JEDI Clouds

Happy Monday.

China’s Great Firewall may soon evolve into the Great Cyberborder.

The FT has reported that Beijing has ordered all government institutions and public bodies to get rid of their foreign computer gear, and transition off American hardware/software by 2022 in favor of local alternatives.

On the domestic IT front, Amazon has made a new filing claiming that it didn’t win the $10B JEDI Department of Defense (DoD) contract as a result of repeated public and private attacks against Amazon and CEO Jeff Bezos, including by President Trump.

According to a report from CNBC, the company argued that the president “made no secret of his personal dislike” for Bezos by criticizing him publicly and then “used his office” to prevent AWS from winning the contract.

Amazon is calling for DoD to terminate the award and conduct another review.

Funding Monday: Education software company Instructure is being acquired for $2B by private equity firm Thoma Bravo. Pharma clinical trial SaaS firm Suvoda has raised a $40M round.

And if you’re looking to gift yourself a new Mac Pro (made right here in Austin, Texas!), you’d better let Santa know and soon: Apple has indicated the updated models will start at $5,999 (the company will start taking orders tomorrow).

Tiger’s Roar

I’m back! I had to take a little time off to chase a little white ball and disconnect from these amped up Interwebs for a bit. 

So what caught my eye on the return trip to the office? First, Apple’s new fancy AirPods that have active noise cancellation and are water resistance, and cost $249.

You won’t catch me dissin’ AirPods, or their price. My NPS for these things would be off the charts, and I highly recommend them to anyone who asks. So, yeah, I’d give the Pro versions a spin if I lost one of my 1st gens (which was a fear that, knock on wood, has so far never come true).

Next: Microsoft winning the JEDI cloud contract with Uncle Sam. Be interesting to read former SecDef Jim Mattis’ book which claims that Trump directed him to “screw Amazon” out of winning the contract. No Amazon Drone deliveries at the White House anytime soon!

But Amazon IS upping their grocery game, making grocery deliveries free in ~2,000 cities for all Prime members and removing the $14.99/month Amazon Fresh fee.

And speaking of golf, Tiger Woods tied Sam Snead’s record with 82 PGA Tour victories, this at last week’s Zozo Championship in Japan. Congrats, can’t wait to see you win # 83!

Nvidia’s New Chips

Nvidia announced its largest-ever acquisition today, offering $6.9 billion for data center chip technology maker, Mellanox.

Bloomberg is reporting that Mellanox beat out rivals that included Intel in a bidding process for the American-Israeli company, one which its founder, Jensen Huang, built in under three years by “persuading owners of data centers that his graphics chips are the right solution for processing the increasingly large amounts o information needed for artificial intelligence work, such as image recognition.”

The growing reams of data generated means work on AI and large databases needs to be split between multiple computers. Simply using a faster processor isn’t enough, Huang said. To deal with this, data centers in future will be built as though they are single giant computers “with tens of thousands of compute nodes,” requiring inter-connections that let them work in parallel. Nvidia will use its newly acquired technology to make those giant warehouses full of machinery more efficient and effective, he said.

The deal may signal a resumption of consolidation in the $470 billion semiconductor industry, which has been reshaped over the past five years as companies combined to gain scale while battling rising costs and shrinking customer lists.

The deal will require regulatory approval.

ZDNet’s take: 

Nvidia’s purchase of Mellanox for $6.9 billion will translate into a broader data center play for beyond the graphics and high performance computing markets.

• Nvidia’s rivalry with Intel hits a new stage.
• Nvidia gets more revenue diversification and data center sales.
• Mellanox gives Nvidia more entries into high performance computing and the data center.
• As artificial intelligence workloads become the norm, Nvidia with Mellanox be more an architecture play.

And SiliconANGLE spoke with analyst Patrick Moorhead about the deal:

“Both Nvidia and Mellanox are big in the high performance computing, machine learning, automotive, public cloud and enterprise data center markets, and could bring even more value to customers when [their technologies are] combined.”

“Scale and diversification is everything in the chip business, and Nvidia gets both with this acquisition,” added Holger Mueller, principal analyst and vice president of Constellation Research Inc. “It allows the company to scale and diversify from its existing graphics, gaming and AI use cases. Getting in the data center is vital with the overall move to the public cloud, so if this goes through, it means Nvidia will become more relevant for both executives and developers alike.”

