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.

Telefónica gets intimate with Amazon Web Services

Telefónica Business Solutions has got into a strategic collaboration with Amazon Web Services in order to offer more cloudy stuff to its customers.

This seems to be a fair bit more than just a reseller agreement, with TBS creating an in-house team of AWS specialists as well as a ‘Cloud Center of Excellence’ in Spain that will relentlessly obsess about all things AWS. It’s all about holding companies’ hands during their cloud and digital transformation journey.

“Our customers are asking for advice and support in their cloud adoption processes,” said Hugo de los Santos, Director Global B2B Products and Services at Telefónica. “AWS, with its depth and breadth of services as well as global presence, is a piece that fits perfectly in our cloud portfolio. Telefónica’s cloud offering thus empowers our customers to run their infrastructure, applications and workloads on the most suitable cloud service possible.”

“Service providers are playing an important role in driving innovation and creating value for organizations,” said Niko Mykkanen, Head of EMEA Partners & Alliances at AWS. “We are excited to work with Telefónica to enable the digital transformation of enterprise customers and help them leverage the scalability and breadth of services that AWS offers.”

TBS said a bunch of other stuff that amounted to a compilation of associated buzzwords and clichés. Terms like ‘agility’, ‘digital services’ and ‘leveraging’ saw vigorous action, surely leaving TBS customers in no doubt that their digital aspirations are in safe hands.

Cloud fuels Amazon, Microsoft and Intel, but best is yet to come

The quarterly results from Amazon, Microsoft and Intel show profits are certainly in the cloud, but with 5G just around the corner this might only be the start of a cloud renaissance.

Amazon’s AWS business unit grew 49% year-on-year, Microsoft’s Azure revenues shot up 93%, while Intel’s data centre group saw 24% jump compared to the same period 12 months ago. These are all very promising numbers, but when you considered the promises of 5G and the prospect of a more influential distributed cloud, it might be chump change.

5G promises increased and faster connectivity, as well as more cost efficient delivery, however a conversation which doesn’t seem to get much attention at the moment is the cloud. The more content users are downloading or accessing on the move, the greater the need for a more efficient and influential distributed cloud model. It might not be the most riveting aspect of the telecommunications world, but anyone associated with the cloud segment will clean up, if they aren’t making enough already.

That said, focusing on the here and now, Amazon is maintaining its position as one of the most influential companies on the planet. Net sales increased 43% to $51 billion in the first quarter, with operating income at $1.927 billion. Looking specifically at the cloud business, net sales stood at $5.442 billion, an increase of 49% year-on-year. This figure now accounts for roughly 11% of total revenues at Amazon, while operating income stood at $1.4 billion. Amazingly, 73% of all operating income at the technology mammoth came from AWS.

“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Jeff Bezos, Amazon CEO. “As a result, the AWS services are by far the most evolved and most functionality-rich.”

AWS might have had a running start at the industry, but it is not alone in fighting for profits in the cloud. Sitting in the number two spot is Microsoft, with its Azure platform making some very promising headway in the space.

Total revenues across the Microsoft business was $26.8 billion, a 16% year-on-year increase, with the Intelligent Cloud unit contributing $7.9 billion, up 17%. In the cloud business, Azure revenue growth was 93%. AWS is still the leader in the cloud world, but Microsoft must be chipping away at that leader with consistent quarterly growth in the 90s.

“Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud,” said Satya Nadella, CEO of Microsoft. “We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers.”

Over the course of the quarter, Microsoft invested around $3.5 billion in capital expenditure, a notable chunk of which would certainly have been on enhancing the cloud business. While the cloud can be a very profitable game, it isn’t cheap to set up. Google have also confirmed this after spending $7.67 billion, both companies demonstrating substantial increases from the year before, with companies like Intel claiming the rewards.

The cloud is incredibly influential now, and will only become more so. Intel’s dominant position when it comes to chips in the data centre makes it looks like a good bet for any market speculators. Total revenues across the company were up 13% year-on-year to $16.1 billion, while the Data Centre Group brought in $5.2 billion, a 24% boost. Share price was up 7% since the announcement, with the future looking very rosy.

These are all companies making quiet waves in the technology world, but with 5G, bigger and better things could be on the horizon. Our insatiable appetite for data and connectivity will continue to fuel momentum for the cloud players. They might not be the sexiest aspect of the telecommunications segment, but certainly the ones with some of the most interesting prospects moving forward.

Amazon launches a bunch of machine learning goodies for developers

At the AWS Re:Invent event Amazon Web Services served up a large number of initiatives designed to make machine learning more accessible to developers and data scientists.

Even these are just a small part of an orgy of announcements from the enterprise cloud market leader, with nine press releases sent out yesterday alone. The plucky hacks at Enterprise Cloud News are living the AWS dream over in Vegas and even managing to extract themselves from the casinos and night clubs to cover the event, so we’ll leave the in-depth stuff to them.

