Google Cloud Lowers Prices Again, Raising the Stakes Versus AWS

Erin Moriarty

May 18, 2015

Google Cloud Platform cut prices again today, with Google boasting that the service is now 40 percent cheaper than any other public cloud provider’s.

Google reduced prices of virtual machines by up to 30 percent and lowered the cost of all Google Compute Engine Instance types as well.

So continues the years-long price war between Amazon Web Services (AWS) and Google Cloud. Each has been willing to dig deep into its own margins rather than admitting defeat by losing customers to cheaper competition — although Google has also said that Google Cloud prices will fall in parallel with the advances provided by Moore’s Law.

According to a count by Business Insider, AWS has cut its prices 44 times in the last six years, forcing Google Cloud to reduce prices several times just to keep up. In 2012, Google Cloud announced two storage price cuts, one just a day after Amazon cut its S3 storage prices by 25 percent. Last spring, Google Cloud cut prices across most major services and all regions, stealing the “low-cost provider” title from AWS.

Analysis from RBC Capital says AWS lowered prices 8 percent between October 2013 and December 2014, and Google Cloud came in just behind it at 6 percent.

While cloud providers are still lowering prices, it’s not happening with the same tenacity as it was in the past. At AWS’ most recent re:Invent conference, it didn’t even announce a price cut, which was odd considering that had become a staple of AWS news events.

It looks like the last price reduction from AWS came late last year. The decreased prices for three different types of data transfers became effective Dec. 1.

Cloud compliance, data protection top reasons for encryption

    

Cloud compliance, data protection top reasons for encryption

Date: Apr 23, 2015

Cloud computing has changed many aspects of enterprise operations in recent years, but one thing it should never alter is a company's commitment to data security. The cloud can be a great business resource, but only when proper steps have been taken to ensure that information remains protected.
The most popular way to ensure this security is by using cloud encryption, according to Rich Mogull, founder of Securosis.
"One of the best tools that we have at our disposal to protect our information as it's moving around in the cloud … is encryption," Mogull said during a recent SearchCompliance webcast titled Pragmatic Cloud Encryption.
But in order to use encryption correctly, companies must understand how it benefits their cloud computing model, Mogull explained. The first step is determining how company data is stored in the cloud. This will depend on the cloud provider and whether the cloud computing model is Infrastructure as a Service (IaaS), Platform as a Service, or Software as a Service.
In IaaS, for example, there is physical storage followed by layers of abstraction and management, and then either volume storage or object storage. Mogull describes volume storage as a virtual hard drive, whereas object storage is like "a file system with an API layered on top."
The architecture may change for each cloud computing model, but the need for encryption does not. In part one of this webcast, Mogull discusses the four main reasons for encryption when it comes to IaaS cloud models. The first is to protect snapshots -- these information back-ups become extremely portable once in the cloud and could leave data exposed if not encrypted.
The second reason he gives is to protect against cloud administrators who may be able to see company data. Mogull describes this as a "low risk," but is still a concern for some companies.
The third reason, on the other hand, is one of the most important and obvious reasons for encryption: to achieve compliance. Often, regulations such as HIPAA/HITECH require cloud encryption for a company to be compliant.
Mogull's list of reasons for encryption ends with the discussion of protecting against what he calls "seizure spillage" in IaaS. Since cloud computing has a "shared tenancy" model, company information in the cloud could be exposed if the cloud is seized. Encryption, however, would help protect that information.
Watch part one of this webcast to learn more about the basics of cloud architecture and how encryption is vital to cloud computing security. Then visit SearchCompliance to view part two, where Mogull continues his discussion on pragmatic cloud encryption for the digital age.
Let us know what you think about the story; email Ben Cole, site editor. For IT compliance news and updates throughout the week, follow us on Twitter @ITCompliance.

