IBM turned in its third-quarter results, beating expectation on strong hybrid cloud results.
IBM has been focusing its attention on cloud computing, even planning to split in two in order to divest itself of its legacy business and focus its efforts on the cloud. The strategy is paying off, with the company reporting a strong third quarter.
“IBM delivered strong revenue growth in the quarter, reflecting our continued focus on the execution of our strategy. Globally, clients view technology as an opportunity to enhance their business, which is evident in the results across our portfolio,” said Arvind Krishna, IBM chairman and chief executive officer. “With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model.”
Revenue came in at $14.1 billion, up 6% over last year and beating expectations of $13.5 billion. Software revenue increased 7%, consulting revenue 5%, and infrastructure revenue was up 15%.
Hybrid cloud revenue was up 15%, coming in at $22.2 billion over the last 12 months.
“Both our revenue growth and operating profit profile for the first three quarters of the year align to the investment thesis we outlined last fall,” said James Kavanaugh, IBM senior vice president and chief financial officer. “Our portfolio mix, business fundamentals, strong recurring revenue stream and solid cash generation allow us to invest for continued growth and return value to shareholders through dividends.”
The global cloud market is set to expand at a rapid pace, reaching $750 billion by 2027, thanks in large part to the growth of hybrid cloud options.
New research from SkyQuest Technology shows the cloud market is set to grow at an annual compound growth rate (CAGR) of 30.10% during the forecast period of 2020 to 2027. By 2027, the total market will be worth some $750 billion.
Cloud computing’s growth is being driven by a wide array of factors. The pandemic-fueled move toward remote and hybrid work has been a significant driving force, as has the cloud’s ability to help companies be more nimble and competitive.
Hybrid cloud, in particular, provides these benefits, giving organizations the ability to quickly adapt to changing demand. As a result, not only did hybrid cloud account for 25% of the market in 2021, but it will continue to be a growth driver.
In 2021, hybrid cloud segment held a significant share of more than 25% share in the global market. The segmental growth of the market is attributed to the certain advantages offered by hybrid cloud when compared with other deployment type. Using a hybrid cloud allows businesses to scale computer resources while also reducing the need to invest large sums of money to handle short-term spikes in demand, as well as freeing up local resources for more sensitive data or applications. Hence, this contributes to the segmental market growth.
Some of the biggest tech companies have already bet big on hybrid cloud options. IBM is one such company, announcing in late-2020 that it would split into two companies, with the core business focused on hybrid cloud computing.
IBM has released its latest quarterly results, lending support to the company’s efforts to pivot to a hybrid cloud provider.
IBM announced in 2020 it planned to split into two companies, spinning off its legacy hardware business, with the core company focusing on hybrid cloud solutions. The company has since been on a spending spree, buying up smaller companies to help round out its offerings.
The company’s strategy appears to be paying off, if its latest quarterly results are any indication.
“Demand for hybrid cloud and AI drove growth in both Software and Consulting in the first quarter. Today we’re a more focused business and our results reflect the execution of our strategy,” said Arvind Krishna, IBM chairman and chief executive officer. “We are off to a solid start for the year, and we now see revenue growth for 2022 at the high end of our model.”
The company reported revenue of $14.2 billion, up 8%. Software revenue was up 12% and consulting revenue was up 13%, while infrastructure revenue was down 2%. Hybrid cloud revenue, however, was up 14%, coming in at $5 billion.
“In the first quarter we continued to strengthen the fundamentals of our business, consistent with our medium-term model,” said James Kavanaugh, IBM senior vice president and chief financial officer. “We are a faster growing, more profitable company with a higher-value business mix, a significant recurring revenue base and strong cash generation.”
IBM and SAP have announced a deepening of their existing partnership, with the goal of helping more companies move their SAP workflows to the cloud.
SAP is one of the leading enterprise and CRM software makers and, like most companies, is working to help its customers move to the cloud. IBM, while not one of the top three companies, is nonetheless a leading cloud provider. The company even announced its intention to split into two companies, with the main one focused on hybrid cloud solutions.
IBM has now become a premium SAP supplier with IBM for RISE with SAP. The company is also offering its BREAKTHROUGH with IBM for RISE with SAP, “a portfolio of solutions and consulting services that help accelerate and amplify the journey to SAP S/4HANA® Cloud.”
