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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?

Cloudy storage provider Dropbox has announced a strategic partnership with Microsoft whereby the service is being integrated more closely with Microsoft Office 365.

Dropbox customers will be able to access their accounts directly from Office apps, edit Office files from the Dropbox app, as well as sharing Dropbox links from Office.

In a blog post on the Dropbox website, head of product Ilya Fushman wrote: “We know that much of the world relies on a combination of Dropbox and Microsoft Office to get work done. That’s why we’re partnering with Microsoft to help you do more on your phones, tablets, and the web.”

The new features will be rolled out onto iOS and Android users, with Dropbox also confirming plans for a Windows Phone and Windows tablet app.

Satya Nadella, Microsoft CEO, has long been using the term ‘mobile-first’ and ‘cloud-first’ in his missives, almost for continuity now as much as anything else. In this instance, it’s more about enterprise and collaboration. “In our mobile-first and cloud-first world, people need easier ways to create, share and collaborate regardless of their device or platform,” he said.

“Together, Microsoft and Dropbox will provide our shared customers with flexible tools that put them at the centre for the way they live and work today.”

The news has come as a bit of a shock to many commentators, but it’s an interesting partnership from both ends. Dropbox has been looking for more of an enterprise focus, especially as it’s been losing out in that battle to Box, who has gained customer wins in the form of General Electric in recent months.

Similarly, Microsoft would be relishing this partnership as it gives the tech giant assurances it will “play nicely” with competitors. Gartner analyst Jeff Mann told the Guardian: “Both of them decided that they’re not really a threat. If they can work with each other, against the common enemy Google, primarily, or to some extent Box, or the other competitors that are in this market.”

What’s your view?

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A benchmark report by Adallom into the uptake of software as a service (SaaS) applications has found that Salesforce customers have the highest percentage of privileged access users – and warned about the problems that may cause businesses.

On average 7% of users on Salesforce accounts are privileged or have admin access, compared with 4% for Google Apps, 2% for Box and 1% for Office 365, the other three services analysed.

The report gave a grave warning over the prevalence of “super admin” accounts – ones with complete and unrestricted access to the SaaS. “A compromised “super admin” account represents a much greater threat to an organisation because it has access not only to view and edit privileged data, but also to modify access rights of other privileged users,” the report notes.

Regular readers of CloudTech will remember the unfortunate story of Code Spaces, the cloud provider which had to wave the white flag in June this year due to a DDoS attack. While their service was Amazon Web Services EC2, the hackers got in to the admin control panel, before creating backup logins and deleting data, backups and machine configurations.

“Customers, not vendors, are responsible for risk management,” the report notes. “While most enterprise SaaS providers have built-in support for two-factor authentication and IP restrictions that can be used with user accounts, sophisticated attackers can circumvent those controls through session hijacks and targeted malware.”

One customer in the study found over 100 Salesforce users with admin privileges. But that’s not the biggest problem.

11% of SaaS accounts are ‘zombie’ accounts according to the study; accounts which haven’t been touched for three months. There are perfectly good reasons why this could be the case, such as maternity leave. Yet 80% of companies still have at least one account on the system of a suspended or terminated employee.

These dormant accounts are the perfect opening point for hackers, the report argues. “An inactive account does not only represent a security risk, it’s also a financial burden on the company,” it argues. “In many of the organisations we protect, we often see double digit percentages of zombies – these are licenses which the company is paying for even though they aren’t being used.”

Similarly scary is the finding that the average company shares its files with 393 external domains, while 29% of employees share 98 corporate files with their personal email accounts on average. It can happen unintentionally through sync agents, but again it represents a serious security risk.

What’s more, 92% of respondents in a recent Forrester survey indicated their security controls for SaaS applications were effective. “Security professionals with this mindset are rolling the dice with their sensitive data,” said Forrester’s Andras Cser. “Perimeter and endpoint protections provide minimal protection against new, emerging and largely unknown threats.”

Earlier this week a report from Databarracks found that human error was responsible for one in five data loss incidents.

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By 2018, 78% of workloads will be processed by cloud data centres, while annual global cloud IP traffic will reach 6.5 zettabytes (ZB).

These are the two main takeaways from Cisco’s latest Cloud Index study, which aims to show the extent of growth of global data centre and cloud-based IP traffic.

Annual global data centre IP traffic will reach 8.6 ZB by the end of 2018, up significantly from last year’s total of 3.1 ZB. Workload density for cloud data centres will reach 7.5, up from 5.2, whilst global cloud IP traffic will nearly quadruple over the next five years.

By 2018, 69% of global cloud workloads will be in private cloud data centres, with the remaining 31% in private. More than half (59%) will be software as a service workloads, compared to 28% IaaS and 13% PaaS. This represents a downturn for infrastructure as a service, which currently represents 44% of cloud workloads, however, over five years each sector will still see a significant compound annual growth rate (CAGR) – 33% for SaaS, 21% for PaaS and 13% for IaaS.

The report notes that in the private cloud, the majority of deployments were IaaS and PaaS, while th public cloud saw predominantly SaaS deployments.

