Azure is on a spending spree

Cloud has led the Microsoft recovery in recent years, and the Azure team is doubling down on that momentum with a third acquisition in as many months.

The financial details of the deal have not been revealed, though Movere will join the Microsoft Azure family, adding migration smarts to an already comprehensive armoury.

“As cloud growth continues to unlock opportunities for our customers, cloud migration is increasingly important for business’s digital strategy,” said Jeremy Winter Partner Director for Microsoft Azure. “Today, I am pleased to announce that Microsoft has acquired Movere, an innovative technology provider in the cloud migration space.”

Founded in 2008 as Unified Logic, the focus of the business was altered in 2014 after the management team experienced difficulties in migrating their business onto the Azure platform. The start-up has been a partner of Microsoft for more than a decade, though in the last five years, it has been more acutely focusing on migration challenges for customers.

For Microsoft, this is just another tool it can talk to potential customers about, adding to two acquisitions over the last couple of weeks.

In July, the Azure team announced the acquisition of BlueTalon, a firm which aims to simplify data privacy and governance across modern data estates. Just after in August, jClarity was added to the mix. jClarity, a leading contributor to the AdoptOpenJDK project, will help teams at Microsoft to leverage advancements in the Java platform.

Alongside Amazon AWS, Microsoft Azure is leading the pack in the cloud world and it does not want to give any opportunity for the ‘also rans’ to close the gap. These acquisitions are simply increasing the breadth, depth and variety of the Azure proposition.

And the importance of the cloud to Microsoft should never be under-estimated.

After joining the Microsoft in 2014, CEO Satya Nadella shifted the focus of the business towards the cloud. Azure was the new poster boy of the firm, which was looking like a shadow of the dominant player which dominated the 90s and 00s.

Since that point, total revenues have grown to $110.36 billion in 2018, from $86.833 billion in 2014. Operating income increased to $35.058 billion in 2018, up from $27.759 billion in 2018. And looking at market capitalisation, Microsoft is now valued at $1.05 trillion, the largest in the technology world.

The cloud is driving Microsoft forward, and it is not afraid to spend some cash to capitalise on the momentum.

Microsoft and BMW pair up for IoT Open Manufacturing Platform

Microsoft has partnered up with the BMW Group to launch a new initiative aimed at stimulating growth for IoT in the smart factory segment.

The Open Manufacturing Platform (OMP) will be built on the Microsoft Azure cloud platform, aiming to have four to six partners by the end of the year, to help grow an ecosystem and build future Industry 4.0 solutions. The smart factory segment is promising much with the emergence of 5G, but with every new concept there is scepticism; someone always needs to drag it towards the finish line.

“Microsoft is joining forces with the BMW Group to transform digital production efficiency across the industry,” said Scott Guthrie, EVP of the Microsoft Cloud and AI Group. “Our commitment to building an open community will create new opportunities for collaboration across the entire manufacturing value chain.”

“We have been relying on the cloud since 2016 and are consistently developing new approaches,” said Oliver Zipse, a board member at BMW. “With the Open Manufacturing Platform as the next step, we want to make our solutions available to other companies and jointly leverage potential in order to secure our strong position in the market in the long term.”

BMW is already a significant customer of Microsoft Azure, with over 3,000 machines, robots and autonomous transport systems connected with through the BMW Group IoT platform, which is built on Microsoft Azure cloud.

Openness is one of the key messages here as the pair bemoan data silos and slow productivity created by complex, proprietary systems. The OMP aims to break down these barriers through the creation of an open technology framework and cross-industry community.

For both, the objective of this group is relatively simple. At BMW, the team wants to improve operational efficiencies and reduce costs, partly by taking back control of the supply chain, while Microsoft just wants more people, processes and data on Azure. The more accessible the smart factory is, more companies will become cloud-first, and the more successful the OMP becomes, the more customers Azure gains.

The OMP will provide community members with a reference architecture with open source components based on open industrial standards and an open data model. Through openness, the pair claim data models will be standardised to enable more data analytics and machine learning scenarios and usecases. For Microsoft and the manufacturers, its great news, for the suppliers not so much.

Openness sounds like a great idea, but with any fundamental change comes consequence. There will be numerous companies who benefit considerably from proprietary technologies and processes, especially in traditional industries like manufacturing, though those who resist change will be the losers in the long-run. The world is evolving to a new dynamic, where openness rules the roost, resistance only means future redundancy.

Microsoft Azure casts its eye towards Quantum computing

Microsoft has announced the formation of its Quantum Network in an effort to develop the world’s first scalable quantum computer and quantum applications.

The Network, which was announced during Microsoft’s Startup Summit, is a community which brings together various universities, suppliers, enterprise organisations and start-ups to grow this futuristic segment. It might seem like an unconceivable concept right now, but CEO Satya Nadella has seemingly developed a culture which will not allow Microsoft to sit still, a problem which brought about the dark days of the noughties.

“The Microsoft Quantum Network is our commitment to establishing the partnerships required to build the quantum workforce and the quantum economy,” said Todd Holmdahl, Corporate VP of Azure Hardware Systems Group at Microsoft (pictured). “We believe both are vital to solving some of the world’s toughest problems.”