The expanded partnership makes IBM the only SAP partner to provide a complete solution, including cloud infrastructure, managed services, and business transformation solutions.
“We are thrilled to advance our long-standing partnership through RISE with SAP,” said John Granger, Senior Vice President, IBM Consulting. “Our shared commitment is to meet our clients, especially those in highly regulated industries, where they are in their digital journey, while giving them choices for migrating or modernizing their mission critical workloads with a hybrid cloud approach.”
“BREAKTHROUGH with IBM is an outstanding complement to RISE with SAP as it lays the foundation for our customers to embark on or advance their business transformation journeys. Further, it reaffirms the value customers recognize from RISE with SAP and the impact and innovation opportunity RISE with SAP offers to organizations that move to the cloud. I have every confidence that the combined expertise and experience SAP and IBM offer will accelerate cloud adoption and business growth for customers across the globe,” said Brian Duffy, President of Cloud, SAP.
IBM has beat Wall Street expectations, returning to revenue growth after four quarters of declines.
IBM has been in the process of reinventing itself as a hybrid cloud provider. The company plans to spin off its legacy operations, focusing primarily on its hybrid cloud business, and has been snapping up startups to help drives its transformation.
The company’s strategy appears to be paying off as it reported revenue of $17.7 billion, up 1%. The company’s Cloud & Cognitive Software was up 4%. Cloud revenue accounted for $6.5 billion, up 21%. Over the past 12 months, cloud revenue accounted for $26.3 billion, an increase of 19%.
“Strong performance this quarter in cloud, driven by increasing client adoption of our hybrid cloud platform, and growth in software and consulting enabled us to get off to a solid start for the year,” said Arvind Krishna, IBM chairman and chief executive officer. “While we have more work to do, we are confident we can achieve full-year revenue growth and meet our adjusted free cash flow target in 2021.”
“In the first quarter we continued to improve the fundamentals of our business model,” said James Kavanaugh, IBM senior vice president and chief financial officer. “With strong cash generation and disciplined financial management, we increased investments in our hybrid cloud and AI capabilities, while significantly deleveraging in the quarter and supporting our commitment to a secure and growing dividend.”
IBM has released new services, aimed at helping organizations manage and secure their hybrid cloud.
Hybrid cloud solutions have become the option of choice for many companies, combining the benefits of the cloud with on-premise infrastructure. Combining the two and properly securing them, however, can present challenges.
IBM has released an enhanced version of its IBM Security Services for Cloud in an effort to help companies tackle the challenge. The new services are designed to help companies maintain a consistent security policy across their hybrid environment. The services use artificial intelligence (AI) to help identify and prioritize potential risks and help administrators address them.
“Cloud security can appear daunting, with defenders facing an expansive attack surface, shared responsibility models and rapidly evolving cloud platforms and tools,” said Vikram Chhabra, Global Director, Offering Management and Strategy, IBM Security Services. “We cannot assume that legacy approaches for security will work in this new operating model – instead, security should be modernized specifically for the hybrid cloud era, with a strategy based on zero trust principles that bring together context, collaboration and visibility across any cloud environment.”
The enhanced tools are the latest example of IBM’s transition to a hybrid cloud provider. The company is planning on splitting in two, spinning off its traditional business, while the core company focuseson hybrid cloud.
Google has previewed its Network Connectivity Center, a tool to manage on-premise and cloud networks.
One of the biggest challenges administrators face is integrating cloud-based networks and workflows with existing on-premise networks. Network Connectivity Center is designed to help address those challenges, and make hybrid cloud solutions easier to manage.
Today, we are announcing the preview of Network Connectivity Center, which delivers planet-scale network management to simplify complex networks for your on-prem and cloud connectivity needs. Network Connectivity Center provides a single management experience to easily create, connect, and manage heterogeneous on-prem and cloud networks leveraging Google’s global infrastructure. Network Connectivity Center serves as a vantage point to seamlessly connect VPNs, partner and dedicated interconnects, as well as third-party routers and Software-Defined WANs, helping you optimize connectivity, reduce operational burden and lower costs—wherever your applications or users may be.
Google has expanded its partnership with Cisco to provide a truly turnkey solution. Together, the solution greatly simplifies “complex heterogeneous networks,” as well as reduces cost and operational burdens, while protecting mission critical applications.
