Category Archives: Research

UK tech spend grows at its third fastest rate in more than 15 years

Despite 90% of digital leaders in the UK expecting an economic downturn, tech spend this year is set to grow at its third fastest rate in over 15 years, More than half (52%) of digital leaders in the UK expect their technology budget to rise, and only around one in seven expect their budget to… Read more »

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86% of cloud attacks in healthcare sector lead to financial losses or other damage

61% of companies in the healthcare industry suffered a cyberattack on their cloud infrastructure within the last 12 months, compared to 53% for other verticals. This is according to the 2022 Cloud Security Report by cybersecurity vendor Netwrix. Phishing was the most common type of attack reported, followed by ransomware or other malware attacks, and… Read more »

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IBM launches quantum computing platform for public on cloud

IBM QuantumIBM has announced its quantum computing platform, Quantum Experience, will be available to the public through its cloud platform, who can access and run experiments on the company’s quantum processor.

The platform, which will be delivered onto any desktop and mobile device, will drive IBM’s efforts to redefine its perception in the industry. The company believe quantum computing is the future of computing and has the potential to solve certain problems that are impossible to solve on today’s supercomputers.

“Quantum computers are very different from today’s computers, not only in what they look like and are made of, but more importantly in what they can do. Quantum computing is becoming a reality and it will extend computation far beyond what is imaginable with today’s computers,” said Arvind Krishna, SVP at IBM Research. “This moment represents the birth of quantum cloud computing.

“By giving hands-on access to IBM’s experimental quantum systems, the IBM Quantum Experience will make it easier for researchers and the scientific community to accelerate innovations in the quantum field, and help discover new applications for this technology.”

IBM believes momentum driven from Moore’s law is ‘running out of steam’, quantum computing will be the next catalyst for innovation in the cloud computing era. The power available through quantum computing has the potential to take technologies such as artificial intelligence to the next level, as well as increasingly the long-term potential of IBM’s Watson.

Quantum computing is by no means a new idea, Richard Feynman proposed to build computers based on the laws of quantum mechanics in 1981, but is only now becoming a reality within the industry. A classical computer makes use of bits to process information, where each bit represents either a one or a zero. In contrast, a qubit can represent a one, a zero, or both at once, which is known as superposition. The outcome could result in a platform which can process calculations dramatically faster than classical computers.

Some corners of the industry could see IBM as one of the organizations who have been left in the pre-cloud era, though this announcement and the work done by the team to progress Watson is seemingly creating a new market for the business. As opposed to simply playing catch-up in the traditional cloud markets, IBM would appear to be looking further afield to redefine the perception of IBM.

Enterprises pay nearly a fifth more to use European cloud – report

Money cloudThe cloud service market in the US is much more competitively priced than in Europe but Latin America gets the worst deals in the world, according to a new study. Europeans pay up to 19% more for the same services when they are hosted in home territory.

According to the new Cloud Price Index report from 451 Research, Americans enjoy the most competitive prices globally. On average Europeans pay between 7 and 19% more, depending on the complexity of the application. Asia Pacific comes second bottom in the price performance study. However, anomalies exist and deals are available to those who shop around, says the report.

The ‘protection premium’, the extra price of hosting services in-country or in-region services, rather than using the cheaper option of US services, is not just the cost of compliance. The extra investment needed by European cloud users is a result of three pressures: the need to meet local regulations, the need to boost performance by bringing apps closer to users and the use of local customer service.

In Europe, soaring local cloud demand, driven by data protection legislation, has created uncertainty about access and responsibility and confused cloud buyers and service providers. The net effect of issues like Safe Harbor, the Patriot Act and the new US-EU Privacy Shield agreement is that european buyers will pay more.

Don’t expect that to change for the better just yet, said Penny Jones, Senior Analyst for European Services. “It won’t be clear what the European Court of Justice thinks about the legislation until they have reviewed a case or two,” said Jones.

Cloud services are even more pricey in Asia Pacific and Latin America, according to the report. Comparable hosting in Asia Pacific and Latin America can cost 38% more than in the US. Taking average prices as a benchmark, Latin America has the most extreme variations in prices, thanks to its limited selection of hosting providers.

