The year of the cloud
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The year of the cloud

Protocol Enterprise

Welcome to Protocol Cloud, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This week: a look back at the stories that shaped the year in cloud computing, tarnish on the Golden State and the latest on the SolarWinds security nightmare.

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The Big Story

Gradually, then suddenly

For almost two decades, enterprise technology was building toward the moment realized fully this year.

The first name for this idea was "utility computing," the suggestion that obtaining computing power should be as easy as flipping a light switch and billed on a consumption basis. Utilities are neither exciting nor entrepreneurial, however, so that morphed into "cloud," a catch-all term for a utility-like pool of computing resources and managed software that lay beyond the walls of a given company's data center.

Within Silicon Valley, cloud computing is old news: It's been table stakes for years.

  • A generation of tech startups like Airbnb and DoorDash built their companies on AWS, giving rise to the joke that CEO Andy Jassy's biggest customers are actually Sand Hill Road venture capital firms.
  • Other tech companies quickly understood that cloud computing allowed them to actually move faster than companies stuck on old technology, especially as the smartphone became the most relevant computing platform.
  • In the years leading up to 2020, AWS capitalized on this momentum to become one of the largest enterprise tech companies in the world. Microsoft quickly reoriented its entire business around the cloud. Google finally started to take the enterprise seriously.

But in 2020, every company learned this lesson: The pandemic forced "two years of digital transformation in two months," Microsoft CEO Satya Nadella said in April.

  • As we explained in our Protocol Manual, The Retail Resurgence, the swift transition from an in-person economy to a digital economy forced many companies to stand up new services overnight, which is much easier to do with cloud tools.
  • No single company reflected this shift better than Zoom, which reported several quarters of more than 300% revenue growth this year as boring meetings conducted around conference room tables became boring meetings conducted in Gallery View.
  • Most businesses that transitioned were already aware that a shift to cloud software was in their future, but the pandemic forced them to accelerate that shift in order to stay afloat.

As the year mercifully winds to a close, it's possible to see light at the end of the very dark tunnel that was 2020. Yet it's also clear that the world will not revert back to the old way of doing things once a sufficient percentage of the world's population receives a COVID-19 vaccine.

  • A permanent shift only increases the stakes for the companies aiming to be the technology suppliers for the post-pandemic world, as seen most prominently in Salesforce's decision to spend $27 billion on Slack.
  • It suggests that the massive increase in digital commerce will generate a similar increase in the amount of data generated by the average company, which helps explain Snowflake's massive IPO and subsequent share-price gains.
  • And it's now-or-never for a generation of storied technology companies. That's perhaps best exemplified by IBM, which in 2020 named a new CEO, laid off thousands of workers, and saw its $34 billion hybrid-cloud strategy outflanked by the shift of cloud providers — even AWS — to hybrid tools.

It's hard to imagine how much more economic disruption the world would have seen if businesses had been forced to cope with widespread stay-at-home orders in, say, 2002. The cloud-based tools and services developed over the last two decades played a key role in the rapid overhaul of supply chains, business collaboration tools and even vaccine development, all of which prevented the most dire predictions of economic meltdown from this past spring ever coming to pass.

However, the fact that this amazing year for cloud computing was due to hundreds of thousands of needless deaths, and the yet unknown effects of the virus on millions more, should never be forgotten.


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SAP rising? SAP is definitely one of those "storied technology companies" referenced above that needs to adapt to the cloud era, and is showing signs it's settled on a path. Protocol's Joe Williams took a look at how the German database and ERP giant is retooling its strategy for the next decade of cloud growth.

California dreamin'? The Bay Area is a magical place with a lot of problems, some of which are now seen as too intractable to fix by a contingent of the tech elite. But some tech companies and leaders, perhaps encouraged by state officials, are doubling down on their commitment to the region, as Protocol's Biz Carson reports.

Haters hating? Salesforce took some flak in 2020 for urging companies to adopt a "no layoffs" policy in the early onset of the pandemic only to … lay off employees in August. Still, the company has been hiring aggressively in other areas and looks set to exit 2020 in strong shape, according to another report from Joe Williams.

Five Questions for...

Bassam Tabbara, CEO, Upbound

What was your first tech job?

I grew up in the Middle East and started my own software company when I was 14. I sold a program that removed rampant computer viruses. I stayed home from school for three months to get the company bootstrapped and write the software, then ran the company while at school.

What was the first computer that made you realize the power of computing and connectivity?

My first computer was a ZX Spectrum with 48K of memory. I learned the BASIC programming language while sitting on the floor of the living room and connected to the family TV. Later on I bought my first PC and I remember getting a 56K baud dial-up modem and learning about the power of being connected via Bulletin board systems.

What was the biggest reason for the success of cloud computing over the past decade?

Outsourcing infrastructure and data centers was not new, but making infrastructure (and later on, platform and software services) all accessible via an API is the reason cloud computing became the dominant IT paradigm.

What will be the biggest challenge for cloud computing over the coming decade?

We're now 15 years since AWS was first launched, and the promise of going "all in'' on a single cloud vendor has not played out as promised. Many organizations continue to manage multiple cloud environments as well as their own services and infrastructure on-premises. The biggest challenge going forward is in managing this complexity.

Will the pandemic usher in a new era of remote working, or will we all come back together when it is safe to do so?

The pandemic is giving companies the opportunity to rethink what's best for them rather than continuing on with the status quo. At Upbound, we invested early in a healthy remote work culture pre-pandemic, but that pandemic is causing us to accelerate our investment.

Around the Cloud

  • SmugMug moved more of its cloud instances off x86 processors on to AWS's Graviton2 processors, which generates "~40% [cost] savings every time we flip the switch," CEO Don MacAskill said.
  • Google Cloud hired another security-oriented executive, tapping Cisco's Jeff Reed as the new vice president of product for Anthos, its managed multicloud service.
  • Google also raised a few eyebrows by opening a cloud region in Saudi Arabia to service the nation's state oil company, Aramco. The deal will not include AI services or work on oil extraction, in keeping with a pledge released last year to avoid such work in line with employee demands.
  • This month's open-source drama over CentOS appears to be headed toward a resolution after CloudLinux agreed to invest over $1 million in a project to duplicate the open-source version of Red Hat Enterprise Linux.
  • Alibaba said it was "dismayed"that it had tested cloud algorithms for identifying ethnic minorities, as China continues to detain massive numbers of the Uighur population in its Xinjiang region.
  • IBM picked up a hybrid-cloud consulting firm based in Finland, adding Nordcloud to its assets as cloud growth in Europe continues apace.
  • Cloudflare also made a late-year acquisition, buying Linc and its app-development platform as the company continues to expand beyond its security and DDoS-defense roots.
  • One of the best selling points for cloud computing is that data can be stored and accessed wherever it is convenient. But data residency policies on the rise around the world could make cloud administration on a global scale much trickier.
  • And, believe it or not, SolarWinds was warnedof shoddy internal security policies years before its software was used in a brazen intrusion into federal government agency networks, although it still took an extremely sophisticated attack on its systems to break through.

Thanks for reading — have a great week.

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