“Google Cloud and Cisco continue driving innovation for our joint customers to enable secure and automated SD-WAN access from applications and services running on Google Cloud Platform,” said JL Valente, vice president, product management, for Cisco Enterprise Routing, SD-WAN and Cloud Networking. “Our latest integration not only extends the Cisco SD-WAN fabric to Google Cloud to automate provisioning of site-to-cloud connectivity effortlessly, but also gives customers the choice of using Google Cloud for providing a highly reliable, high performance global cloud network for site-to-site connectivity that can be deployed in minutes.”
Hybrid cloud options are an increasingly important segment of the industry, with IBM recently going all-in. Even AWS, once focused solely on cloud-first, has adjusted its strategy in recent years and embraced hybrid cloud solutions.
Google’s tool will make it that much easier for its customers to manage their hybrid cloud, and could help the company better compete in an increasingly important field.
IBM has announced that its hybrid cloud service is now generally available to all clients, a major step in the company’s transformation.
IBM announced in October that it would split into two companies. Its legacy business would be spun out as a separate company, while the core business focused on hybrid cloud. Since the announcement, IBM has been on a buyingspree, snapping up smaller companies and startups that can help it achieve its goal.
The company’s hybrid cloud service is now widely available, via its IBM Cloud Satellite service. The service is also integrated with Lumen Technologies’ edge platform to bring IBM’s cloud offerings to edge computing clients.
“With the Lumen platform’s broad reach, we are giving our enterprise customers access to IBM Cloud Satellite to help them drive innovation more rapidly at the edge,” said Paul Savill, SVP Enterprise Product Management and Services at Lumen. “Our enterprise customers can now extend IBM Cloud services across Lumen’s robust global network, enabling them to deploy data-heavy edge applications that demand high security and ultra-low latency. By bringing secure and open hybrid cloud capabilities to the edge, our customers can propel their businesses forward and take advantage of the emerging applications of the 4th Industrial Revolution.”
IBM is working with more than 65 ecosystem partners — including Cisco, Dell and Intel — to ensure customers can run their hybrid cloud workloads in any environment, thanks to IBM Cloud Satellite. Service partners will also offer migration and deployment services to help customers make the transition. IBM Cloud Satellite customers will have access to Red Hat OpenShift-certified software via the Red Hat Marketplace.
“IBM is working with clients to leverage advanced technologies like edge computing and AI, enabling them to digitally transform with hybrid cloud while keeping data security at the forefront,” said Howard Boville, Head of IBM Hybrid Cloud Platform. “With IBM Cloud Satellite, clients can securely gain the benefits of cloud services anywhere, from the core of the data center to the farthest reaches of the network.”
IBM has announced it is acquiring Taos, in an effort to help boost its hybrid cloud consulting capabilities.
IBM made headlines when it announced it was splitting the company in two. The legacy business would be spun off into a independent company, while the core IBM will focus on hybrid cloud. To that end, IBM has been acquiring companies to help it move in that direction and bolster its cloud capacity.
The latest acquisition, Taos, will help IBM improve its hybrid cloud consulting capabilities.
“Taos adds the deep expertise, public cloud partnerships and innovative solutions needed to drive growth and adoption of IBM’s hybrid cloud platform throughout the Americas,” said John Granger, Senior Vice President, Cloud Application Innovation and Chief Operating Officer, IBM Global Business Services. “The platform gives enterprises the freedom to choose from multiple providers to best meet their business and IT needs, and we are committed to helping our clients successfully navigate their open hybrid cloud journeys with those providers.”
It’s likely IBM will continue to pick up smaller companies to help round out its expertise as it embarks on this major shift in strategy.
IBM has announced it is acquiring European cloud startup Nordcloud to help turbocharge its own cloud ambitions.
IBM made headlines in October when it announced it would be splitting into two companies. The spinoff would take over the 109 year-old company’s legacy business, while the core IBM would focus on the hybrid cloud business.
Not surprisingly, IBM is buying cloud startups that will help it achieve that goal, first Instana, and now Nordcloud. In its 10-year history, Nordcloud has established itself as a leader in the European cloud industry, helping companies get the most from their cloud deployments.