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• Five key strategies for cloud-based e-discovery management

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• Hybrid strategies common as organizations strive for cloud GRC

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• Cloud computing issues and challenges: The GRC factor

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Six must-have features when storing data in the cloud

          By Staff Writer / April 15, 2015

Cloud storage prices are flirting with free, and capacity limits are on the rise. Just this past March, Google announced its Cloud Storage Nearline service that costs a penny a month for 1GB of storage. Service providers are dropping prices mainly because they can; technology advances – particularly for data that doesn’t need to be accessed often or quickly – has significantly increased storage efficiency, making it possible for providers to offer next-to-nothing prices. But if enterprises are going to take public cloud storage services seriously, they’ll need more than vast bins of low-priced storage to make it work.

“I think the biggest misperception we get when we talk to customers about cloud storage in particular is they view it as complete outsourcing,” said Henry Baltazar, senior analyst serving infrastructure and operation professionals with Forrester, in a webinar. “They think of it as `Okay, if I pull out my credit card, my problems are going to go away.’ And there’s really nothing farther from the truth. You still have a lot of things you have to care about.”
As such, many cloud service providers are offering value-add features, while add-on products such as cloud storage gateways, file sync and share, and hybrid backup are also becoming popular. These are the kinds of features and functions that differentiate one cloud from another. And enterprises should carefully evaluate them when making their decisions. Among the most important considerations are:
Security – Managed users access, authentication, and encryption are essential to protecting data regardless of where it’s stored; this is especially true when moving data outside the confines of the corporate data center. Reporting features for compliance are also necessary.
Redundancy – Having data stored at different geographical locations for redundancy just makes good sense, even if that means a hybrid approach where data is stored in the data center and backed up in the cloud.
Disaster recovery – Essential in case of natural, machine, or human-driven events. Enterprises can adjust these features based on their tolerance for downtime and data loss. If that tolerance is close to zero – for, say, financial services firms that execute trades for clients – those companies must be prepared to pay for advanced capabilities.
Collaboration tools – Employees and partners need fast, simple access to files. Tools that let them drag and drop files in folders, share files with simple links, and manage access to files keep them productive.
Administrative tools – For enterprises to maintain control over their data, they’ll want to be able to do things like manage permissions, set policies, and establish expiration dates for files.
Mobile access – With the explosion of mobility in the enterprise, providing fast, secure access to cloud-based storage from a variety of devices is essential.


http://www.thoughtsoncloud.com/2015/04/six-must-have-features-when-storing-data-in-the-cloud/

Find your perfect cloud adoption pattern

March 3, 2015 8:00 am by Javier Barabas

When a company embraces the cloud, it must decide which adoption pattern best fits the workloads it plans to migrate to the cloud. That decision shouldn’t be made lightly—the more informed IT pros are going into the process, the easier it will be.

In this post, I’ll outline how you can find the right cloud adoption pattern for your workloads.

Cloud adoption patterns

An adoption pattern is simply the way a company consumes services from the cloud. There are different boundaries between different adoption patterns, and I will clarify each one here.

Each adoption pattern has its own characteristics, benefits and limitations.

In a traditional (or on premises) way of consuming services or resources, the owner of the infrastructure is responsible for managing every piece of hardware and software he or she uses (the black layers in the above chart). Normally, it takes some time for a user to access a new resource, but it can be configured exactly as needed.

The only limitation a user has when requesting a new resource is the availability and perhaps the quota his department has on the complete infrastructure. Once deployment takes place, the final user has the ability to configure and modify every aspect of the resource he now owns. Depending on the company, central services like patch management, security compliance with corporate rules, software upgrades, monitoring, backup and more can be managed in a centralized way. The costs (capital investments) of the resources are permanent and resources are often sub-utilized.

There are three main off-premises adoption patterns:

• Infastructure as a service (IaaS). Using this pattern, a company can consume infrastructure from the cloud through a contract with a cloud service provider. The provider can supply any requirement of resources (typically CPU, memory and storage) and the company only has to pay per use.

Compared with the on-premises business model, the IaaS pattern provides a flexible way to acquire resources when needed and those services can be terminated any time. The management responsibility for the company starts with the operating system layer and the provider ensures the availability and reliability of the infrastructure provided. Hardware monitoring is usually done by the provider and is transparent to the client company.

