Public cloud gathering momentum in India – Gartner

Few countries are speeding towards the digital economy as quickly as India, and it seems the bug is catching as enterprise organizations start to surge spending on the public cloud.

Today’s India is almost unrecognisable from bygone years. With a renewed focus on digital from Government and regulatory agencies, telcos finally spending on networks and consumers demonstrating an incredible appetite for data, India is quickly closing the divide. An increase in public cloud spending only adds further confidence in progress.

“Moving to the cloud and investing in public cloud services have become imperative to the success of digital business initiatives,” said Gartner Analyst Sid Nag.

“It’s no longer a question of ‘why’, but a matter of ‘when’ organizations can shift to the cloud. We have entered the cloud 2.0 era, where organizations are adopting a cloud-first or a cloud-only strategy.”

Those who are of a certain age will remember the excitement which was drummed up around the ‘BRIC’ nations. The acronym described the economic potential of slumbering giants (Brazil, Russia, India and China), four countries with large population that were supposed to be the growth engines for international businesses around the world after growth in domestic markets slowed.

China certainly offered fortunes for those who were strategically savvy enough, while there has been some promise in Russia and Brazil. India was always the nation which undermined the BRICs theory, though it is quickly entering its own digital era.

According to Gartner estimates, public cloud investment from enterprise organisation will increase by 25% over the next 12 months. Software-as-a-Service (SaaS) remains the largest segment, representing 42% of all investments, though this is the same journey many ‘developed’ nations took in bygone years. The team estimates SaaS cloud application services will total $1.4 billion over the next 12 months, an increase of 21%.

Segment 2018 2019 2020
Platform-as-a-Service (PaaS) 284 363 461
Software-as-a-Service (SaaS) 900 1,105 1,364
Business-Process-as-a-Service (BPaaS) 172 189 212
Cloud management and security 187 228 274
Infrastructure-as-a-Service (IaaS) 558 744 996

Figures in millions (US$)

As you can see from the figures above, spending has been steadily increasing year-on-year, though considering the size of India as a country, the potential is significant. However, there might be a challenge on the horizon unless all the cogs click into place.

CIOs across the market are suggesting there could be consolidation in the market as smaller players are replaced by the global power houses of the cloud economy, however with such potential money will have to be spent to ensure the digital infrastructure is in place.

This is where India has traditionally struggled. It was a ‘chicken and egg’ situation, with low ROI discouraging infrastructure investment, though inadequate infrastructure seemed to hobble potential profits. This conundrum does seem to be in the past, though there is still plenty of work to do to increase the data centre footprint, as well as ‘fibering up’ the nation to take advantage of future applications, both consumer and enterprise.

Amazon Web Services announced in May it would open a new Availability Zone in the AWS Asia Pacific (Mumbai) region due to customer demand, Microsoft Azure currently has three Availability Zones in the country and has partnered with Reliance Jio to boost its presence, Google is currently hiring very aggressively in the country, while IBM recently said it was focusing more acutely on SMEs to gain traction.

India still does not compete with the top nations around the world when it comes to digital readiness, but all the pieces do seem to be falling into place. Increased investments in public cloud services and infrastructure is more evidence this country is flying towards the digital economy.

Amazon taunts Oracle over database switch

Amazon’s consumer division has completed the switch of its databases from Oracle to AWS, which took to opportunity to publicly gloat.

In a blog post Chief Evangelist for AWS Jeff Barr did his job and banged on about how great AWS is. The pretext was the completion of the lengthy process of migrating the databases of Amazon’s massive consumer division from Oracle to AWS. According to Barr it has resulted in a 60% reduction in the costs of running Amazon’s databases. He also said other customers have reported a 90% saving, which makes you wonder what Amazon is doing wrong.

“Over the years we realized that we were spending too much time managing and scaling thousands of legacy Oracle databases,” evangelised Barr. “Instead of focusing on high-value differentiated work, our database administrators spent a lot of time simply keeping the lights on while transaction rates climbed and the overall amount of stored data mounted. This included time spent dealing with complex & inefficient hardware provisioning, license management, and many other issues that are now best handled by modern, managed database services.”

