Posts Tagged ‘Cloud’

IBM pushes hard into the enterprise cloud

December 18th, 2014

IBM is building out its global computing network in a bid to focus on the enterprise cloud market.Outsourcing22

The company announced today that it is adding cloud centers in 11 new locations.

In a $1.2 billion investment, IBM has built cloud centers in Frankfurt, Mexico City and Tokyo. The other eight new locations come to IBM through a partnership with Equinix Inc., which operates data centers across the globe.

The partnership will give IBM access to data centers in Australia, France, Japan, Singapore, the Netherlands and the U.S., boosting IBM’s cloud network to a total of 48 cloud centers.

That growth is aimed at helping IBM grow its hybrid cloud business for enterprise clients.

“IBM recognizes that businesses and governments need the cloud to help them innovate, grow and operate more efficiently in concert with their existing IT investments,” said Robert LeBlanc, senior vice president of IBM’s software & cloud solutions group, in a statement. “Just as we helped major organizations transform in each preceding era of IT, IBM now serves as the cloud platform for the enterprise.”

This is a good move for a company that wants to court the enterprise, which is increasingly moving to the cloud, said Charles King, an analyst with Pund-IT, Inc.

“Lots of people are wondering if IBM is entering the market too late. I disagree with that,” King told Computerworld. “I think the market for cloud is not as mature as some people seem to think it is. There’s a lot of headroom in the hybrid cloud, in particular. As the market has become increasingly competitive, there’s going to be some interesting shakeouts in the months ahead.”

That shakeout should see major cloud players like Amazon, Google, Microsoft and IBM – grappling for marketshare, though King didn’t dare to guess where those top players will be a year from now.

He’s confident that IBM will continue to be a major cloud player with traditional business clients.

“You can see the other cloud players, including Amazon, making a pitch that their own services are ready for the enterprise,” said King. “IBM, though, is very well-positioned for that market right now. Markets evolve and mature in sometimes curious ways, so it will be interesting to see how IBM bears up as other companies try to invade the enterprise cloud space.”

Dan Olds, an analyst with The Gabriel Consulting Group, said IBM is putting some muscle into the game with what had to be a sizable investment in these new cloud centers.

“The cloud market is crowded and highly competitive,” Olds said. “IBM is trying to differentiate themselves through providing a higher level of service and support, along with giving customers the ability to negotiate their own service levels for their IBM clouds. Other competitors will do this as well, of course, but IBM’s experience in providing these types of services for decades through their outsourcing/hosting services arm should give them an advantage with these customers.”

Having an IBM cloud center located in their country will also give some customers the ability to use cloud computing for likely the first time, he added.

Many businesses and government organizations are not allowed to use cloud services that host their data outside their country.

“This could give these types of customers a chance to dip their toes into the cloud and see if it’s all it’s cracked up to be,” said Olds. “So, really, the key part of this announcement is the geographic spread of IBM’s cloud centers.”


5 Major IT Outsourcing Trends for 2015

December 17th, 2014

As 2014 draws to an end, businesses all over the world are guaranteed to be enthusiastic over the new opportunities that 2015 has to offer, particularly in the Information Technology (IT) segment. Next year, IT services and products are expected to fuel productivity, streamline organizational growth, drive innovation, develop capabilities, and enhance customer relationships.Outsourcing25

A post at lists down five of the major developments in the IT segment that companies should prepare for:

Innovative mobile apps and solutions
Businesses will integrate mobility and upgrade their already advanced capacity in various ways, and with that comes countless challenges which include security and flexibility. Regardless, firms will continue to empower their capacities with new applications that will help them properly engage with their customers.

Latest in cloud technology
Cloud technology is one of the strongest movers in today’s business industry. It enables companies to reduce the cost of operations and overhead expenses by paving the way for accessible data storage and information. As IaaS and PaaS continue to gain traction, development and testing of new applications are widely reinforced by this IT feature. The cloud has evolved from being merely a tool for disaster recovery and testing. The cloud is expected to assist in mobile functions and big data application development.

In-depth coverage on data and analytics
More applications will be created next year that are geared towards data and analytics. Businesses are seen taking advantage of all the data they collect from all activities, and are using it to improve competencies and strategies. Some of the trends in big data next year consist of linking Systems of Record (SOR) for various types and sources of content such as data, audio, video, and images.