“Our clients are increasingly taking a more holistic approach to application modernization that allows them to operate across a traditional IT environment, private cloud and public clouds,” said John Granger, Senior Vice President, Cloud Application Innovation and Chief Operating Officer, IBM Global Business Services. “IBM’s acquisition of Nordcloud adds the kind of deep expertise that will drive our clients’ digital transformations as well as support the further adoption of IBM’s hybrid cloud platform. Nordcloud’s cloud-native tools, methodologies and talent send a strong signal that IBM is committed to deliver our clients’ successful journey to cloud.”
“IBM’s hybrid cloud approach is very complementary with our cloud-native approach to helping clients migrate, manage and modernize in the cloud,” said Fernando Herrera, Chairman and Founder, Nordcloud. “As an experienced partner in today’s cloud ecosystems, we work with all of the public cloud providers for the good of our clients throughout Europe. I am very excited to embrace IBM’s open innovation mindset and help grow its global footprint.”
IBM did not disclose the financial terms, but the deal is expected to close in the first quarter of 2021.
IBM is preparing for a massive round of layoffs in Europe, impacting some 10,000 employees.
According to Bloomberg, IBM announced the layoffs earlier in November in a meeting with labor representatives. The source remained anonymous, as the talks are still private.
“Our staffing decisions are made to provide the best support to our customers in adopting an open hybrid cloud platform and AI capabilities,” an IBM spokeswoman said in an emailed statement to Bloomberg. “We also continue to make significant investments in training and skills development for IBMers to best meet the needs of our customers.”
The bulk of the cuts are in IBM’s legacy business. The company announced in October it is planning on splitting the company in two. The core will continue under the IBM name and focus on hybrid cloud and AI, while the legacy business will be spun off into a separate company.
It appears the UK and Germany will be hardest hit, with Belgium, Italy, Poland and Slovakia also slated to experience some layoffs as well.
IBM has announced it is acquiring applications performance monitoring (APM) company Instana to aid in its hybrid cloud and AI strategy.
IBM made headlines in October when it announced its plans to split itself into two companies. The legacy business will be split into a new company, while the core IBM doubles down on hybrid cloud and AI services.
To assist in those goals, the company is now acquiring Instana, a startup that uses AI to help companies monitor the performance of cloud apps and services. The startup’s platform is a natural fit for IBM’s newfound focus.
“Our clients today are faced with managing a complex technology landscape filled with mission-critical applications and data that are running across a variety of hybrid cloud environments – from public clouds, private clouds and on-premises,” said Rob Thomas, Senior Vice President, Cloud and Data Platform, IBM. “IBM’s acquisition of Instana is yet another important step that we are taking to provide companies with the most complete portfolio of AI-automated solutions to tackle this enormous challenge and help prevent unforeseen IT incidents that can cost a business in lost revenue and reputation.”
At the same time, being part of IBM will help Instana develop its service even more, becoming a dominant player in the DevOps community.
“With the added responsibility of ensuring the build and run quality of the software they develop, DevOps teams need a new generation of application performance monitoring and observability capabilities to succeed,” said Mirko Novakovic, co-founder and CEO, Instana. “Instana’s observability capabilities combined with IBM’s AI-powered automation capabilities across hybrid cloud environments will give clients a full view of their application performance to best optimize operations.”
“It’s a question of understanding what’s hybrid as opposed to pure public,” says IBM CEO Arvind Krishna. “I look at both Microsoft and Amazon as likely partners in this journey, not as being the one and two. In the hybrid world, the question is where does the client want to decide where the workload runs? They can run it on Amazon, they can run it on Microsoft, they can run it on IBM, or they can run it on private. What is the technology platform that goes across all of those? Red Hat gives a great answer to that technology platform.”
“There are many capabilities people need around integration and cybersecurity,” adds Krishna. “We’ll bring those to bear. Then we will bring our services to bear for those clients who would like to get that help both in improving the skills of their own people or for us to do the work for them. That is why you see us report $24 billion dollars in the trailing 12 months on total cloud revenue. That’s a hybrid market and not a singular public cloud market.”
IBM CEO Arvind Krishna On Hybrid Cloud: Microsoft and Amazon Likely Partners
IBM and AT&T have announced they are partnering to help bring 5G and open hybrid cloud services to enterprise customers.
Edge computing has become a critical component for many enterprises, as the amount of IoT devices multiples. As IBM points out, Gartner estimates that “by 2025, 75% of enterprise-grade data will be created and processed by devices at the edge.” Processing the data on the edge saves the time that would normally be required to send it back and forth to a data processing center.