What a nightmare eh? Thankfully the migration of 75 petabytes of data went without a hitch, according to Barr, which must be true because he definitely would have evangelised about the problems if there had been any. In case there was any remaining doubt about how rubbish Oracle is compared to AWS he provided this handy graphic.

aws oracle

While we wouldn’t suggest for one second that an Amazon evangelist might in any way favour Amazon, it’s hard to gauge the significance of this moment. Under normal circumstances the loss of one of the biggest companies in the world would have been fairly disastrous news for Oracle. But since Amazon got into the database game it was just a matter of time, so Oracle’s probably not too bothered.

Amazon has managed to bottle fear, but recognition debate remains

While facial recognition technologies are becoming increasingly controversial, it is always worth paying homage to innovation in this field and the real-world applications, when deployed responsibly.

We suspect people aren’t necessarily objecting to the concept of facial recognition technologies, but more to the application and lack of public consultation. You only have to look at some of world’s less appetizing governments to see the negative implications to privacy and human rights, but there are of course some significant benefits should it be applied in an ethically sound and transparent manner.

Over in the AWS labs, engineers have managed to do something quite remarkable; they have managed to bottle the concept of fear and teach its AI programmes to recognise it.

“Amazon Rekognition provides a comprehensive set of face detection, analysis, and recognition features for image and video analysis,” the company stated on its blog. “Today, we are launching accuracy and functionality improvements to our face analysis features.

“With this release, we have further improved the accuracy of gender identification. In addition, we have improved accuracy for emotion detection (for all 7 emotions: Happy, Sad, Angry, Surprised, Disgusted, Calm and Confused) and added a new emotion: Fear.”

When applied correctly, these technologies have an incredibly power to help society. You only have to think about some of the atrocities which have plagued major cities, but also the on-going problems. Human eyes can only see so much, with police and security forces often relying on reports from the general public. With cameras able to recognise emotions such as fear, crimes could be identified while they are taking process, allowing speedier reactions from the relevant parties.

However, there are of course significant risks with the application of this technology. We have seen in China such programmes are being used to track certain individuals and races, while certain forces and agencies in the US are constantly rumoured to be considering the implementation of AI for facial recognition, profiling and tracking of individuals. Some of these projects are incredibly worrying, and a violation of privacy rights granted to the general public.

This is where governments are betraying the promise they have made to the general public. Rules and regulations have not been written for such technologies, therefore the agencies and forces involved are acting in a monstrously large grey area. There of course need to be rules in place to govern surveillance practices, but a public conversation should be considered imperative.

Any time the right to privacy is being compromised, irrelevant as to whether there are noble goals in mind, the public should be consulted. The voters should choose whether they are happy to sacrifice certain privacy rights and freedoms in the pursuit of safety. This is what transparency means and this is exactly what has been disregarded to date.

Facebook is reading minds while Amazon perfects text-to-speech

A Facebook-funded study has achieved a breakthrough in decoding speech directly from brain signals at the same time as AWS has made automated speech more realistic.

The study funded by the creepily-named Facebook Reality Labs was conducted by San Francisco University. Its findings were published yesterday under the heading ‘Real-time decoding of question-and-answer speech dialogue using human cortical activity’. It claims to have achieved breakthroughs in the accuracy of identifying speech from the electrical impulses in people’s brains.

The clever bit doesn’t seem to have anything to do with the actual reading of these impulses, but in using algorithms and context to narrow down the range of possible sounds attributable to a given piece of brain activity. This helps distinguish between words comprised of similar sets of sounds and thus improve accuracy, with a key piece of context being the question asked. Thus this breakthrough is as much about AI and machine learning as anything else.

At the same time Amazon Web Services (AWS) has announced a new feature of its Polly text-to-speech managed service. The specific announcement is relatively minor – the ability to give the resulting speech a newsreader style of delivery – but it marks a milestone in the journey to make machine-generated speech as realistic as possible.

When you combine the potential of these two developments, two eventualities spring to mind. The first is an effected cure for muteness without the need for interfaces such as keyboards, which would be amazing. The second is somewhat more ominous, which is a world in which we can no longer be sure we’re communicating with an actual human being unless we’re face-to-face with them.