New features in interface design and usability
Next year, the top trends for design will still be focused on In-web design – those that are used in code-free platforms, responsive design for mobile and smart gadgets, and flat design. For coding languages, the latest ones such as Hack, Go, and Swift will find their place amongst C, C++, Objective-C, HTML5, Python, Ruby, PHP, Java, C#, Javascript, Ruby, CSS, and SQL.

Covering protocols, domains, and applications
Forrester Research said the Internet of Things (IoT) will move to software from hardware next year. Cloud services will be utilized to connect all the rules or requests across all domains and platforms. Analytics and data will also increase as IoT continues to drive businesses including small to medium-sized ones to digitized processes.

By considering these trends next year, organizations can ensure that core strategies are not derailed and they will maintain their uniqueness in the aggressive and competitive world of business. – See more at:

Google Wins PCI Compliance Certification for Cloud Platform

December 3rd, 2014

The cloud platform certification should appeal to companies looking to outsource the processing of payment data to a third party that complies with PCI requirements, analysts say.Outsourcing111

Google has validated its Cloud Platform for compliance with the Payment Card Industry Data Security Standard (PCI DSS) in a move designed to appeal to businesses handling large volumes of credit and debit card data.

The certification will allow companies to store and process payment card data on the Google Cloud Platform in a manner compliant with PCI’s security requirements.
“We are offering the ability for customers that fall under PCI compliance rules to be able to build applications and services on top of the platform at Google scale” said Matthew O’Conner, product manager with Google’s Cloud Platform group. “They can be sure the platform is validated against PCI specifications.”

O’Connor said Google has been working with a third-party assessor for the past several months to get the various components of its Cloud Platform, such as the Compute Engine, App Engine, Storage Engine and Big Query analytics engine PCI certified.

“PCI has long been on our roadmap,” O’Conner said. “We have long had customers ask us to meet the requirements. We made a commitment to it and now we can offer them a compliant platform,” he said.

The PCI mandate developed by Visa, MasterCard, American Express and other major credit card brands, requires all companies handling payment card data to meet a formal set of security standards.

Companies that are not compliant with the requirements face stiff fines and other penalties if they suffer a payment card data breach. Over the years that PCI has been in effect many companies have complained about the standard being too costly and cumbersome to implement.

The PCI Security Council, which administers the standard on behalf of the card brands has recently begun requiring companies to ensure that any third-parties handling cardholder data on their behalf, also need to be PCI compliant.

“[So] in order for Google’s cloud offerings to be adopted by large retailers, they needed to remove the PCI DSS compliance ambiguity about their services,” said James Huguelet, principal at The Huguelet Group LLC, a consultancy in Sugar Grove, IL. “This paves the way for Google’s platform to be leveraged by merchants of all sizes,” he said.
Gartner analyst Avivah Litan, predicted that Google’s new PCI status would likely be of interest particularly for large businesses.

Large retailers often retain huge archives of customer cardholder data for a variety of reasons like chargeback management, fraud resolution and data analytics. The data presents a major risk for these companies and make them inviting targets for cyber-attackers.

“A lot of companies want to get rid of their PCI problem as much as they can,” Litan said. “One way to minimize the size and scope of the security audit is to outsource as much payment data as possible,” to third parties like Google, she said.

A PCI-compliant Google Cloud Platform gives retailers an alternative to having card data hosted and managed by their payment processor, Litan said. Google will still have to overcome the hesitation that many companies have about outsourcing any data, let alone something as sensitive as payment card data, to the cloud.

But for someone that already feels comfortable about outsourcing to the cloud, the new PCI-compliant Google Cloud Platform could hold some appeal, she said.

Google is not the only major cloud provider with a PCI compliant platform. Others like Amazon and Microsoft have achieved a similar certification for their cloud offerings. All Amazon Web Services that support storage, transmission or handling of payment card data are PCI certified, as are Microsoft’s Azure services.


IBM bags multi-billion dollar outsourcing deal with ABN AMRO

December 2nd, 2014

IBM has bagged a multi-billion dollar 10-year deal with Dutch bank ABN AMRO, the second major European outsourcing win for the company in the last month.Outsourcing10

The deal is likely to bring cheer to Big Blue, following its recent “disappointing” third-quarter results.