There is also an extreme price polarity between the small and large applications in Europe. Users pay double the premium for a large application, composed of computing, storage, platforms and support, in comparison to simpler virtual machines. These discrepancies are the result of skills shortages and an SME market willing to pay more for support on complex applications.

The lesson is that cloud buyers must be more diligent about researching huge price variations according to 451 Research Director Dr Owen Rogers. “One provider charged more than twice the average US price for hosting in Latin America. Another offered an 11% discount for hosting in Europe compared to the US,” said Rogers.

Efficiency gains most compelling reason for cloud, say enterprises

SurveyThe majority of US enterprises will increase their spending on cloud computing by up to 50% this year, according to US based researcher Clutch.

Conversely, the research also indicates that 6% of enterprises will cut their spending on cloud. The survey of 300 IT professionals at medium to large enterprises could indicate the different uses for cloud computing, with some companies using it to manage costs while others use it as a strategic weapon.

The study found that nearly 30% of the sample will maintain their current levels of cloud spending, with 6% saying they will reduce their cloud computing budget. A significant minority, 47%, identified efficiency improvements as the main benefit of cloud computing. There were no figures on whether performance improvements may encourage companies to spend less money on cloud services in future however.

The statistics on the uses for cloud computing do not suggest this is a tactical, strategic investment, however. The most popular motive cited for enterprise cloud usage, in the US, would appear to be better file storage, which was nominated as the primary objective for buying cloud services by 70% of the survey. The next most popular application of the cloud, backup and disaster recovery, which was nominated by 62% of the IT professionals, is another cost item. However, the cloud was chosen for application deployment among 51% of the sample, but there was no breakdown of whether this was viewed as a cost saving measure or a tactical investment. Similarly, the figures for the numbers of buyers who used the cloud for testing, 46%, was not broken down into tactical and cost saving motives.

Storage costs are the easy win and prove the value of the cloud: tactical use may be a later development, said Duane Tharp, VP of technical sales and services at service provider Cloud-Elements. “The returns on file storage are pretty straight-forward. Every company needs file storage,” said Tharp. “The ease of adopting the cloud for file storage could prove the concept and pave the way for the adoption of other use cases later.”

Cloud merits acknowledged but adoption concerns linger – Oracle report

cloud question markCloud technology is almost universally acknowledged for its catalysing effect on invention and customer retention, according to new research from Oracle. However, there are still major barriers to adoption.

In Oracle’s study 92% of its sample group of industry leaders testified that the cloud enables them to innovate faster. It also helps companies keep afloat better, with nearly three quarters (73%) reporting that using cloud technology has helped them to retain existing customers more effectively. The cloud also comes out well as a strategic weapon, with 76% of enterprises saying that the newer, more flexible model for handling information helps them to win new customers.

However, the study conducted for Oracle by IDG Connect indicates there is much room for improvement in the adoption of cloud computing. Only half (51%) of the survey sample say their businesses will have reached cloud maturity within two years. According to an Oracle statement, this is a consequence of current uncertainty about moving to the cloud.

Though a compromise between privately owned IT systems and publicly available services is seen as the obvious choice, there are grave concerns about hybrid cloud adoption. Instead of getting the best of both worlds with a hybrid system, many users (60%) reported that the thought of managing multiple IT architectures was off putting. There are fears about the reliability and availability of network bandwidth, which was cited by 57% of the survey as a barrier to adoption. The lack of trust in the relationship with IT suppliers was also a major concern with 52% of the survey sample. Meanwhile those building private cloud infrastructures continue to see security as the prime concern, according to Oracle.

Attitudes could change, but that involves converting the considerable opposition of cloud-sceptics.  There are still significantly large numbers of IT experts who say that winning over key business decision makers is their biggest challenge. This was identified as an issue for 29% of those surveyed.

Johan Doruiter, Oracle’s Senior VP of Systems in EMEA, remained optimistic. “As cloud rapidly reaches maturity, we are seeing a shift in how enterprises perceive the chief benefits and barriers to adoption,” he said. “Traditional concerns have been replaced by the operational worries.”