The AWS post makes joking reference to HAL 9000 from the film 2001: A Space Odyssey, but thanks in part to its own efforts and those funded by Facebook, that sort of thing is looking less like science fiction and more like science fact with every passing day.

 

Do you have some clear ideas about how the edge computing sector is developing? Then please complete the short survey being run by our colleagues at the Edge Computing Congress and Telecoms.com Intelligence. Click here to see the questions.

Amazon made obscene amounts of money in 2018

Internet giant Amazon made $232.9 billion last year, which was up 31% from the previous year.

The increase was almost exactly the same percentage at the previous year, indicating Amazon’s impressive growth is showing no sign of slowing. Its Q4 revenue growth was a mere 20% to $72.4 billion, but net income was up 58% to $3 billion, which helped amazon reach $10.1 billion net income for the full year, more than triple what it managed in 2017.

By far the main reason Amazon is suddenly so much more profitable is AWS – its cloud services division. Considering its origins as a way to monetize surplus datacentre capacity, it’s especially impressive that this division raked in $25.6 billion last year, yielding an operating income of $7.3 billion. For some reason CEO Jeff Bezos chose to bang on about Amazon’s voice UI platform Alexa instead in his earnings comments.

“Alexa was very busy during her holiday season,” he said. “Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year. The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear.

“In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017. We’re energized by and grateful for the response, and you can count on us to keep working hard to bring even more invention to customers.”

Great, thanks for that Jeff. One other business segment that’s worth noting is appropriately enough, ‘other’. This covers advertising – in this case premium positioning on the Amazon site, especially for Prime subscribers of which there are over 100 million – and it doubled its revenue in the quarter. Thankless investors still drove Amazon’s share price down by 5%, ironically enough, after it announced it expects to increase its investment spend this year.

Alibaba Cloud opened two data centres in London

The e-commerce giant Alibaba is challenging Amazon and Microsoft in cloud service by adding London to its global data centre map.

If anything can indicate that the world is still confident in the UK as a business hub, amidst all the confusions over deal or no deal of Brexit, new investment from Alibaba can certainly do. The cloud service division of the e-commerce giant, Alibaba Cloud, announced on Monday that it is opening two data centres in London.

“Our decision on the location is driven by the rapidly growing customer demand in the U.K. The United Kingdom is one of the fastest growing European markets for Alibaba Cloud,” said an Alibaba spokesperson. “We are also working with many global and local partners to make sure we are offering best-in-class technologies, services and consulting to customers.”

Among the services the data centres will provide include a so-called “elastic computing”, which is a dynamic system to manage traffic spikes in the network, as well as deliver application services and big data analytics. Alibaba Cloud’s UK clients come from sectors like retail, finance, media, education, research, and logistics, and include public companies like the software maker SDL and the B2B media and event company Ascential.

Cloud service has become a key battlefield for the webscale companies and are clearly delivering results for the market leaders. Over 60% of Amazon’s operating income was from AWS, its cloud service division, in the first half of 2018, while Azure has been the most stellar performer among all Microsoft products.

Meanwhile cloud services have also attracted unwelcome following. According to a report by PwC, “Red Apollo”, a hacking group based in China, launched a series of sustained cyber-attacks last year, specifically targeting cloud service providers. The logic goes that, if they could break the defence of a major cloud service, they would be able to spread spying tools and malware to all the companies on these outsourcing services.

London joins Frankfurt to form Alibaba Cloud’s network in Europe. By the time the new data centres are up and running the company will have 52 data centres sites in 19 regions for its cloud service.

Amazon, Supermicro and Apple call BS on Chinese spying sting – someone is lying

Amazon, Supermicro and Apple have released statements denying they have ever found any malicious microchips on their hardware calling into questions the validity of Chinese espionage claims.

Yesterday Bloomberg pulled back the curtain on an apparent three year-old US government into one of the most intrusive and intricate espionage campaigns, fuelled by the Chinese government. Should the claims be proven true, it would certainly add weight to the political paranoia which has been whipping the anti-China rhetoric into a frenzy, though the major players have denied all knowledge of the malicious microchips and the resulting investigation.

