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Rackspace, Bitcoin, Alibaba and the future of cloud

By Julia Gabel
Tue 12 Dec 2017
FYI, this story is more than a year old

Article by John Engates, chief technology officer, Rackspace. 

Australia and New Zealand are two of the most progressive cloud markets in the world.

I’m lucky enough to spend a good portion of each working year with customers, partners, and a very smart group of Rackers attending cloud industry events. 

As a result, I get to hear from the best and brightest on virtually every subject related to cloud computing — which at this point is basically everything, from smart home devices to following a tuna from catch to can (more about that later).

Then each year around this time, I sit down to think about the upcoming year: what trends am I seeing? How are global trends going to play out in Australia and New Zealand, or vice versa? What dots can I connect?

Here are my top five cloud predictions for 2018:

Alibaba: Asian cloud sees global clout grow

Alibaba is growing massively, in two ways: it has the strongest presence of any cloud provider in China and throughout Asia, and more recently, it has turned its attention to other markets, launching data centers in Australia, Europe, Japan and the Middle East.

Gartner reports that Alibaba cloud sales skyrocketed 127% to US$675 million in 2016, pulling into third place behind top-ranked AWS and second place Microsoft (with Google in fourth position).

Alibaba’s growing presence was a key reason Rackspace acquired Datapipe, our closest competitor, earlier this year.

Datapipe was named an Alibaba Cloud global managed service provider partner last year, and now helps both Chinese companies expand globally and international organizations enter the Chinese market.

The scale and experience that will come from the combination of Rackspace and Datapipe will undoubtedly accelerate the adoption of Alibaba Cloud as a strategic component of a company’s multi-cloud strategy.

I predict Alibaba will become increasingly relevant for Australian and New Zealand companies looking for a global reach, especially in China and throughout Asia, as they become comfortable with the realities of today’s multi-cloud world.

Changes to the way we consume cloud

Not only is what we do with cloud changing - think blockchain, machine learning, Internet of Things, etc. - but how and where we do cloud is changing as well.

For example, just last month Rackspace and Hewlett Packard Enterprise announced the first ever pay-as-you-go managed private cloud, a true game changer.

This OpenStack private cloud offers customers the best of all worlds - thecost-effectiveness of public cloud, the security and performance of a private cloud, managed by experts and consumed as a service.

This has the potential to push cloud into even more enterprise environments where companies may have to date, been reluctant to move some workloads.

Containers are also changing the way we consume cloud and I predict 2018 will finally see a clear winner in the container space in the Kubernetes cloud orchestration platform. The popularity of Kubernetes is phenomenal and I see 2018 being the year enterprises start to seriously bet on the platform for real production applications.

In 2018 and beyond, I predict a shift in how developers utilize the cloud and even where they deploy their applications.

Serverless computing, or functions-as-a-service, will radically simplify the use of cloud and lower the bar for software “builders” to take advantage of cloud computing. I use the word builder because even the nature of who writes software will begin to change.

Already we’re seeing low-code options that enable people to string together logical arguments to create an outcome, such as IFTTT (if this then that).

In the near future, I think we’ll see some software written with automation or artificial intelligence, directed by non-traditional software developers; think business analyst or scientist.

Where they deploy will also change, as centralised cloud data centers are augmented with capacity on the edge — think embedded computing in vehicles, factories and devices.

The serverless model of building software simplifies the creation, deployment and migration of applications and fundamentally will change who is considered a software developer.

I think a lot of these predictions are great reminders of the ever-changing nature of IT.

We’ve seen multi-cloud become the norm, IT transformation become even more critical to the success of Australian and New Zealand businesses, and now we’re watching the way we consume cloud evolve.

It’s a good reminder that the only constant is change, and it gives me the opportunity to drop in a shameless plug for Rackspace: no matter what your IT needs are or will be, consuming them as a service - which allows organizations to focus on their core business needs - really is the future.

Security, compliance and the rise of managed security service providers  

Security and data privacy issues remain on the front burner as data breaches took on even more breathtaking dimensions in 2017 — for example, global credit rating company Equifax disclosed in September that data for 143 million customers had been hacked.

I see a couple trends dovetailing next year: implementation of the European Union’s General Data and Protection Regulation (GDPR) and an increased reliance on managed security service providers.

The GDPR, set to take effect in May next year, updates two-decade old data protection policies in Europe, offering new rights for people to access information companies hold about them, setting higher standards for data management and including harsh penalties for those that don’t comply.

From 25 May 2018 businesses of any size in Australia and New Zealand may need to comply with the GDPR if they have an establishment in the European Union (EU), if they offer goods and services in the EU, or if they monitor the behaviours of individuals in the EU.

As local companies work toward compliance, they need sophisticated subject matter expertise, backed up with technical controls to show they are doing what the law obligates them to do.

Cost and lack of expertise are driving organisations that might have once felt they could do it themselves into the cloud - and into the arms of managed security service providers, which have already built operations and have the ability to help customers comply with GDPR.

It’s no longer a question of being less secure ‘in the cloud’; now it’s about whether customers have the time, energy and resources to do it themselves.

In 2018, I predict many more will turn to managed security service providers for multi-cloud security and compliance.

Blockchain moves beyond cryptocurrency

If you say “blockchain” to most people, they immediately think Bitcoin - and still have no idea what it is.

And while blockchain is the foundation for cryptocurrencies (digital assets that act as mediums of exchange using cryptography to secure transactions), it’s actually a much broader way to structure, store and secure data.

When used as a “distributed ledger,” blockchain consists of concatenated blocks of data or transactions across a network of computers with no central authority.

It allows the sharing of that distributed ledger across clouds and even across companies, without giving a single party the power to tamper with it - and that has powerful implications, if information about the provenance of goods, identity, credentials and digital rights can be securely stored and shared.

Locally, Webjet has built a blockchain proof-of-concept pilot to improve their hotel bookings success rate, yet other high profile blockchain projects are still rare.

Remember at the top when I referenced tuna from catch to can?

One of my favorite examples of a non-financial blockchain use comes from Provenance, a UK-based software company, which successfully piloted the use of blockchain and smart tagging to track tuna from catch to consumer, allowing for verifiable social sustainability claims, among other benefits.

So, while cryptocurrency isn't necessarily the future, it looks as though blockchain may be.

Article by John Engates, chief technology officer, Rackspace. 

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