Extended services like patch management and backup can be part of the contract or managed directly by the client company. IaaS services are starting to become a commodity and all cloud service providers are trying to provide services with extended capabilities like PaaS and SaaS (see the following paragraphs). For an example of this cloud adoption pattern, check out IBM SoftLayer.

• Platform as a service (PaaS). Using this adoption pattern, a client company can consume platform services while avoiding the need to manage the underlying infrastructure (see the above chart). The PaaS model is related to the “API Economy.” API means application programming interface and using this model, an application can be designed and deployed just by calling on available services instead of creating new ones.

Applications created using those services pay only for the time and services used , making transparent the management process needed to maintain those services as ready and up-to-date. Common services offered in this way are databases, development runtimes, security processes like single-sign-on and more. PaaS providers are growing fast enough to provide a wide range of services, facilities and development tools to make developers’ lives easier.

Small companies and startups find in this adoption pattern an excellent platform to test and develop applications without an initial investment and a way to “fail fast.”  By failing fast, a new application can be tested and evaluated by users, and modified fast enough to avoid the initial implementation costs of on-premises projects. For an example of this cloud adoption pattern, check out IBM Bluemix.

• Software as a service (SaaS). With this cloud adoption pattern, a client company can gain access to an application ready to be used and  only pays for the users for whom the service is contracted. The underlying infrastructure and software needed by the specific application will remain transparent and its management can be done by the provider. This business model is very elastic and grows as needed. Compared with an on-premises model,  installation and initial configuration are not needed, nor is the hardware to run the application. There is  just an onboarding process. Configuration and customization for SaaS applications are minimal compared with the on-premises equivalent. The application consumed as SaaS is always up-to-date and available, and its health is monitored by the provider. For an example of an actual SaaS marketplace, check out the IBM Cloud marketplace.

There is no one size fits all for cloud adoption. Companies should consider their own cost and benefit equation and then decide on the best model. Each application and process needed is a workload and a deep workload assessment is normally performed by companies that have decided to move to the cloud.

Where are you and your company in the cloud adoption process now?

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About Javier Barabas

For the last four years Javier has been working as a SWG Cloud Architect for the Spanish South America region conducting several Cloud Adoption & Roadmap workshops in different industry customers and planning SCP/SCO solutions. He has published many assets in iRAM and the most popular was the "ISDM 7.2.1 Installation and Configuration Guide" with more than 600 downloads. He is a member of the IBM Academy of Technology and Chair of the Technical Council of Argentina.

View all posts by Javier Barabas →

Become Agile With Information to Speed Past Competition

Become Agile With Information to Speed Past Competition

10 September 2014 by Steve Leung in Analytics - No Comments

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With an unlimited amount of information about products and services accessible from as close as their smartphones, customers are more empowered than ever. To adapt and succeed in this increasingly competitive landscape, companies must rely on employees at the front lines of customer interactions to stay ahead of consumer demands.  

Manage Change by Starting With the Customer

Front-line workers in the trenches must be armed with the right tools to discover insights and be agile enough to keep up with evolving customer demands. Forrester Research has found that successful companies have one thing in common: the ability to effectively manage change.

“Employees down in the trenches, in individual business units, are the ones who are in close touch with customer problems, market shifts, and process inefficiencies,” notes Boris Evelson, Forrester vice president and principal analyst, in a blog post. “These workers are often in the best position to understand challenges and opportunities and to make decisions to improve the business. It is only when responses to change come from within, from these highly aware and empowered employees, that enterprises become agile, competitive, and successful.”

Without the right tools, however, many companies struggle to stamp out “shadow IT,” disparate data analysis methods that employees may have turned to in the absence of flexible technology.

“Point-and-click, drag-and-drop guided user interfaces may be intuitive to an experienced professional with a background in command line interfaces, but not so obvious to a millennial who grew up with a thumb-typing mobile phone UI,” Evelson adds.

What Tools Help Manage Change?