“As we shared with Bloomberg BusinessWeek multiple times over the last couple months, this is untrue,” said Steve Schmidt, Chief Information Security Officer at Amazon. “At no time, past or present, have we ever found any issues relating to modified hardware or malicious chips in SuperMicro motherboards in any Elemental or Amazon systems. Nor have we engaged in an investigation with the government.”

“Supermicro has never found any malicious chips, nor been informed by any customer that such chips have been found,” Supermicro said in a statement. “The manufacture of motherboards in China is not unique to Supermicro and is a standard industry practice. Nearly all systems providers use the same contract manufacturers.”

“Over the course of the past year, Bloomberg has contacted us multiple times with claims, sometimes vague and sometimes elaborate, of an alleged security incident at Apple,” an Apple statement reads. “Each time, we have conducted rigorous internal investigations based on their inquiries and each time we have found absolutely no evidence to support any of them. We have repeatedly and consistently offered factual responses, on the record, refuting virtually every aspect of Bloomberg’s story relating to Apple.”

While the entire saga is now a bit hazy, one thing is clear, someone is lying and misleading the general public.

Would China compromise ‘Workshop of the World’ position?

It is not difficult to believe the Chinese government would conduct such campaigns. It is generally accepted the Chinese government monitors the activities and communications of its own citizens, therefore it is not a huge stretch of the imagination to believe it would do so for foreign countries. But, would the Chinese government put its valuable position as the ‘Workshop of the World’?

With roughly 75% of smartphones and 90% of PCs manufactured in the country, any accusations of espionage would certainly force companies to reassess their supply chain. What company would buy hardware if they knew the potential for data breaches? It would be commercial suicide. China surely knows this, but it depends on what it places more importance on; securing intelligence from foreign governments and multinational corporations, or maintaining stability for a very lucrative industry for the country.

This is not to say they wouldn’t, but it would have to accept it would be sacrificing an important and profitable role in the global supply chain, one which it has worked hard to dominate.

Amazon, Supermicro and Apple clearly have a lot to lose

Another denial here is nothing which should come as a surprise. Should there have been a confirmation, the trio would haemorrhage customers.

Amazon AWS’ government business is a big earner, but how many would trust the services if there was a threat of espionage. The same could be said of corporate clients who are incredibly protective of trade secrets. Supermicro manufactures motherboards for more than 900 customers around the world, clearly this would be incredibly damaging to its reputation. For Apple, and Amazon as well, the PR damage for the consumer business could be a disaster. Consumers would be very wary, which combined with the high-prices Apple tends to charge, could possibly turn the public to other brands.

Each company has a lot to lose by admitting it has been compromised. There was of course going to be a denial, especially considering this investigation has not been confirmed by the government. If it does turn out to be true, the trio can simply state they were under non-disclosure agreements and a denial was necessary for national security, even if it was a lie.

A convenient revelation for the US government

Just as President Trump is going on the offensive against the Chinese government with tariffs and company bans, the story emerges. To say it is convenient timing is somewhat of an understatement.

Just last month, Trump upped the ante on the Chinese trade war by introducing tariffs on another $200 billion of imports. This adds to the initial $50 billion which was announced earlier in the year. With the price of imports increasing, and the option of domestic manufacture more expensive, the price of certain consumer goods will soon begin to rise. Trump will soon need to justify to US citizens why it is important to swallow these price increases, and an espionage scandal would certainly fit the bill.

Another interesting aspect is on the 5G side of things. With Huawei banned from any meaningful deployment or contracts, the risk is reduced competition which could potential lead to increased prices and slower deployment. Ghost stories about the naughty Chinese will only get the government so far, Trump will soon need a concrete reason for banning Huawei and ZTE from the fray. The malicious microchips provide justification here as well.

Not everyone can be right

Right now the validity of the claims is hazy. There are of course strong arguments for all, some suggesting they are telling the truth and some as evidence of lies, but right now, who knows.