The deal includes a private IBM cloud, mobile computing, managed services for mainframe, servers, storage, end-user computing, and support. IBM did not disclose the full details.

Piet Bil, IBM managing director for ABN AMRO, said the deal is intended to help the business become a digital bank.

In November IBM signed a seven-year €1bn (£800m) contract with Lufthansa to integrate mobile, social and analytics across the airline.

In its last quarter results posted in October, revenue fell across the company’s divisions, dropping six per cent to $22.4bn.

IBM chief executive Ginny Rometty said the company was disappointed in its performance and blamed a “marked slowdown in September in client buying behavior.”

Hardware fell most dramatically, down 15 per cent to $2.4bn. The company’s global services outsourcing division fared slightly better, down three per cent to $13.7bn.

Big Blue was asked if the results would prompt it to follow HP’s lead and split the business up. IBM said it was already divesting under-performing businesses such as the microelectronics unit, which is being passed over to Global Foundries.


Firms struggling to keep pace with increasing IT security risks

November 27th, 2014

According to a new global survey, many firms are struggling to keep pace with global IT risks amid quickly changing technology. The fourth annual IT Audit Benchmarking Survey was produced by global consulting firm Protiviti and global IT association ISACA.Outsourcing11

The survey examines how organizations are assessing and mitigating critical business and technology risks, polling more than 1,300 IT audit executives and professionals worldwide.

“Concerns over cybersecurity, industry disruptors and regulatory compliance have moved many organizations, and audit committees in particular, to become more engaged in the IT audit function,” said David Brand, a Protiviti managing director and the firm’s global IT audit leader. “We see some positive trends in our results, notably in the number of designated IT audit directors and their regular attendance at audit committee meetings. However, we also see significant gaps to be addressed, including the frequency with which IT audit risk assessments are conducted.”

According to the survey, the top 10 global IT challenges identified are:

1. IT security and privacy/cybersecurity
2. Resource/staffing/skills challenges
3. Emerging technology and infrastructure changes: transformation, innovation, disruption
4. Regulatory compliance
5. Budgets and controlling costs
6. IT governance and risk management
7. Big data and analytics
8. Vendor, third-party and outsourcing risks
9. Cloud computing/ virtualization
10. Bridging IT and the business
“Companies cannot ignore the significant security and privacy risks that face their business today,” said Brand. “Based on the survey results, more organizations are recognizing the mission-critical nature of IT internal audit in combating these risks, yet many companies are simply not institutionalizing the processes needed to support this function.”

The good news is that companies are paying more attention to the risks. The survey found that more than half of the largest public companies surveyed have a designated IT Audit Director or equivalent position within their organizations, and 48% reported that these individuals regularly attend audit committee meetings. That is doubled the number from just three years ago the survey noted.

Additionally, respondents indicated that their audit committees have increased their involvement in the IT risk assessment process, with 20% reporting significant involvement as compared to 14% in 2013.

“The increased resources and attention to IT audit is a positive sign that companies of all sizes around the world are recognizing the significant benefits of this critical function,” said Robert E. Stroud, CGEIT, CRISC, international president of ISACA and vice president of strategy and innovation at CA Technologies. “Even though organizations have different goals and operate in different marketplaces, there are many common pain points and risks, such as fraud, cybersecurity incidents, rising costs, project success/failure, outsourcing issues and regulatory requirements that can be addressed with effective IT audit management.”


IT Spending to Rise, Though Growth Remains Sluggish

November 19th, 2014

The outlook for 2015 is mostly positive, with innovations in mobility, business intelligence and cloud computing, Computer Economics found.Outsourcing4

IT operational spending is projected to increase 3 percent at the median in the United States and Canada as tech executives look ahead to 2015, seeing a business climate that is improving with sustainable, if not remarkable, growth, according to a report from Computer Economics.

The outlook for 2015 is mostly positive, with innovations in mobility, business intelligence and cloud computing enabling businesses to derive transformational value from their IT investments.

However, the report warned that at the same time, IT spending faces real constraints in the slow-growth environment, and IT executives will need to grapple with finding resources to maintain existing infrastructure while investing in transformational technology—a factor that is expected to remain a challenge for many years ahead.