The financial spin: Nvidia is paying a 15% premium to Mellanox’s Friday closing level, and indicated the purchase would be immediately accretive to earnings, margins and cash flows.

Clouds and Coins

Couple of interesting acquisitions on this rainy Austin Tuesday.

Cryptocurrency firm Coinbase is looking to add more cryptocurrencies to its exchange through its acquisition of blockchain intelligence startup, Neutrino.

Terms of the deal were not disclosed, but here’s the skinny on Neutrino according to a story from TechCrunch:

Based in Italy, Neutrino helps map blockchain networks, and in particular crypto token transactions, to pull in information and insight. With the rise of thefts, that includes a major focus on services for law enforcement agencies to track stolen digital assets while it also includes tracking ransomware and analyzing ‘darknets.’ Other solutions include tracking services for investment and finance companies to help find rising tokens and assets, an area Coinbase could clearly capitalize on as it goes after security token offerings.

Coinbase engineering director Varun Srinivasan wrote in a blog post that “By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors.” 

So, the picks, shovels, and locks plays continue to abound in the blockchain realm.

And the other big deal today, Google announced it was acquiring cloud start-up Alooma.

Alooma helps companies migrate their data from multiple sources to one data warehouse.

Terms also not disclosed, but a CNBC report cited Crunchbase when indicating Alooma had raised $15M from multiple investors.

From Google’s blog post on the announcement:

Leading companies across every industry and around the world are moving to the cloud to be more agile, secure and scalable. As organizations modernize their infrastructure to digitally transform themselves, migrating mission critical systems and the data that powers their business success can be daunting. No matter where your data is stored—on premises, in our cloud, or multiple clouds—we want to make that information accessible, valuable, and actionable.

That’s why today we’re announcing our intent to acquire Alooma, a leader in data migration. Alooma helps enterprise companies streamline database migration in the cloud with an innovative data pipeline tool that enables them to move their data from multiple sources to a single data warehouse.

IBM to Acquire Red Hat

IBM and Red Hat have announced they have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.

More simply put, IBM is acquiring Red Hat.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. “IBM will become the world’s #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.

“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” she said. “The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”

This acquisition brings together the best-in-class hybrid cloud providers and will enable companies to securely move all business applications to the cloud. Companies today are already using multiple clouds.

However, research shows that 80 percent of business workloads have yet to move to the cloud, held back by the proprietary nature of today’s cloud market. This prevents portability of data and applications across multiple clouds, data security in a multi-cloud environment and consistent cloud management.

“Open source is the default choice for modern IT solutions, and I’m incredibly proud of the role Red Hat has played in making that a reality in the enterprise,” said Jim Whitehurst, President and CEO, Red Hat. “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience –  all while preserving our unique culture and unwavering commitment to open source innovation.”

BM and Red Hat will be strongly positioned to address this issue and accelerate hybrid multi-cloud adoption. Together, they will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management.

In doing so, they will draw on their shared leadership in key technologies, such as Linux, containers, Kubernetes, multi-cloud management, and cloud management and automation. 

IBM’s and Red Hat’s partnership has spanned 20 years, with IBM serving as an early supporter of Linux, collaborating with Red Hat to help develop and grow enterprise-grade Linux and more recently to bring enterprise Kubernetes and hybrid cloud solutions to customers.

These innovations have become core technologies within IBM’s $19 billion hybrid cloud business. Between them, IBM and Red Hat have contributed more to the open source community than any other organization.

With this acquisition, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem. In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network.

IBM and Red Hat also will continue to build and enhance Red Hat partnerships, including those with major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and more, in addition to the IBM Cloud. At the same time, Red Hat will benefit from IBM’s hybrid cloud and enterprise IT scale in helping expand their open source technology portfolio to businesses globally.

Cloud Revs Up

Cloud revenues have grown 51 percent over the past year to nearly $15 billion, according to new research by Synergy Research Group.

As reported in The Wall Street Journal, that number outpaces full-year revenue growth of 44 percent in 2017, and 50 percent in 2016.