With the intelligence community and the White House remaining quiet, rumours will continue to swirl. Until this confirmation or denial for the investigation is unveiled, the conspiracy theorists will be typing away. Of course, a confirmation or denial will not stop the conspiracy theorists, but it will at least provide some clarity for the rest of us.

Data Transfer Project could cut AWS cloud dominance – Equinix

Amazon’s cloud business, AWS, might be romping ahead of the pretenders in the market share rankings, but the progressing Data Transfer Project could see this lead eroded and the rise of more niche players.

In most sub-sectors of industry, the first to market usually commands a significant market share once the segment has been normalised. The vendor has an established business model, brand and customer base, however this dominance is usually eroded through competition over time. AWS’ position is standing the test of time, though Sachin Sony of Equinix believes the Data Transfer Project could lead to the end of this strangle hold.

“Interoperability between cloud environment will not only be beneficial to customers, but will open up opportunities for more niche providers to establish market share,” said Sony.

“Customers are now dictating the terms, changing the status quo. This is largely driven by the exponential growth in data, especially with IoT and big data, with customers now becoming the dictators on what cloud environment should look like.”

The Data Transfer Project is a collaboration between various organizations to build a common framework with open-source code that can connect any two online service providers, enabling a seamless, direct, user initiated portability of data between the two platforms. In short, it creates interoperability between the provider’s cloud environments to simplify the migration of data between one service and another.

Right now, migration is difficult, which has led to the dominance of the major cloud players. Companies like AWS secure a contract with an organization, but as migration is so difficult, customers are compelled to scale up with the same service. Customer retention becomes simpler, as the options to move are time consuming and expensive, meaning the larger organizations can spend more time securing more customers, who will grow, repeating the cycle.

While it does not sound like the end of the world, because of the difficulties in migrating data, niche service providers struggle to establish themselves. Sony suggested improving interoperability will allow for more resilient multi-cloud environments, where the hyperscale players can be used for more generic activities, and the niche players for more tailored and mission critical business processes. It might also encourage more organizations to transition more data to the cloud.

“When enterprises started moving to the cloud it was a great way to cut costs,” said Sony. “But companies did not think this through.

“When you go to a cloud based environment, you are making yourself captive of that vendor. It’s a very risky business model as it creates a single point of failure. When there have been outages, or the business expanded into new areas where that provider isn’t, complications arise. These organizations need diversification in their cloud environments. They need interoperability.”

Of course, whenever the customer starts dictating terms the big vendors tend to resist, and AWS is not an active contributor to the project at the moment. Why would it want to contribute to something which would destroy its dominant position in the industry? However, Sony thinks it is only a matter of time.

Interoperability is an attractive prospect for the customer as it offers security, resiliency and agility. Cutting costs is not the sole objective of the cloud-orientated business model anymore, therefore customers will look elsewhere at the expense of a couple of dollars should a provider not offer interoperability. It’s only a matter of time before AWS is forced into line.

This is not to say this project will cost AWS money. In theory, it should encourage more organizations to migrate data and more mission critical processes to the cloud, resulting in more business. But, this will be more business for everyone. Interoperability takes cloud from a specialist service to more of a commodity. The specialism will be creating unique and tailored environments, a service which will be offered by the smaller emerging players.

This project and the trend of interoperability will not cost AWS money, but it might cost it market share.

AWS continues to fuel profits at parent company

Amazon has released the results for the first half of 2018, with cloud business unit AWS accounting for just over 61% of the total operating income.

Sales across the group stood at $103.9 billion, while AWS accounted for $11.5 billion, with an impressive $6.1 billion coming in the second quarter, beating market expectations. Net income was reported at $4.1 billion for the half, and $2.5 billion for the quarter. This is now the third consecutive quarter the business has reported more than $1+ billion in net income, perhaps a welcome surprise for investors who have become accustomed to minimal profits and losses every three months.

“We’re very happy with the results we’re seeing, and the backlog that we see, and the new contracts and new customers and the expansion of existing customer business that we see,” said Amazon CFO Brian Olsavsky. “Again, the business has accelerated the last three quarters, and we’re seeing great signs in a number of areas.”