To become agile enough to manage change, companies must embrace data analysis tools that allow them to identify and react quickly to change, including:

• Self-service analysis: “What are the BI platform features that enable technology professionals to empower business user self-service capabilities?”
• Automated analysis: “Does the business intelligence (BI) platform support various self-service BI automation processes that allow business users to do more with less?”
• Self-provisioning applications and data: Business users must be able to quickly connect to data sources.
• Data integration: Users need to be able to perform data transformation tasks such as data mashups.
• Effective user interfaces: Front-line employees need to be able to create their own reports and dashboards.
• Advanced data visualization: Business users need rich content visualization like custom charts and graphs and geospatial representations. They should be able to efficiently and effectively visualize data sets and socialize insights

http://www.tibco.com/blog/2014/09/10/become-agile-with-information-to-speed-past-competition/?adbsc=social_tibcoblog31330656

Amazon’s Cloud Is Growing So Fast It’s Scaring Shareholders

• By Robert McMillan  
• 07.25.14  |  
   

The view from the Amazon Web Services building, in downtown Seattle. Mike Kane/WIRED

Amazon has pulled off a pretty amazing trick over the past decade. It’s invented and then built a nearly $5 billion cloud computing business catering to fickle software developers and put the rest of the technology industry on the defensive. Big enterprise software companies such as IBM and HP and even Google are playing catchup, even as they acknowledge that cloud computing is the tech industry’s future.
But what kind of a future is that to be? Yesterday Amazon said that while its cloud business grew by 90 percent last year, it was significantly less profitable. Amazon’s AWS cloud business makes up the majority of a balance sheet item it labels as “other” (along with its credit card and advertising revenue) and that revenue from that line of business grew by 38 percent. Last quarter, revenue grew by 60 percent. In other words, Amazon is piling on customers faster than it’s adding dollars to its bottom line.
The company’s chief financial officer, Tom Szkutak, blamed the drop on “substantial” price reductions the company has made to products such as its core EC2, storage and database services. “They ranged from 28 percent to 51 percent depending on the service,” he said on a conference call with analysts.
To a certain extent, Moore’s Law and the growing economies of scale automatically build cost savings into Amazon’s giant cloud. After all, if chipmakers deliver more and more transistors every two years, Amazon should be able to do more computing for less.
But it’s facing increased competition from Google and Microsoft. And IBM and HP want in on the game too.
The thing is that even as Amazon’s business matures to the size of a company like VMware, its worrying to investors to see profitability slipping. That’s pretty much the meta-narrative of Amazon as a whole, though, which says it could lose as much as $810 million in the current quarter. The company is taking losses to invest in the future, and Amazon’s 10 percent stock drop today shows that some investors are uncomfortable with that.
Not Amazon’s management, though. “We love that business,” Szkutak said, referring to AWS. “It’s doing great and we’re very pleased to have the opportunity to invest in it.”
The question is, when will Szkutak have the opportunity to cash in? Surely the company’s growing legion of AWS users hope that day never comes.


http://www.wired.com/2014/07/amazons_cloud/?mbid=social_twitter

IBM And SAP Have A Tough Road Ahead Against Amazon's Low Margin Cloud

Tech titans are hoping the cloud will save their businesses (and profits), but it's more likely to do the opposite.
Author: Matt Asay Publish date: January 22, 2014


Two tech titans of yesteryear, IBM and SAP, had depressing quarterly earnings call this week. The worst part? Both are pinning their hopes on the very thing that is eating their lunch: cloud computing. And both are going to have to grapple with the profit-destroying machine that is Amazon Web Services. As Paul Ramsey, co-founder of the PostGIS open source spatial database, asks, "Has anyone ever gotten rich competing with Amazon?"
The answer is no.

Teaching Old IT Vendors New Cloud Tricks

In a statement SAP declared that it, "anticipates [its] fast-growing cloud business along with growth in support revenue will drive a higher proportion of more predictable, recurring revenue in the future." But if it's growing so fast, why has the company had to delay profits by two years?
As for IBM, its hardware business took a serious beating, while other areas also struggled to grow:

It's not surprising, then, that IBM would be looking to offload hardware businesses while investing heavily in cloud.
What is surprising, however, is that these IT heavyweights think they can find high-margin businesses running in Amazon's low-margin cloud world.