Of course, Microsoft is not the only competitor in the race to create scalable quantum computing services and products. IBM Q was one of the first industry initiatives to focus on the segment, while Google has created its own division known as AI Quantum. AWS has hinted it will be getting involved before too long, praising the National Quantum Initiative Act in a blog post, though nothing official has emerged just yet. And it’s not just the tech superpowers, Bleximo and ColdQuanta are two companies which received seed funding in 2018.

A classical computer has a memory made up of bits, where each bit is represented by either a one or a zero, however quantum computing maintains a sequence of qubits, which can represent a one, a zero, or any quantum superposition of those two qubit states. The simplest way of explaining this is by imagining a sphere.

In classical computing, a bit can be represented by the poles of the sphere, with zero representing the south pole and one representing the north, but in Quantum computing, any point of the sphere can be used to represent any point. This is achieved through a concept called superposition, which means ‘Qbits’ can be represented by a one or a zero, or both at the same time. For example, two qubits in a single superposition could represent four different scenarios.

Although this is an incredibly simplistic description of the science, it will allow computers to store, analyse and transfer information significantly more efficiently. Each year, the volume of data we consume is growing astronomically, driving the need for such computational power.

While this does sound incredibly beneficial for the world, what is worth noting is this is a segment in its very early days. Progress has been made in creating these supercomputers, though it is far from being perfected, and scalability is nothing more than a distant dream right now. The main problem, aside from incredibly difficult science, seems to be maintaining stability of the machines. Incredibly cold temperatures are needed, while even slight vibrations can cause disruptions.

Eventually, quantum computers will be able to solve complex mathematics problems at speeds which are inconceivable in today’s world. This will become increasingly important in areas such as security, with end-to-end encryption technologies reliant on the concept of it being impossible to solve equations in an efficient enough manner. Should nefarious individuals get their hands on the technology, the currently unbreakable codes would be vulnerable.

Just to demonstrate the power of quantum computing, back in 2015, Google announced it had developed a supercomputer which was more than more than 108 times faster than what was considered classical computing at the time. Computational power has increased in the four years since, but the sheer chasm between classical and quantum is clear.

It might sound like a risk, but on the other hand, cryptography could benefit from this technology significantly. Quantum-based cryptographic systems would be much more secure than what we would consider the norm.

This euphoria will not replace classical computing, as there will always be simplistic usecases such as spreadsheets or email for example, but there are hordes of more complex scenarios which could benefit from quantum computing. The sciences could hugely benefit, as well as more everyday usecases such as scheduling flight runway activities at airports.

Of course, for any of the futuristic ideas to be considered there needs to be scalability. This is one of the main objectives of this Microsoft, bringing quantum computing to the masses quicker than competitors. The technology might sound decades off, but as Bill Gates said; “most overestimate what they can do in one year and underestimate what they can do in ten”.

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.

Microsoft strives for an intelligent edge in IoT

Microsoft has announced it will invest $5 billion in the Internet of Things over the next four years focused on security, creating development tools and intelligent services for IoT and the edge.

With IoT set to offer profits for certain segments of the ecosystem, Microsoft is in a solid position, and who would have thought we would have been saying that a few years ago. Since Satya Nadella took over as CEO the company successfully transformed into a powerhouse of the cloud world, which offers a superb foundation to reap the benefits of the IoT euphoria.

“Today, we’re planning to dedicate even more resources to research and innovation in IoT and what is ultimately evolving to be the new intelligent edge,” said Julia White, CVP at Microsoft Azure.

“With our IoT platform spanning cloud, OS and devices, we are uniquely positioned to simplify the IoT journey so any customer – regardless of size, technical expertise, budget, industry or other factors – can create trusted, connected solutions that improve business and customer experiences, as well as the daily lives of people all over the world. The investment we’re announcing today will ensure we continue to meet all our customers’ needs both now and in the future.”

While IoT has been a buzzword for years, we are just about seeing the adoption and realisation of the business models which might live up to the promise. We are never short of forecasts or predictions about how successful this segment will be, but here is another one. AT Kearney predicts IoT will lead to a $1.9 trillion productivity increase and $177 billion in reduced costs by 2020. With these numbers you can see why companies around the world, especially the ones where product margins are being squeezed, are excited about this evolution.

The focus for Microsoft here is about improving intelligence on the edge, another buzzword which faded from popularity in recent times but is surging again now. Maybe discussions about the edge were just too early; 5G and IoT are perhaps the catalysts to make the edge a relevant discussion once again. 2018 might be another year of false dawns when it comes to the investment boom, but there can’t be many of them left; companies will start spending soon.

The more activity which can be managed on the edge of the network, the more attractive and feasible IoT becomes. Microsoft has proven very effective at pumping a craze before it peaks to reap the benefits of being first-to-market, but this only really since Nadella has taken over. Microsoft Azure is sitting very comfortably in the number two position in the IaaS space, and it would be far to assume IoT will consolidate the reformed technology-beast as a global super-power.