The results are based on an analysis of quarterly earnings reported by Amazon, Microsoft, Alphabet, IBM, and Alibaba in recent weeks.

The analysis includes reported revenue data from Infrastructure-as-a-Service, Platform-as-a-Service and hosted private cloud services.

It shows AWS, Amazon’s cloud unit, extending a 12-quarter lead in the cloud-services market, with a 33% share of the global market. Amazon was among the first tech firms to rent computer power and storage, launching AWS over a decade ago.

Currently its closest rival is Microsoft, with 13% market share, followed by IBM at 8%, Google at 6% and Alibaba at 4%, according to Synergy.

Also:

Gains among big cloud vendors have mostly come at the expense of small-to-medium sized operators, who are being outspent by the bigger providers and have seen their market shares diminish, Synergy said.

IT Spending: Steady in the Clouds

Let’s get the most important stuff out of the way first. 

Tiger tees off in the first round of this year’s Masters at 10:42, grouped with Australia’s Marc Leishman and England’s Tommy Fleetwood.

You can feel the Augusta Tiger buzz all over the world (okay, the golf world, anyway).

But enough golf, let’s talk IT spending.

Today’s Wall Street Journal “Morning Download” email had this headline: “IT Spending Outlook is Steady Despite Volatile Days in Tech.”

Volatile? Amazon has lost more than $50 billion of market value in the last week, Facebook somewhere north of that.

But despite that, the talk of trade tariffs and regulation, the Journal reports that “the outlook for spending on information technology appears steady.”

The estimate was based on a survey of 75 U.S. and 25 European CIOs at companies in a range of industries conducted by Morgan Stanley (and most of the firms with more than $1 billion in annual revenue.)

What’s driving the increase? First, the cloud.

The report “found that IT budgets at these firms are set to increase 5.4%, slightly up from 5.2% last year, and that “budget gains are being driven by ongoing growth in cloud computing.” It suggested that 25% of total application workloads will be running in the cloud by the end of the year (up from 20% today).

Cloud was one priority spending area, and security software was cited as another.

Fifty-nine percent indicated they “do not expect changes in tax rates, appreciated depreciation, and cash repatriation” to impact their 2018 IT spending plans, and 29% indicated the tax changes would likely put upward pressure on spending.

A Gartner forecast from earlier this year had projected estimates of IT spend to reach $3.7 trillion in 2018, a YOY increase of 4.5%.

Fusion Genomics Using IBM Cloud To Support Advances Against Global Pandemics

IBM today announced that Vancouver-based company Fusion Genomics selected IBM’s cloud capabilities to help advance Fusion’s ability to detect pandemics before they happen.

Fusion Genomics has developed disruptive DNA and RNA technology that it believes can positively identify infectious diseases and enhance the surveillance of emerging pathogens like MERS, SARS, avian flu, and swine flu.

Vancouver-based company Fusion Genomics selected IBM’s cloud capabilities to help advance Fusion’s ability to detect pandemics before they happen. Fusion Genomics has developed disruptive DNA and RNA technology that it believes can positively identify infectious diseases and enhance the surveillance of emerging pathogens like MERS, SARS, avian flu, and swine flu. (Credit: IBM)

According to Fusion, Fusion Genomics’ technology when employed for pre-emergence surveillance can help proactively identify threats, like swine flu, by taking aerosol samples in high risk areas, then analyze the sample to determine if there is potential to affect humans.

If there is a risk, Fusion Genomics can help groups like governments and hospitals make rapid and informed decisions for the health and safety of those that rely on them before an outbreak occurs.

Requiring a cloud platform tuned for machine learning workloads, which also provides secure infrastructure capable of hosting sensitive genomic data, Fusion Genomics determined that the IBM Cloud was the ideal solution.

The global infrastructure footprint of the IBM Cloud helps Fusion Genomics create a more coordinated and efficient delivery system that can scale up or down as needed. In addition, IBM Cloud positioned the company to analyze genomic data in minutes.