5G is an important part of that process, as well as a way of improving the privacy and security for the enterprise. The creation of private 5G networks will power devices, while at the same time keeping the data from being transmitted over public networks.
As part of the partnership, IBM is building on its previous commitment to retool its software around Red Hat OpenShift. The company has been working with telcos all over the world, citing Verizon, Vodafone, Bharti Airtel and roughly 83% of the world’s largest telcos as its clients.
It’s not just telcos that benefit, however. IBM cites healthcare, manufacturing, retail, banking and finance as some of the principles markets that will benefit from its partnership with AT&T.
“The advancements in 5G and edge are impacting every industry, bringing the promise of enhanced experiences for consumers and new revenue opportunities for businesses,” said Howard Boville, senior vice president, IBM Hybrid Cloud. “Together with AT&T, we will be helping clients securely leverage 5G and edge offerings in any environment with IBM’s open and secure hybrid cloud platform. This marks a significant step forward increasing the possibilities of 5G and edge in the enterprise.”
IBM today announced third-quarter 2020 earnings results. Although overall revenue was slightly down again cloud revenue was up big.
“The strong performance of our cloud business, led by Red Hat, underscores the growing client adoption of our open hybrid cloud platform,” said Arvind Krishna, IBM chief executive officer. “Separating the managed infrastructure services business creates a market-leading standalone company and further sharpens our focus on IBM’s open hybrid cloud platform and AI capabilities. This will accelerate our growth strategy and better position IBM to seize the $1 trillion hybrid-cloud opportunity.”
Highlights for the third quarter include:
GAAP EPS from continuing operations of $1.89
Operating (non-GAAP) EPS of $2.58
Revenue of $17.6 billion, down 2.6 percent (down 3.1 percent adjusting for divested businesses and currency) — Cloud & Cognitive Software revenue up 7 percent (up 6 percent adjusting for currency)
Total cloud revenue of $6.0 billion, up 19 percent — Total cloud revenue of $24.4 billion over the last 12 months, up 22 percent (up 25 percent adjusting for divested businesses and currency)
Red Hat revenue up 17 percent (up 16 percent adjusting for currency), normalized for historical comparability
GAAP gross profit margin of 48 percent, up 180 basis points; Operating (non-GAAP) gross profit margin of 49 percent, up 160 basis points
Net cash from operating activities of $15.8 billion and free cash flow of $10.8 billion, over the last 12 months
“In the third quarter we continued to deliver strong gross profit margin expansion, generated solid free cash flow and maintained a sound capital structure with ample liquidity,” said James Kavanaugh, IBM senior vice president and chief financial officer. “We have the necessary financial flexibility to increase our investments in hybrid cloud and AI technology innovation and skills, while remaining committed to our long-standing dividend policy.”
“The barriers have broken down now in digital transformation because of people working from home and the need to adopt faster,” says Brenda Harvey, General Manager at IBM Asia Pacific. “We see continued growth of hybrid cloud and of cloud services after the pandemic. It’s touching every element of a company’s business processes from the inside out and the outside in.”
The benefits coming from new personalized services, workflow automation, infusing AI to help drive this more personal experience, are actually driving better business impact. When we think about hybrid cloud which enables you to leverage all of your investments across your infrastructure we’re actually seeing two and a half times value than traditional models. We’re also seeing the benefits from regulatory cloud and capabilities that we’re putting into our platforms. We just announced a financial services cloud and we’ll do the same with insurance and healthcare.
We’ll take the costs out of the regulatory risk and compliance while providing more value from a business perspective. We’ve had a number of relationships across multiple industries including BNP Paribas, MUFG Bank, Adobe, across telecom with Vodafone Idea, Bharti Airtel, Verizon, and even Schlumberger and Ernst & Young. Companies are seeing the value of these platforms. In fact, in the study, 94% of the respondents said that by 2022 they would have a new business platform model that would continue to power their business.
Barriers To Digital Transformation Have Broken Down
We see continued growth of hybrid cloud and of cloud services after the pandemic. It’s touching every element of a company’s business processes from the inside out and the outside in. The inside out includes HR, finance, risk compliance, procurement, supply chain. Then the outside in, marketing, sales, customer engagement, and customer service. With marketing at marketing events, we saw a 3X response into our Think Digital than previous years because we could have more reach. So now marketing is taking into account a digital transformation of the clients’ needs.