While the success of AWS is unparalleled in the industry, there is still room for growth. Despite the cloud being old news, there are still a huge number of customers and workloads to migrate to the cloud, and new services to offer to these customers. AWS has already launched 800 new services and features so far this year, including the Database Migration Service which has been utilised 80,000 times over the six months, and there is scope for more. The cloud might seem like an old idea now, but with areas such as machine learning, AI, IoT, serverless computing and databases and analytics beginning to breach normality, the potential to make more cash is abundant.

As you can see from the market share graphic below, AWS is in a league of its own when it comes to the cloud services market. Google and Microsoft might be growing their own business at a faster rate, but these steps forward cannot bridge the sheer volume and breadth of customers in the AWS market share. Unfortunately for challengers outside the top four, it is looking increasingly unlikely the gulf will be bridged.

“Amazon Web Services and its three main challengers all turned in some exceptional growth numbers in the quarter,” said John Dinsdale of Synergy Research Group.

“Collectively those four firms alone accounted for well over three quarters of the sequential growth in cloud service revenues. In a large and strategically vital market that is growing at exceptional rates, they are throwing the gauntlet down to their smaller competitors by continuing to invest enormous amounts in their data centre infrastructure and operations. Their increased market share is clear evidence that their strategies are working.”

Looking at where money is being spent in the industry, public IaaS and PaaS services account for the bulk of the market, with these two segments growing by 53% over the last quarter. Total spend, IaaS, PaaS and hosted private cloud services, exceeding $16 billion for the quarter.

Alexa privacy brought into question as Echo suffers meltdown

Amazon has continually denied its Echo devices are constantly listening and recording conversations in the home, but after one family had an entire conversation sent as an audio file to a friend, questions are being asked.

According to Kiro7 News, the unnamed family were discussing hardwood floors while the device was recording the entire conversation. Fortunately for the family the conversation was not of a sensitive native and it was also sent to a colleague of the husband, not a complete stranger.

“I felt invaded,” the customer, only known as Danielle, said. “A total privacy invasion. Immediately I said, ‘I’m never plugging that device in again, because I can’t trust it.'”

The family from Portland in the US had fully embraced the idea of the smart home. Echo devices had been connected throughout the home and to numerous smart appliances, though now the house is back to basics with all devices unplugged. Amazon has investigated the intrusion, but has not been able to pinpoint a cause of the ‘malfunction’ or explicitly confirm there are no similar examples.

Amazon has so far refused to refund Danielle for the ‘malfunction’ and invasion, but has instead offered to de-provision the devices so the family can continue to use the smart home features. This compromise will come as little comfort to the family, as Amazon has broken the bond of trust which is needed for companies to operate in this delicate era of data privacy and protection.

While this is of course a concerning development for any Echo owner, when you tie its work with US government surveillance activities it becomes even more so. Amazon’s reputation for being one of the worlds’ most customer centric organizations is starting to come under a bit of pressure, with its work with the various police departments as a good example.

Back in January, the American Civil Liberties Union (ACLU) Northern California chapter revealed the several police departments deployed AWS’ Rekognition software to search for people in footage drawn from the city’s video surveillance cameras. Empowering police forces and intelligence agencies is one thing, but a line has to be drawn somewhere when it comes to privacy. We wonder whether aiding the Big Brother ambitions of the government is on the right side of that line.

The tech giants have generally been pretty good when it comes to protecting user privacy, just look at Microsoft’s battle with the US government over data stored in European data centres, but there have been some worrying examples in recent months. With Facebook hitting the headlines for the Cambridge Analytica scandal, Google employees revolting over the decision to aid the operation of missile strikes and AWS assisting with such acts of unjustified privacy invasion, you have to wonder whether these tech giants have lost track of their principles.

We’re not suggesting the recorded conversation and Amazon’s work with various police departments are connected, but these are two examples of the promise to the consumer becoming a bit more jaded and battered. The digital economy is built on consumers personal information and a bond of trust with the technology companies. The agreement of trust is that these organizations will act responsible and ethically, but there are more examples appearing which prove to be quite the opposite.