“Our study shows that many IT organizations will be budgeting for projects in these areas and fewer are budgeting for infrastructure projects,” John Longwell, vice president of research at Computer Economics, told eWEEK. “From other research, we can show that companies that rely mostly on the cloud have lower IT spending than the norm.”

The annual report provides guidance for IT executives as they firm up spending plans for the coming year and is based on the company’s survey of 128 IT organizations worldwide, including 68 IT organizations in North America.

The study assesses IT spending plans for 2015, priorities for IT spending and investment, and plans for hiring, outsourcing and use of contractors and part-time workers.

“The confidence is generally good and the hiring that is occurring reflects that sentiment. IT organizations are no longer just relying on contractors, but they are bringing on regular, full-time employees,” Longwell said. “This is a shift that has been occurring over the last year and it reflects increased confidence in the sustainability of the recovery. We are also seeing less emphasis on cost cutting and more emphasis on improving IT service levels.”

The report projected IT capital budgets will remain flat, showing little or no growth at the median, and IT organizations will continue to invest in enterprise applications, security and business intelligence.

However, spending on data center infrastructure is expected to remain weak, but more than half of IT organizations will increase IT staff headcount.

“Companies are investing in business systems that promise to enhance sales and marketing operations,” Longwell said. “There is still a focus on quick payback, but there is a greater willingness to invest strategically for growth. One reason organizations are showing more interest in cloud-based applications is the lower upfront costs and quicker return on investment.”

The company is also projecting a shift from the use of contractors to the hiring of more full-time, regular employees.The typical IT worker will receive a 3 percent pay raise, and IT organizations will need to pay greater attention to recruitment, training and retention activities.

“Capital spending will remain somewhat weak, but operational budgets are poised for modest improvement,” Longwell said. “Beyond that, we have no special insight into how things will unfold. In areas where IT can enhance productivity, companies will make those investments–otherwise, IT spending will track with top-line revenue growth.”


Cloud Computing Set to Rain on Indian Outsourcers’ Parade

November 18th, 2014

There are dark clouds on the horizon of India’s information technology and outsourcing industry.Outsourcing39

Profit growth at even India’s most successful and sophisticated software companies could be doused as companies, governments and consumers around the world do an increasing amount of their computing on the cloud, says outsourcing services advisory firm ISG Inc.FCD.UN.V +2.26%

Companies that have traditionally used in-house servers running on custom-made applications are putting more of their business on external servers and using off-the-shelf software. Using the cloud often means using fewer people so Indian software companies—once dubbed “body shops” because they could supply as many computer engineers as a project needed—are going to suffer as they lose much of their competitive advantage.

As it is only going to get cheaper and easier for companies to switch to the cloud, smart people-powered service providers need to get ready for the storm, said Sidharth Pai, partner and president for Asia Pacific region at ISG.

“This means, developing software that allows businesses to (interact) faster and more efficiently with their external stakeholders–customers, suppliers, etc.–rather than focus on changes to the internal workings of a client,” he said.

Around one in four of the deals ISG helped advise involved cloud computing last year. That’s more than three times more than the percentage of cloud deals it saw three years earlier.

India’s software and outsourcing companies are still too reliant on the business model that uses lots of relatively inexpensive Indian engineers and sends them to client sites to build software and fix problems, ISG and other analysts say.

Cloud providers use external servers, sophisticated technology and automation to manage clients data using fewer employees. Where a traditional service provider deploys one employee to monitor up to 200 servers, cloud players can use one employee to monitor up to 10,000 servers, ISG estimates.

The cloud infrastructure players are drastically cutting down prices and starting to create pricing pressure on service providers in India and elsewhere who continue to set contracts based on the number of engineers deployed in a project.

Cloud infrastructure providers such as Amazon Web Services, Red Hat, Rackspace Hosting and others are emerging as a formidable threat to Indian outsourcers and other traditional service providers and consultants including International Business Machines and Accenture, that earn revenues from managing the technology infrastructure of clients.

Traditional service providers now have to strive to get more cloud contracts–where they help clients shift data to cloud infrastructure providers–rather than focusing on creating their own clouds, ISG said.


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