Customer service and engagement are the number one priority of our clients. They are building and investing in the contact center to improve the experience and drive more value. This cloud platform will bring in new capabilities with 5G such as IoT (internet of things), blockchain, and of course quantum capabilities. We’ll see the technology advance while the cultural change is advancing too. The barriers have broken down now in digital transformation because of people working from home and the need to adopt faster.
IBM: Barrier To Digital Transformation Have Broken Down
After eight years as CEO of IBM, Ginni Rometty is stepping down and Arvind Krishna has been elected to replace her, according to a company press release.
Rometty is the first woman to hold the top position at IBM and oversaw the company during a period of transformation and disruption within the tech industry. She led IBM as it dealt with the rise of cloud computing, artificial intelligence and more. During her tenure, the company bet big on the hybrid cloud market, as well as its acquisition of open-source software company Red Hat.
Arvind Krishna will pick up where Rometty left off. In fact, Krishna is responsible for some of IBM’s strategic moves under Rometty. Specifically, he was the architect of the Red Hat deal, and has been a staunch proponent of IBM’s hybrid cloud approach.
“Arvind is the right CEO for the next era at IBM,” said Rometty in the press release. “He is a brilliant technologist who has played a significant role in developing our key technologies such as artificial intelligence, cloud, quantum computing and blockchain. He is also a superb operational leader, able to win today while building the business of tomorrow. Arvind has grown IBM’s Cloud and Cognitive Software business and led the largest acquisition in the company’s history. Through his multiple experiences running businesses in IBM, Arvind has built an outstanding track record of bold transformations and proven business results, and is an authentic, values-driven leader. He is well-positioned to lead IBM and its clients into the cloud and cognitive era.”
Krishna struck an optimistic tone that IBM will continue to innovate and play a pivotal role in the tech industry.
“I am thrilled and humbled to be elected as the next Chief Executive Officer of IBM, and appreciate the confidence that Ginni and the Board have placed in me,” said Krishna. “IBM has such talented people and technology that we can bring together to help our clients solve their toughest problems. I am looking forward to working with IBMers, Red Hatters and clients around the world at this unique time of fast-paced change in the IT industry. We have great opportunities ahead to help our clients advance the transformation of their business while also remaining the global leader in the trusted stewardship of technology.”
Google has announced a partnership with IBM to bring IBM Power Systems to Google Cloud, providing businesses with “a truly hybrid environment.”
For many businesses, moving to a cloud-based solution can be difficult, especially if the business relies on legacy infrastructure or workflows. As Google’s announcement says, “at one end of the spectrum, some organizations are replatforming entire legacy systems to adopt the cloud. Many others, however, want to continue leveraging their existing infrastructure while still benefiting from the cloud’s flexible consumption model, scalability, and new advancements in areas like artificial intelligence, machine learning, and analytics.”
By partnering with IBM, Google can offers customers the ability to run “IBM Power Systems as a service on Google Cloud—whether you’re using AIX, IBM i, or Linux on IBM Power.
“For organizations using a hybrid cloud strategy, especially, IBM Power Systems are an important tool. Because of their performance and ability to support mission critical workloads—such as SAP applications and Oracle databases—enterprise customers have been consistently looking for options to run IBM Power Systems in the cloud. IBM Power Systems for Google Cloud offers a path to do just that, providing the best of both the cloud and on-premise worlds. You can run enterprise workloads like SAP and Oracle on the IBM Power servers that you’ve come to trust, while starting to take advantage of all the technical capabilities and favorable economics that Google Cloud offers.”
Some 80% of Fortune 100 companies rely on IBM Power Systems, with the platform especially popular in finance, retail, insurance and healthcare. These are also industries where even minimal disruption can be disastrous. Google’s announcement provides Power Systems users with another option to move towards a cloud-based architecture, while at the same time giving Google one more way to continue growing its cloud business.
After years of convincing customers they should rent server space and computing power, Amazon is in the business of selling rack servers. It’s a major shift in strategy for the company, as it bows to market realities and embraces a hybrid approach.
Hybrid cloud options contain a mixture of onsite and cloud servers, giving customers options and flexibility that one alone would not provide. In an effort to stay ahead of Google and Microsoft, Amazon is embracing the idea.
Amazon Web Services (AWS) announced AWS Outposts at the AWS re:Invent 2019 conference.
