AWS Success Underscores Demand for Cloud Services

Despite several highly publicized cloud hacks last year — including the iCloud and Sony breaches — the demand for cloud services is skyrocketing.

Amazon Web Services grabbed 30 percent of the global cloud infrastructure service market in Q4, Synergy Research reports. It grew 51 percent year over year (YoY).

Microsoft achieved YoY revenue growth in Q4 of 96 percent; followed by Google with 81 percent, IBM with 48 percent and Salesforce.com with 37 percent.

For the whole of 2014, Amazon had a 28 percent share of the market. Microsoft had 10 percent, IBM 7 percent, Google 5 percent and Salesforce 4 percent.

Total revenues for cloud infrastructure services in 2014 grew 48 percent YoY.

Quarterly cloud infrastructure service revenues, including infrastructure as a service, platform as a service; and private and hybrid clouds, are close to US$5 billion, Synergy said. Trailing 12-month revenues exceed $16 billion.

What’s Behind the Frenzy

Why the mad rush to the cloud? Isn’t security an issue any more? And who’s buying into the cloud? Large corporations? SMBs?

“We saw strong growth initially from the small guys, but a lot of security concepts have really gone by the bye now, and so the growth comes right across the spectrum,” John Dinsdale, Synergy Research Group managing director and chief analyst, told the E-Commerce Times.

We are “in the early stages of cloud deployment, so organizations see it as a tremendous cost saver and are moving some of the non-critical applications to the cloud, where security is not a major concern, and that’s causing tremendous growth for cloud services and platforms,” remarked Jagdish Rebello, senior manager for cloud and computer electronics at IHS.

The term “cloud computing” appears to have been coined in 2006 by Eric Schmidt, then chairman and CEO of Google. Given that high-tech years are like dog’s years — they have a 7-to-1 ratio to calendar years — isn’t that long enough for the cloud to have at least attained its majority?

“The infrastructure has now been well established, and now you’re getting platform as a service and you’re seeing vendors looking at this as a long-term revenue stream,” Rebello explained.

The vendors “are seeing the cloud as the opportunity for the future and are looking at revenue models and thinking of offering a subscription-based service to reduce clients’ CAPEX,” Rebello elaborated. “Microsoft’s doing that, Oracle’s trying to do that, Google’s doing that, and Salesforce.com is seeing explosive growth.”

What About Security Then?

The Sony cloud has been hacked numerous times since 2011, and Apple took a hit when hackers published celebrities’ photos on the Web and posted the exploit on github.

Apple blamed the victims, sparking outrage, and finally patched the flaw.

“Security is the biggest concern everybody has with regard to the cloud,” Rebello told the E-Commerce Times.

However, “at the AWS summit in San Francisco, the guy who’s essentially the CTO for the CIA talked about why they used the cloud and what advantage that has for him,” Dinsdale pointed out. “That tells you an awful lot about how secure the cloud is.”

Self-Defense in the Cloud

The cloud is “more secure than on-premise solutions” in many cases, Chris Westphal, senior manager, product marketing of Adallom, told the E-Commerce Times. Providers such as Amazon, Microsoft and Google “spend a lot of time and effort ensuring their services have robust security in place.”

Nevertheless, customers “need to understand the shared security model and their role in protecting their data in those services,” Westphal cautioned.

The provider is responsible for protecting the platform, but the customer has to ensure that the right policies and mechanisms are in place to protect data and usage, Westphal pointed out. “It’s critical to invest in the appropriate tools that give you visibility and control that you need across the service you use.

Breaches like those at Sony show that attacks are boundless, meaning they move easily between on-premise and cloud-base systems, Westphal said. Traditional security solutions that stop at the enterprise perimeter “are no longer sufficient to protect against these types of attacks.”