CSA survey finds trust in the cloud increasing

Secure cloudSuspicion of the cloud has lifted so much that trust in cloud services is on par with on-premises applications, according to a survey by the Cloud Security Alliance.

Around 200 IT executives were quizzed about the state of cloud adoption, the evolving role of IT, and how enterprises approach cloud security. The results suggest that while trust in the cloud may be on the rise companies are trying to replicate the same security controls they did for their on-premises systems.

Cloud professionals are now caught between dual responsibilities, says the study: they are obliged to enable the business while at the same time they must tighten security. Only 35% of IT leaders believe that cloud-based systems of record are less secure than their on-premises counterparts. The other 65% say that the cloud is either more secure than on-premises software or equally secure. However, even when enterprise-ready cloud services are more secure than their own data centres, the users present more danger, which is why the ability to enforce corporate security policies is the number one barrier to moving applications to the cloud, said 68% of IT leaders. Another blockage was the need to comply with regulatory requirements (61%) and lack of budget to replace legacy systems (32%).

The top barrier to securing data is a lack of skilled security professionals as businesses are hiring IT security professionals faster than the market can train and develop experienced security professionals. In August, it was reported that JP Morgan expected to spend $500 million on cyber security in 2015, double its 2014 budget of $250 million. Rapid hiring is leading to a shortage of people to fill open positions. A 2015 report from labour analytics firm Burning Glass shows that cyber security job postings grew 91% from 2010 to 2014, more than three times the rate of growth in all IT jobs.

The most important new job is a chief IT security officer (CISO) the report found. Just 19% of companies without a CISO have a complete incident response plan while 54% of companies with a CISO have a complete incident response plan and those with a CISO are also more likely to have cyber insurance to protect against the cost of a data breach.

Public cloud service revenue forecast to top $200 billion in 2016

GrowthThis year the global public cloud services market will grow by 16.5 per cent on last year’s total of $175 billion in sales, according to market analyst Gartner. Total sales of the various cloud services will be worth $204 billion, it forecast.

The most exciting market to be in will be infrastructure services, with its 38.5% rate of expansion making it the fastest growing cloud market. Sales of infrastructure as a service [IaaS] will create $22.4billion in revenue in 2016, according to Gartner’s forecast.

Cloud advertising is the largest segment of the global cloud services market. Though it is growing at around a third of the rate of IaaS (at 13.6%) its sales in 2016 will reach $90.3 billion. The next biggest segment is predicted to be sales of business processes (BPaaS) which will be worth $42 billion, while cloud application services (SaaS) will create $37.75 billion of revenue in 2016. Surprisingly, cloud management and security will be worth a relatively lowly figure of $6.248 billion, a figure that is possibly due to expand as the cloud industry matures.

IaaS is booming because enterprises are abandoning the idea of building their own data centres and moving their infrastructure to the public cloud, according to report author Sid Nag, research director at Gartner. However, Nag had words of warning for vendors in this area. “Certain market leaders have built a significant lead in this segment, so providers should focus on creating differentiation for success,” said Nag.

This year it will be impossible to go wrong in the public cloud as high rates of growth will be enjoyed across all markets. Gartner expects this to continue through 2017, said Nag. “This strong growth reflects a shift away from legacy IT services to cloud-based services, due to increased trend of organisations pursuing a digital business strategy,” said Nag.

Public cloud spending predicted to double by 2019 with storage booming

Cloud storageThe boom in public cloud service spending will propel AWS and Microsoft into the top five of the world’s biggest storage vendors, according to analysts.

Separate reports from IDC and the 451 Group suggest that the public cloud will growth overshadow the rest of IT and change the power balance.

The latest Public Cloud Services Spending Guide from IDC predicts that global spending on public cloud services will grow at six times the rate of the rest of the IT industry. With a 19.4% compound annual growth rate (CAGR) public cloud spending will double from last year’s $70 billion to $141 billion in 2019.

The popularity of Software as a Service (SaaS) will continue as it makes up two thirds of all public cloud spending in the forecast period. However Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow faster, with spending on each rising by 27.0% and 30.6% respectively.

