Nvidia’s slow and steady march into the cloud

The Big Story

From PC games to AI dreams. Then what?

Nvidia is not a household name among the general public, unless you grew up blasting aliens in first-person shooter PC games. And while that might still be true, the graphics chipmaker is on the cusp of overtaking one of the biggest household names in the history of technology thanks to years of investment in the services that enterprise computing buyers need right now.

Nvidia is nearing Intel in terms of market valuation after a 70% surge in its share price this year, as of the close of the stock market Tuesday. That's a stunning reversal of fortune to anyone who has been following the chip market in the 21st century. The shift was made possible by Nvidia's prescient decision to design and market its graphics chips for cloud-based artificial intelligence applications right as demand for those services soared and cloud makers needed help kitting out their data centers.

• Nvidia also announced a new deal with Google Cloud on Tuesday, making its newest Ampere graphics chips available to select customers.
• AWS and Microsoft have announced plans to use those chips, which means just about every cloud customer in the U.S. will soon have access to Nvidia's technology.
• Google is eager to offer Nvidia's chips despite spending millions of dollars on designing its own AI chips because the demand is clearly there, and cloud customers like choices.

Preference for choice on the cloud is a big problem for Intel, which dominates the market for server processors inside cloud data centers, but is struggling to enter new territory.

• Benchmarks can be unreliable in the real world, but it's clear that the performance offered by AWS' second-generation Graviton server processors, which use core technology designed by Intel rival Arm, is impressive.
• Intel has tried and failed to duplicate Nvidia's success in artificial intelligence applications with a series of expensive AI chip maker acquisitions, spending around $400 million on Nervana in 2016 only to spend $2 billion on Habana in late 2019 and drop its Nervana work.
• And longtime Intel rival AMD also has an impressive server processor that is challenging Intel's supremacy for the first time in years.

This is all another sign of how quickly cloud computing has overturned the old order of IT, and why companies that look at this market with fresh eyes are the ones who are finding success as the cloud matures.

• Nvidia's cloud success didn't come overnight: Over a decade ago it realized that its technology could be used in an entirely new way, and steadily laid the groundwork until the market caught up.
• As we enter a new era for cloud computing, one in which the sector is no longer the underdog, other companies will look for similar opportunities to take on the establishment.
• Companies like AWS and Microsoft need to be very careful about how they balance the need for new ideas against the need to service existing customers, a balance that lots of companies have failed to achieve in the past.

And the same warning extends to Nvidia: Artificial intelligence still has huge growth potential for cloud providers and customers, but more and more companies are starting to wonder how much AI they actually need, especially considering the cost of developing top-tier AI systems. So where will we find the next Nvidia?

• Serverless computing has enormous potential to simplify software development, and the tools required to make it work for mainstream users at scale are still developing.
• Edge computing will create new opportunities for hardware and networking companies, given the unique requirements of placing computers in far-flung, sometimes dangerous areas.
• And as the pandemic stretches on, at least in this country, new tools that reimagine remote work could make our current tools look like Lotus Notes.

This Week In Protocol

On your mark: Google is rolling out a very interesting open source idea Wednesday, pledging to transfer trademarks associated with Istio and two other key projects to a new organization that will develop guidelines around their usage by other companies or organizations. It's a move that's unlikely to mollify critics who are concerned that Google is taking advantage of open-source labor without sharing power. But as the new group said, it's "something wildly new in open source."

The doctor is in: Health care couldn't be more top of mind this year, and Protocol took a comprehensive look at the state of modern health care and the technology that's trying to make it better. It's not a stretch to say this might be the most crucial six-month period in the history of the U.S. health care system, and whatever the result, things will almost certainly look different on the other side.

Alexa, where's my beer: The extended work-from-home period has been a boon for the smart speaker and smart display business, often powered by voice commands. As speaker companies and software vendors learn more about how people are using these devices at home during the pandemic, we might start to see more of these speakers linked to professional accounts and enterprise software packages to make working from home just a little easier.

A MESSAGE FROM PALO ALTO NETWORKS

The First Annual State of Cloud Native Security Report

Palo Alto Networks has sponsored the largest industry survey ever conducted around cloud native security. The State of Cloud Native Security 2020 Report showcases the practices, tools and technologies innovative companies are using to overcome the challenges of cloud native architecture, along with methodologies to fully realize the benefits of moving to the cloud. Based on responses from 3,000 cloud architecture, InfoSec and DevOps professionals across five countries, the report provides detailed information from a proprietary data set to help you make informed decisions about the cloud.

