July 8, 2022
Hello and welcome to Protocol Enterprise! Today: Microsoft’s move to reverse a welcomed decision on macros in Office has security professionals perplexed, why synthetic data isn’t ready for prime time and the latest data on cloud infrastructure spending.
Microsoft has begun undoing one of its biggest recent moves for improving the cybersecurity of its products and customers — though the company promises that it's only "temporary."
Visual Basic for Applications (VBA) macros in Microsoft Office applications have been exploited by cyberattackers to deliver malware for decades. In February, a measure to block those macros by default was widely applauded by security professionals.
Microsoft said that “following user feedback, we have rolled back this change temporarily while we make some additional changes to enhance usability,” according to a statement posted as an update to a previous blog post.
Still, questions remain as to why Microsoft chose not to communicate the rollback prior to doing it.
"Looks like Microsoft has blessed us all with more job security," security researcher Marcus Hutchins said on Twitter in response to the rollback.
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Synthetic data suppliers promise that the fake data they provide can reduce AI data privacy and bias concerns. But after testing synthetic data as a replacement for real images, Sony’s AI team isn’t convinced it’s ready for prime time.
“Based on our preliminary research, we have a lot of concerns about that direction, because the current state of synthetic data is not necessarily sufficient and can create additional fairness issues,” said Alice Xiang, senior research scientist at Sony AI and head of Sony Group’s AI Ethics Office in an interview this week.
Synthetic data companies including Datagen, Mindtech and Synthesis AI produce synthetic data used by big tech giants, automakers, gaming companies and mobile phone makers to build software, features in apps or systems used in vehicles.
But because synthetic data may rely on just a few original real images, it might not produce genuinely diverse fake data sets, Xiang said: “A lot of the synthetic images are basically extrapolations of a relatively small number of people. So even if a vendor says that they supposedly are globally diverse, maybe they only have scans of one person representing a billion people.”
Xiang said computer vision scientists should temper their excitement about synthetic data. “People will feel comfortable that they've resolved all of the privacy issues associated with real data, but they might create new issues around the fairness front by going straight to synthetic.”
Some interesting data points about cloud infrastructure spending and how data centers are being funded have emerged from new reports from IDC and Synergy Research Group.
IDC expects cloud infrastructure spending on compute and storage products to increase 22% to $90.2 billion this year from 2021 — the highest annual growth rate since 2018 — while non-cloud infrastructure spending is forecast to grow only 1.8% to $60.7 billion. But it’s not all good news: The growth will be fueled in part by inflationary pressure, expected higher prices for systems and second-half supply chain improvements, according to IDC.
Spending on shared cloud infrastructure, which includes public cloud services, jumped 15.7% year over year to $12.5 billion in the first quarter, and IDC forecasts that it will eclipse non-cloud infrastructure spending this year for the first time. Spending on dedicated cloud infrastructure rose 20.5% year over year to $5.9 billion, of which 47.8% was deployed on premises, according to IDC’s report.
Turning to data centers, private equity has been a driving force behind an increase in mergers and acquisitions (M&A) this year that likely will match 2021’s record-breaking 209 deals valued at more than $48 billion in aggregate, a 41% year-over-year increase, according to Synergy.
Eighty-seven data center-related M&A deals with a combined value of $24 billion closed in the first half of the year, and the bulk of another $18 billion in already-agreed-upon pipeline deals is expected to close by year’s end.
Private equity buyers are playing a much bigger role. Private equity accounted for 42% of the total M&A deal value from 2015 to 2018 and 65% from 2019 to 2021, but its share ballooned to more than 90% in the first half of this year.
“There is an ever-increasing demand for data center capacity, driven by rapidly growing cloud markets, aggressive expansion of hyperscale operator networks and continued growth of data-rich digital services,” John Dinsdale, Synergy’s chief analyst, said in a statement. “The trouble is that building and operating large fleets of data centers is highly capital-intensive. Even the biggest data center operators have had to seek external funding to allow them to meet growth targets while protecting their balance sheets. As the level of resulting M&A activity has shot through the roof, virtually all of the incremental investment has come from private equity.”
Rogers, Canada’s largest internet service provider, acknowledged a widespread outage Friday that took down banking and other key services for an extended period of time.
Tata Consultancy Services missed expectations for profit, sparking concern that enterprise technology spending could start to fall amid the threat of a recession.
Coupa gave employees an out-of-cycle pay raise as it copes with the fallout from the plunge in SaaS stocks this year, Protocol reported.
Oracle Chief Marketing Officer Ariel Kelman, a former AWS executive hired two years ago to lift Oracle’s fledgling cloud infrastructure business, is leaving the company, according to the Information.
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Thanks for reading — see you Monday!