By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base, predicted Frank Gens, Chief Analyst at IDC. This means the software industry is at a tipping point where SaaS becomes the preferred option.

The industries with the largest public cloud services expenditures in 2015 were discrete manufacturing at $8.6 billion, followed by banking and professional services at $6.8 billion and $6.6 billion, respectively. Telecommunications will be the fastest-growing vertical industry over the 2014-2019 forecast period with a worldwide CAGR of 22.2%. Other industries expecting a five-year CAGRs of over 20% are the media, government, education, retail, transport and utilities.

“The cloud is the future of IT but every organisation’s journey to the cloud is different and won’t always result in moving to a public cloud,” said Mark Ebden, strategic consultant at Trustmarque. However, he warned that companies need to assess the functions that can be moved to the cloud with the least disruption.

The fast growth of public cloud service companies is already disrupting the storage market, according to a 451 Research study. It found that public cloud storage will account for 17% of enterprise storage spending by 2017, up from 8% today. In some verticals like retail the public cloud will account for 25% of total storage spending by 2017.

Public cloud will shift the IT budget so that more money is spent on storage, according to the report. In addition, Amazon Web Services and Microsoft will become top five storage vendors by 2017. While the traditional storage players like leader EMC can dominate now, in two years spending on traditional SAN and NAS products will be more muted, said the report. Dealing with data and storage capacity growth is by far the single greatest pain point for storage managers and improving backup and disaster recovery will be the top storage objectives for 2016, according to 451 analyst Simon Robinson.

Global spending on cloud infrastructure up 23% says IDC

Global Container TradeCompanies across the world are still furiously modernising their IT infrastructure to support cloud services, according to analyst IDC, which reports ‘healthy’ growth in this sector continues.

It notes that vendors of servers, storage and Ethernet switches are all experiencing declining revenues in traditional IT environments. The figures also indicate increasing confidence in public cloud services, claims IDC.

The latest Worldwide Quarterly Cloud IT Infrastructure Tracker from IDC compiled sales figures for Q3 2015 and found a 23% rise in revenues on the same period in 2014, with total revenue of $7.6 billion being reported by manufacturers.

Infrastructure investment is growing at a faster rate than application sales, the report noted. The proportion of cloud IT infrastructure sales in the cloud industry climbed to 33.8% in 3Q15, up from 28.7% a year ago. The revenue from infrastructure sales to the private cloud sector grew by 18.8% to $2.9 billion, while sales to the public cloud rose by 25.9% to $4.6 billion.

By contrast, Q3 revenue from sales to traditional (non-cloud) IT set ups fell by 3.2% in comparison to the previous year’s third quarter, with sales of three technology segments (servers, storage and Ethernet switches) all going into decline in the non-cloud sector. However, all three technology markets showed compensating growth in the cloud sector. Strong year-over-year growth in both private and public cloud segments is reported, with server sales leading the charge in the private cloud sector, growing at 24.3%. Meanwhile, in the public cloud, sales of Ethernet switches are growing fastest of all equipment types, rising by 37.8%. Public cloud spending on storage grew 26.7% year on year.

This healthy double-digit growth in cloud IT deployments indicates an increasing preference for public cloud infrastructure according to Kuba Stolarski, Research Director for Computing Hardware and Platforms at IDC. “As public cloud offerings continue to improve in reliability and security, customers are becoming more comfortable with the flexibility they get from these these elastic environments,” said Stolarski.

Sales in Japan grew fastest in Japan at 47.1% year over year, followed by Asia/Pacific (excluding Japan) at 35.3%, Western Europe at 22.1%, Canada at 22.0% and the United States at 20.1%. However sales in Central and Eastern Europe fell 10%, which IDC attributed to political turmoil.

“As public cloud continues to becomes the de-facto choice for compute, users will greatly benefit from the next generation of container technology, which will enable true usage-based billing and flexible IT infrastructure that scales according to demand – rather than the fixed instances set by the provider,” commented Richard Davies, CEO of ElasticHosts. “It’s time for public cloud to deliver the next generation of infrastructure to customers and bring utility computing to the present so customers can stop paying for capacity they’re not using.”