Playing Amazon's Game

No matter how much the tech industry may want to pretend that fat cloud profits sit just beyond Amazon's reach in private cloud or hybrid cloud, the reality is that Amazon owns the cloud. Today its footprint is primarily felt in the Infrastructure-as-a-Service (IaaS) market, where it has five times the utilized capacity of its next 14 largest competitors (excluding Google), according to Gartner. But it's a dead certainty that its influence will be felt in adjacent markets like Platform as a Service (Paas.
Oracle was the first to declare itself a serious Amazon Web Services (AWS) competitor, insisting that "Our intention is to sell our customers infrastructure as a service and the same customer a highly differentiated platform as a service will let us get better margins and highly differentiated suite of enterprise applications for the cloud."
Good luck with that.
Meanwhile, Amazon just announced its 40th price drop since 2006. How do IT incumbents like IBM, Oracle and SAP expect to match Amazon's AWS pricing power when each carries decades of built-up overhead?

One answer, of course, is that they can't. Cowen & Co. analyst Peter Goldmacher, writing of SAP, cautions that a sleight of hand may be underway to distract investors from the fact that the transition to the cloud is brutally painful and may not materialize:

"The relatively small contribution of [SAP's cloud] business [at just 5% of overall revenues] leads us to believe that management's emphasis on this segment is meant to distract investors from weakness in SAP's traditional Applications businesses ... We believe SAP could choose to increase reported Cloud revenues by creatively allocating sales to the segment, like it did with HANA, particularly given that "Cloud" is a subjective term.

This isn't a criticism of SAP so much as an acknowledgment of the massive chasm between where the IT incumbents are and where they need to be to compete in modern, cloud-oriented computing. It won't be pretty. For example, in the same month that IBM announced a $1.2 billion investment in the cloud it also registered a $1 billion write-down to account for layoffs.
Creative destruction? Yes. But the destruction comes with unfortunate human costs.

Learning From Novell

I should know. I lived through a similar market shift. In 2002 I joined Novell, the once mighty networking software giant. NetWare, once the leading network operating system, was on a steady 11% annual decline. We needed to find a way to staunch the bleeding and ended up acquiring SUSE, a leading Linux provider, to give Novell a growth path.
The problem, of course, was that NetWare was a high-margin business. It was a cash cow, albeit a thinning one. Linux, for its part, had a completely different business model and required a very different cost structure to sell and support it profitably.
Which, of course, Novell couldn't do.
This isn't because the Novell employees were dumb or the management team wasn't committed. Novell had some of the smartest people I'd ever met and its executive team was fully behind SUSE Linux. But Novell was saddled with an expensive cost structure that couldn't profitably support a lower-margin, open source business. It has only been recently, as SUSE has been freed from all the Novell overhead and ancillary software, that it has been able to profitably grow.

Welcome To The Amazon Developer Jungle

In similar fashion, each of the IT heavyweights is going to have to learn to compete on Amazon's terms. It's unlikely that anyone will manage this without significant pain, or without figuring out the emerging world of developers. Quoting Gartner analyst Lydia Leong at length:

[Amazon has]essentially created demand in a new type of buyer — and they effectively defined the category. And because they’re almost always first to market with a feature — or the first to make the market broadly aware of that capability — they force nearly all of their competitors into playing catch-up and me-too.
That doesn’t mean that the IT operations buyer isn’t important, or that there aren’t an array of needs that AWS does not address well. But the vast majority of the dollars spent on cloud IaaS are much more heavily influenced by developer desires than by IT operations concerns — and that means that market share currently favors the providers who appeal to development organizations. That’s an ongoing secular trend.
This...doesn’t mean that the non-developer-centric service providers aren’t important. Most of them have woken up to the new sourcing pattern, and are trying to respond. But many of them are also older, established organizations, and they can only move so quickly. They also have the comfort of their existing revenue streams, which allow them the luxury of not needing to move so quickly.
Nothing is safe from the broader market shift towards cloud computing.

It's unreasonable to expect Oracle, IBM and SAP to make the transition to the cloud with ease. Not because they're bad companies, but because the cloud forces them to fundamentally rethink and restructure, and that's incredibly hard to do. We should expect this to translate into difficult earnings calls for all the tech bellwethers for many quarters to come.