“Over the past several years, AWS has delivered services like Amazon Virtual Private Cloud (Amazon VPC), AWS Direct Connect, and Amazon Storage Gateway to make it easier for customers who want to run their on-premises datacenters alongside AWS. In 2017, AWS collaborated with VMware to introduce VMware Cloud on AWS, giving the vast majority of companies who are virtualized on VMware the ability to use the same on-premises VMware tools that they had been using for years to manage their infrastructure on AWS. Still, some customers have certain workloads that will likely need to remain on-premises for several years such as applications that are latency sensitive and need to be in close proximity to on-premises assets. These customers would like to be able to run AWS compute and storage on-premises, and also easily and seamlessly integrate these on-premises workloads with the rest of their applications in the AWS Cloud. Early attempts by other vendors have fallen short – unable to provide the ability to use the same APIs, the same tools, the same hardware, and the same functionality across on-premises and the cloud, therefore unable to deliver a truly consistent hybrid experience to customers.
“AWS Outposts solves these challenges by delivering racks of AWS compute and storage, with the ability to run services like Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Elastic Block Store (Amazon EBS) on this AWS-designed infrastructure. AWS Outposts will initially come in two variants:
For customers who want to use the same VMware control plane and APIs they’ve been using to run their infrastructure, they will be able to run VMware Cloud on AWS locally on AWS Outposts. This variant, called VMware Cloud on AWS Outposts, delivers the entire VMware Software-Defined Data Center (SDDC) – compute, storage, and networking infrastructure – to run on-premises and managed as a Service from the same console as VMware Cloud on AWS, using AWS Outposts and enables customers to take advantage of the ease of management and integration with AWS services that they enjoy today.
For customers who prefer the same exact APIs and control plane they’re used to running in AWS’s cloud, but on-premises, they can use the AWS native variant of AWS Outposts. These customers will have the opportunity to run other software with native AWS Outposts, starting with a new integrated offering from VMware called VMware Cloud Foundation for EC2, which will feature popular VMware technologies and services that work across VMware and Amazon EC2 environments, like NSX (to help bridge AWS Outposts to local data center networks), VMware AppDefense (to protect known good applications), and VMware vRealize Automation (for workload provisioning).
“In both cases, AWS will deliver the racks to customers, install them (if customers prefer), and handle all maintenance and replacement of racks. These AWS Outposts will be an extension of a customer’s Amazon VPC (in the closest AWS Region to each customer), and customers can seamlessly connect from their AWS Outposts to the rest of their applications in AWS or any other AWS service.”
IBM is in the midst of being reinvented and the acquisition of Red Hat is a big part of that. A primary business for IBM is helping companies integrate their mission-critical work into a multi-cloud world in a secure way. “All of us know the big job is how to manage it, access controls, security, know what data is where, and how much data you want flowing,” says IBM CEO Ginni Rometty. “We will be number one in what the world calls hybrid cloud.”
Ginni Rometty, CEO of IBM, recently discussed on Fox Business at Davos 2019 how the acquisition of Red Hat is part of the reinvention of IBM and how this is part of their strategy to be number one in hybrid cloud:
We Have Been Reinventing IBM
We have been reinventing IBM. We just had our earnings and 50 percent of the company has moved into these new products and services which are always redoing the portfolio. One of the things with the Red Hat acquisition is really what I see in front of us, which I call chapter two of the cloud. For most enterprises, chapter one was the easy things that they moved. Pretty low hanging fruit. If you sized it, 20 percent is what’s moved to the cloud. The other 80 percent is not just more complex, it’s got a different complexion.
Most companies weren’t born yesterday. It’s like if you have a house already. You’ve got your house. You say these rooms I’m not going to touch, I’m going to leave them as they are. These rooms are going to get remodeled, moved to the public cloud. These are so sensitive, I’m going to keep them right here and put them in a private cloud.
Greatest Proponent of Open and Open Source
That’s really what Red Hat and us together says to all of our clients out there. With this journey now, you are going to have multiple clouds. They are difficult to manage with security and moving of data. Don’t get locked into any single cloud. We now become the greatest proponent of open and open source.
Part of Red Hat is how you build things so they can move from private to multiple clouds. This allows clients to move to a multi-cloud era, open so they are not locked in, in a very secure way, so they make their cloud journey from where they start. It really allows us to own the starting point and the ending point of a cloud journey. That’s part of the portfolio.