Get your copy today.

5 Questions For...

Frederic Kerrest, co-founder, executive vice chairman, and chief operating officer, Okta

What was your first tech job?

I had a few three- to six-month software internships while getting my bachelor's degree: WebTV Networks, Applied Materials and Sun Microsystems. My first full-time job was as a software developer at Moai Technologies in 1999!

What's the best piece of advice you could give to someone starting their first tech job?

No matter what you think your career path might look like, a background in sales is highly beneficial. It teaches people what keeps revenue coming in, how to develop a strong sense of empathy for peers, and why communicating by listening rather than talking is critical. Sales provides a crash course in how the business works, which can benefit any role you might hold in the future — from product development and operations to hiring and customer success.

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

Organizations large and small have grown more comfortable with the security and reliability of the cloud, and they've recognized that in a world dominated by remote access and mobile adoption, it's really the best way to stay agile and efficient. Cloud has also lowered the barrier to entry for resources like infrastructure, so startups and even large organizations can quickly spin up the compute they need to build new and innovative products for users to access from anywhere.

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

Some of the characteristics that make cloud applications so effective — no installation, access from anywhere — also mean that without security designed specifically for the cloud, these cloud apps can be vulnerable. The biggest challenges for cloud computing will be protecting against growing threats, and for some companies this protection will come down to survivability in the face of increasingly sophisticated methods of hacking. Security challenges can be particularly daunting for companies operating in a hybrid environment with applications both on-prem and in the cloud.

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 shift we've seen to remote work isn't a temporary one. At Okta, our employees have told us they are just as productive working from home as they are in the office, and 80% say they want more work-from-home flexibility than they had before the pandemic. As business leaders, our goal should be to make employees happy, productive and safe — not to return to an old way of working as a sign of normalcy.

Around The Cloud

• Zoom announced a new hardware service Tuesday in partnership with four speaker companies and ServiceNow, and there's a joke about a spy chip in here somewhere.
• Security engineers scrambled over the holiday weekend to fix a nasty flaw in F5's hardware load balancers that could allow remote access to corporate networks, although Wired reported that it might only affect a small subset of devices.
• Don't miss this profile of Troy Hunt by Techcrunch's Zack Whittaker. Hunt is the creator of what unfortunately is an essential service in the 21st century: Have I Been Pwned.
• New Relic has struggled to keep up with the changes wrought by the cloud, and it appears the internal yelling will not stop until morale improves.
• IBM would love to become relevant again in the cloud era, and it's hoping a focus on edge computing through a newly released open-source project might help.
• This sounds like a tough job: Salesforce has hired Darryn Dieken to be its first "chief availability officer," a senior executive responsible for making sure Salesforce services stay up — and sure to be the first one to get pinged when they don't.
• We all cringed at the aging technology on which a lot of core systems still run during the early days of the pandemic. But this essay from Marianne Belotti points out that technical debt doesn't have to be super old to be a problem.
• Smaller funding rounds don't usually make Protocol Cloud, but Vendia's $5.1 million seed round is notable for two big reasons: Shruthi Rao, who ran AWS's blockchain efforts, and Tim Wagner, who invented AWS's serverless computing strategy with Lambda, are the cofounders of the company.
• Everyone's favorite App Store gadfly next-gen email service, Hey, was built for scale using AWS and Kubernetes, and Basecamp's Blake Stoddard explains how it was done.
• Google Cloud announced a 10-year partnership with Deutsche Bank, Donald Trump's lender of last resort, which also agreed this week to pay $150 million to settle allegations it ran interference for Jeffery Epstein. The Google deal will see it provide the bank with cloud computing and other services.

A MESSAGE FROM PALO ALTO NETWORKS

The First Annual State of Cloud Native Security Report

Palo Alto Networks has sponsored the largest industry survey ever conducted around cloud native security. The State of Cloud Native Security 2020 Report showcases the practices, tools and technologies innovative companies are using to overcome the challenges of cloud native architecture, along with methodologies to fully realize the benefits of moving to the cloud. Based on responses from 3,000 cloud architecture, InfoSec and DevOps professionals across five countries, the report provides detailed information from a proprietary data set to help you make informed decisions about the cloud.

Get your copy today.