China down at #13.

Storage provider Cloudian says it has achieved record growth for the third year in a row, with revenues up in every geographic segment and particular expansion in Europe.

The company’s results ‘point to the exploding need for scale-out storage solutions in an era when artificial intelligence, machine learning, IoT, high-resolution video and other data-intensive applications require businesses to manage data that is growing at an unprecedented rate’, in Cloudian’s own words.

Cloudian offers petabyte-scalable object and file storage, with its primary products, HyperStore and HyperFile, being based on object storage and enterprise network attached storage (NAS) file services respectively. Last month, the company issued its most recent update to HyperStore, the most interesting feature being around multi-cloud capability. Users can now employ a single API to access storage assets on-prem and in public clouds, including Microsoft Azure, Google Cloud Platform and Amazon Web Services. Other features include unified data management and scale-out architecture.

Among the list of achievements Cloudian was crowing about in 2017 included growing its customer base by 100%, an extended EMEA presence with new teams in France, Germany and Italy, as well as expanding to 130 employees. On the partnership side, alongside the hyperscalers mentioned above, HP Enterprise, Lenovo and Cisco were mentioned. Cloudian also explored AI use cases and partnerships in 2017, including NVIDIA and Xcompass.

“Throughout 2017, Cloudian delivered record-high revenues in all four quarters by responding to the tsunami of data that modern technologies are creating,” said Michael Tso, CEO of Cloudian in a statement. “This growth was accompanied by an equally remarkable growth in repeat customer revenue, which is a testament to our employees’ and partners’ commitment to solving our customers’ expanding need for innovative storage solutions.”

The company has thus far raised $79 million in capital, the most recent being a $41m series D round in October 2016.

Juniper Networks has announced the launch of an expanded portfolio which includes helping organisations become ‘multi-cloud ready’.

The Sunnyvale-based network and infrastructure provider is including a variety of new offerings in the data centre, campus and branch aspects.

On the campus side – ‘recognising that campus networks will play an integral role in multi-cloud security and operations’, as the company puts it – the features include simplified management as well as new switches. For branch networks, Juniper is launching a new network services platform, while the company is also unveiling a secure cloud connectivity offering.

Each new product is going to be powered by the Juniper Networks Junos operating system, the company added.

“The promise of multi-cloud is to deliver an infrastructure that is secure, ubiquitous, reliable and fungible and where the mitigation of workloads will be a simple and intuitive process,” said Bikash Koley, Juniper chief technology officer. “For IT to be successful in becoming multi-cloud ready, it is critical organisations consider not only the data centre and public cloud, but also the on-ramps of their campus and branch networks.

“Otherwise, enterprises will face fractured security and operations as network boundaries prevent seamless, end to end visibility and control,” added Koley.

The argument around campus networks becoming vital to multi-cloud operations is an interesting one. Writing for this publication back in 2016, Ayu Shah, director of systems and sales engineering at networking provider Pica8, argued that in the coming years campus networks will ‘become far more complex and difficult to manage’ through traditional element and network management systems. “Software-defined networking is an ideal methodology to push policies to campus networks in a systematic and automated way,” wrote Shah.

You can find the full list of Juniper’s announcements here.