Number One in Hybrid Cloud
When you think of IBM, think of your mission-critical work. We believe it will be a multi-cloud world, but we believe we will have the most secure public cloud for mission-critical work. We will also help you manage and integrate all of these other clouds together. We are the cloud for business. That’s how I would differentiate us. For big business as well as small. You will see a different mix between what percentage runs on a public cloud versus a private cloud.
Most clients may have their CRM system with Salesforce, their HR system with SAP or Workday, etc. They already have all of this different real estate. All of us know the big job is how to manage it, access controls, security, know what data is where, and how much data you want flowing. We will be number one in what the world calls hybrid cloud.
IBM is the Greatest Supporter of Open Source
Our familiarity and investment in Linux goes back 20 years. Linux is the open operating system and what people mostly think about when they think of open. We are one of the top contributors to all the projects out there. So I think counter to what may be the perception out there, IBM is the greatest supporter of open source. Take blockchain, for instance, that’s all open source. We open sourced that on purpose to make it fly.
Red Hat Linux is the number one operating system in on-premise as well as number one in the cloud. This year it took over number one over the others. We view this a part of our DNA to be open. I don’t see it cultural. It’s really important for what they do that it not just run on IBM. It’s going to run on all of our competitors. This is friendly competition as well since these are our clients that use all these. It will be on all the other clouds.
We want to preserve that and make sure that they have equal opportunity with what they do. Then what we do is we take the same products from Red Hat and we add to it and then we also compete in that world. We have a strategic imperative around cloud, around analytics, and around mobility. That’s the part of the business that is now close 50 percent of the company.
Cloud computing has brought numerous benefits to companies. However, putting all data on the public cloud is something that a lot of IT admins are concerned about. This is why a number of businesses have opted to utilize a hybrid cloud environment. This allows them to store some data in the public cloud and others in an on-site cloud storage.
However, the hybrid cloud isn’t perfect. There are several security problems that companies should watch out for. Here are five security issues to keep in mind:
Inadequate Data Redundancy
Cloud storage service providers commit a substantial amount of resources to ensure the infrastructure is accessible and open whenever end users need it. Unfortunately, problems will inevitably arise. Some well-publicized outages like those involving Amazon Web Services and Microsoft Azure have underlined the risk of running applications using just one data center. Cloud architects need redundancy across data centers to lessen impact of such outages.
This lack of redundancy can end up being amajor security risk to a company’s hybrid cloud, particularly if redundant data is not distributed across various data storage centers. Cloud architects can work around this by implementing redundancy via numerous data centers from one provider, using several public cloud providers or a hybrid cloud.
Data Compliance
Maintaining and showing data compliance can be more challenging with a hybrid cloud. Aside from having to ensure that the public cloud provider and the hybrid cloud you’re using are in compliance, you also have to prove that the means of coordination between the two is also compliant.
Poorly Assembled SLAs
Public cloud providers work hard to ensure that they meet all the conditions listed in their service level agreement (SLA). Businesses should also make sure that their private cloud can also live up to the same expectation. Otherwise, the company might need to develop SLAs based on the outlook of the lower of the two clouds, which could be your private cloud.
It’s best to gather data on your private cloud’s availability and performance under pragmatic conditions. Watch out for possible issues with integrating private and public clouds that could hinder service. For instance, if a vital business driver for the private cloud is storing confidential and sensitive data on-site, then your SLA should reflect the limitations to which the company can utilize the public cloud for certain services.
Risk Management
From a business point of view, information security revolves around risk management. Cloud computing, especially in hybrid clouds, entails the use of new application programming interfaces (APIs), demand advance network configurations, and pushes the boundaries of a conventional system administrator’s abilities and knowledge.
Unfortunately, these factors can lead tonew types of threats. While cloud computing is just as secure as internal infrastructures, the hybrid cloud has a more complex system that IT admins have limited experience in handling, and this can create problems.
As with any technology, problems do arise. Luckily, several traditional IT and security vendors are already working on improving their products in order to support hybrid cloud issues. There are also third parties that can deliver niche tools to bolster particular security configurations.
listed in their service level agreement (SLA). Businesses should also make sure that their private cloud can also live up to the same expectation. Otherwise, the company might need to develop SLAs based on the outlook of the lower of the two clouds, which could be your private cloud.