Here are the six bits of machine learning cleverness revealed in the culminating release

  • Amazon SageMaker is a managed service to help developers and data scientists to build, train, deploy, and manage their own machine learning models
  • AWS DeepLens is a deep learning-enabled wireless video camera that can run real-time computer vision models
  • Amazon Transcribe is an AI-infused speech-to-text tool that can deal with low quality audio
  • Amazon Translate does what it says on the tin using state of the art neural machine translation techniques, apparently
  • Amazon Comprehend is an intriguing tool that is designed to understand natural language, including nuance, context, etc, and analyse it
  • Amazon Rekognition Video provides real-time facial recognition, as well as other objects, from video, which can then be ordered and analysed.

“Our original vision for AWS was to enable any individual in his or her dorm room or garage to have access to the same technology, tools, scale, and cost structure as the largest companies in the world. Our vision for machine learning is no different,” said Swami Sivasubramanian, VP of Machine Learning, AWS.

“We want all developers to be able to use machine learning much more expansively and successfully, irrespective of their machine learning skill level. Amazon SageMaker removes a lot of the muck and complexity involved in machine learning to allow developers to easily get started and become competent in building, training, and deploying models.”

As ever, advances in AI and machine learning bring with them a conflicting mixture of awe and unease. This latest batch of announcements from Amazon seem to be heavy on the surveillance side of things in so much as they will make it easier for other people to track our activities. Anyone already concerned about data privacy is unlikely to be reassured by this sort of thing.

BT has bright idea to steal Amazon credibility

BT has seemingly got tired of a reputation riddled with accounting scandals and mediocre football coverage. Amazon has a good brand so why not tie up with its cloud computing business?

The new partnership will help BT grow its ‘Cloud of Clouds’ portfolio strategy, focusing on networking, security and managed cloud services. BT will hope such an association will provide more credibility as they aim to helps customers consume and utilise AWS at scale. The effects of handsome Gavin Hasselhoff Patterson seem to be waring off, and the Ryan Reynolds adverts were frankly a bit irritating, so why not go for something a bit more traditionally associated with the telecoms space. And who doesn’t love a partnership.

“The new strategic collaboration with AWS represents a major evolution in BT’s Cloud of Clouds,” said Bas Burger, CEO of Global Services at BT. “Together, BT and AWS are uniquely placed to help customers around the world remove complexity from their digital transformation journey. Today’s announcement is just the beginning, with much more to come.”

“Cloud is the new normal and organisations around the world are moving their applications to AWS so that they can focus on delivering the best for their customers,” said Gavin Jackson, UK Managing Director at AWS. “BT’s investment and expertise in the cloud will further help enterprise customers fully leverage the scale, security and agility of AWS.”

One of the initiatives which will be launched through the partnership will be known as the ‘hybrid cloud landing zone’, which essentially is a hybrid-for-dummies guide, while another will be a new portfolio of services focused more specifically for the security conscious. These products will include embedded network security, anti-DDoS and threat intelligence, all of which will be available through the AWS marketplace.

We applaud BT’s more traditional approach, now if only it could have a chat with its mates over at EE to see if they can be convinced to ditch Kevin Bacon. Whoever thought that was going to be a good idea should be told to sat in the corner.

Nokia gets into bed with Amazon

Nokia has announced a ‘strategic collaboration’ with Amazon Web Services, with the stated aim of helping telcos move to the cloud.

These seems to be quite a wide ranging partnership in which Nokia will help service providers migrate to AWS and AWS enterprise customers will be offered Nuage SD-WAN services. Additionally the two companies will collaborate on 5G and IoT use cases for service providers and other enterprise customers.

Here’s how they put it:

  • Nokia will support service providers in their AWS implementation strategy with a complete suite of services including consulting, design, integration, migration and operation for infrastructure and applications.
  • Nokia and AWS will work together to generate new 5G and Edge Cloud strategies and guidance for customers including reference architectures that enable both service providers and enterprises to benefit.
  • Nokia and AWS are working to bring an improved user experience for Nuage Networks SD-WAN customers who use AWS. Enterprises can benefit from this seamless integration with AWS and launch secure branch connectivity in hybrid environments with “Single Pane of Glass” capabilities.
  • Finally, the companies are commercializing IoT use cases with AWS Greengrass, Amazon Machine Learning, Nokia Multi-access Edge Computing (MEC) and Nokia IMPACT platform.

“Our collaboration with AWS will accelerate the migration of service provider applications to the cloud and enable us to forge new opportunities together by delivering on next-generation connectivity and cloud services,” said Kathrin Buvac, Nokia’s Chief Strategy Officer. “This is a wide-ranging collaboration, spanning our services capabilities in application migration, SD-WAN from Nuage Networks, 5G, and IoT, allowing new growth opportunities for our top customers across both the service provider and large enterprise market segments.”

“Service providers are accelerating their migration to AWS in order to drive innovation for their customers and deliver lower total cost of IT to their organizations,” said Terry Wise, Global VP of Channels and Alliances at AWS. “We are excited to partner with Nokia to accelerate cloud transformation for service providers, and enable the digital transformation journey for our mutual large enterprise customers.”

Nokia seems to be busy, bordering on hyperactive, these days. But amid the spam of recent weeks this announcement has the potential to be especially significant. Everyone knows the cloud will be vital to pretty much all the next telecoms megatrends, so becoming friends with benefits with the biggest cloud provider would seem to be a good career move for Nokia.