2 billion people will be using cloud storage in 2018, while the global data created by Internet of Things devices will top 403 ZB each year. These are huge numbers, but the current figures are still extensive – 113.4ZB of IoT data and 922 million users of cloud storage in 2013.

According to the index, significant promoters of cloud traffic growth include the rapid adoption of cloud architectures, as well as the ability of cloud data centres to handle higher traffic loads.

Elsewhere the research found that IPv6 adoption will fuel cloud growth. Globally, the report shows that nearly a quarter (24%) of Internet users will be IPv6-ready by 2018, with nearly half of all fixed and mobile devices IPv6 capable. As of May this year, more than 96% of Internet traffic worldwide is still carried on the elderly IPv4 protocol.

The public versus private cloud discussion in the report will certainly be of interest to those who wrote Verizon’s yearly offering on the state of enterprise cloud computing, which decried that particular debate as “inadequate to describe the massive variety of cloud services available today.”

You can find the full 41 page report here.

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Another day, another report bemoaning shadow IT for cloud computing. SafeNet’s Challenges of Cloud Information Governance study, conducted by the Ponemon Institute, is the latest to put the blame of compromising data at the door of unapproved IT activity.

Shadow IT, which involves employees bypassing company policy on website and technology usage, has meant cloud security is “stormy”, according to the report. More than half (55%) of the 1,864 IT and IT security practitioners surveyed admitted they were “not confident” that IT knows all the cloud computing services in use at their company.

Respondents added that payment information (56%) was the data that presented the greatest security risk, ahead of customer information (50%), consumer data (34%) and email (23%). Payment info, however, was the least likely to be stored in the cloud, probably as a result of this risk.

Part of the problem for IT managers is that conventional security methods are difficult to enforce with cloud apps and products. 71% of respondents agreed with that statement, while around half (48%) believe it’s more difficult to control or restrict end-user access. Similarly, 61% said cloud increases the compliance risk, compared to only 8% who thinks it goes down.

Another problem, as the survey revealed, was the age old question of who is responsible for cloud data: the end user, or the cloud provider? It’s still not been answered. 33% argued it was the cloud user’s responsibility, 32% said the provider, while 35% said it was a shared responsibility.

Similarly, there is a lack of encryption in software as a service (SaaS) applications. Three quarters of respondents say they use document sharing and online backup tools, but only 28% say their organisation encrypts sensitive data directly within these apps.

As enterprise cloud usage will inevitably increase in the coming years, the 30 page full report (pdf here) paints a fairly bleak picture. SafeNet goes through seven reasons why cloud governance is a challenge:

• Uncertainty about who is accountable for safeguarding confidential or sensitive information stored in the cloud
• IT is out of the loop when companies make decisions on the usage of cloud resources
• IT functions are not confident they know all the cloud resources being used
• Companies say encryption is important, but aren’t walking the walk on protecting apps
• An inability to control how employees and third parties handle sensitive data makes compliance more difficult
• More employees are using cloud apps without appropriate security training
• Third parties are allowed to access sensitive data without security reinforcement, such as multi-factor authentication

Shadow IT is often blamed for this lapse in security. Can you be certain as a CIO or senior manager that your workforce isn’t using Dropbox to ping over collaborative documents, for instance? A blog from MobileIron back in March pondered the question: “If an auditor had full access to your Dropbox account right now, would they find a single bit of corporate data that shouldn’t be there?”

In almost all of the cases, it’s difficult to say no. So what’s the solution? Blacklisting apps is a brute force method, although innovative employees can find many ways to break the system, whether it’s for malicious purposes or just an honest attempt to be more productive. As a CloudTech article mused yesterday, your employees are a bigger risk to data loss than cybercriminals.

Education, and increased visibility into cloud app usage is key to mitigating the risk of shadow IT, the report concludes – and it’s a good starting point. If you keep your head in the sand and pretend there isn’t a problem, your data could be seriously at risk.

The Physical Web incorporates beacons that can be put in any small retail store, for example, so that every store now has «an app» for its customers.
In this Birds-of-a-Feather session at Internet of @ThingsExpo, Scott Jenson, Product Designer at Google, will discuss the Physical Web and how it is an open standard so any device can broadcast a URL wirelessly, so any phone/tablet/watch nearby can see, and rank those devices. When the user taps on one, they just go to that web page. It’s really that simple. It’s about thinking small, enabling micro-information (what is in my prescription bottle) or micro interaction (can I buy a candy bar).

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Harbinger Systems, a leading provider of software engineering services, returns to Silicon Valley this November to participate in Cloud Expo Silicon Valley, the high-octane Cloud Computing, IoT & Big Data event produced by SYS-CON Events. The event will be held at the Santa Clara Convention Center in Santa Clara, CA, from November 4-6.
Harbinger Systems is participating as a speaker and an exhibitor at the event. Attend our technical session ‘New Possibilities with Cloud-based Healthcare Records’ on November 5th from 8.30-9:05 AM. The session will provide insights about cloud adoption in healthcare revolving around Electronic Health Record [EHR] based systems.

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