The IBM Cloud enables Fusion Genomics’ system to gather and process four core elements in unison:

• Beginning with testing, the sample genome is captured and DNA sequenced.
• Fusion Genomics’ machine learning algorithms then analyze the genomic data to identify the presence of a pathogen, including any forms that could cause public harm.  
• Once identified, physicians using Fusion Genomics’ technology can provide appropriate therapeutics; thus, treatment can be determined while tracking the transmission dynamics of the pathogen.
• Since the system is delivered via the IBM Cloud, Fusion Genomics can easily run analytics and share information across boundaries.

“With a quickly growing global population, potential outbreaks of infectious diseases pose an increasingly pressing threat to our public health”, said Mohammad Qadir, CEO of Fusion Genomics.  “We chose IBM over other cloud providers because of its ability to quickly scale up or down while ensuring that sensitive data is protected with one of the most secure clouds available. This accelerates our capacity to react to infectious diseases that can pose dangerous threats to both the economy and human life.”

Organizations around the world are working with Fusion Genomics to access their DNA and RNA technology system built on IBM Cloud, including government agencies in both Canada and the European Union. 

For more information about IBM Cloud, please visit https://www.ibm.com/cloud-computing/.

A Deal to Boost Mobile App Speeds

ZDNet is reporting that web performance and security provider Cloudflare has acquired Neumob, a mobile accelerator for apps.

They report that Neumob will allow the company to provide improved end-to-end optimization across desktop and mobile, with no disruptions or speed loss based on the device used.

VentureBeat wrote of the deal:

Neumob’s technology is designed to replace traditional internet protocols that weren’t necessarily designed with the issues of wireless networks in mind, Cloudflare CEO Matthew Prince told VentureBeat. He said that TCP, one of the core protocols behind the internet, assumes that packet loss means there’s a router in a wired network being overwhelmed somewhere and backs off of transmitting data. “[That] makes a ton of sense on a wired network, but on a mobile network, when you start to see packet loss, that could just mean someone turned on the microwave or you’re driving through a tunnel, there are solar flares, or any number of things that the right reaction isn’t to back off,” Prince said. Neumob built a new set of capabilities that are designed to do away with issues like that. The technology is able to make applications load up to 3 times faster and reduce app errors and timeouts by up to 90 percent.
– via VentureBeat

Army Re-Ups with IBM for $135 Million in Cloud Services

IBM announced today that the U.S. Army’s Logistics Support Activity (LOGSA) awarded IBM a contract to continue providing cloud services, software development and cognitive computing, constituting the technical infrastructure for one of the U.S. federal government’s biggest logistics systems.

The 33-month, $135 million contract represents a successful re-compete of work that LOGSA signed with IBM in September 2012. Under that managed services agreement, the Army pays only for cloud services that it actually consumes.

The efficiencies created by this arrangement have enabled the Army to avoid about $15 million per year in operational costs – a significant yield for the Army and taxpayers.

In addition to continuing to provide managed services as part of this new contract, IBM also will help the Army focus on:

improving cybersecurity by applying the risk management framework (RMF) security controls to LOGSA’s IT enterprise. RMF is the unified information security framework for the entire U.S. federal government; it replaces legacy IT security standards; incorporating cognitive computing that enhances readiness by anticipating needs, and speeding application modernization. As part of this new contract, IBM also will help the Army predict vehicle maintenance failures from more than 5 billion data points of on-board sensors that will be stored within this environment.

In addition, the Army is adopting Watson IoT services and a new Watson IoT Equipment Advisor solution that analyzes unstructured, structured and sensor data directly from military assets.

The solution, part of the IBM Watson IoT for Manufacturing and Industrial Products product suite, includes IBM Predictive Maintenance and Quality System, an integrated solution that monitors, analyzes, and reports on information gathered from devices and equipment and recommends maintenance procedures.

It also includes Watson Explorer, a cognitive exploration and content analysis platform that enables users to securely capture and analyze both structured and unstructured data. With the platform, the Army will look to extract enhanced insights from its vehicle data and recommend optimal repair methods and procedures. By combining tactical vehicle sensor and maintenance data, the Army better understands the health of its vehicles and can take proactive repair measures.

IBM recently completed a proof of concept that demonstrated the effectiveness of Watson cognitive computing for 10 percent of the Army’s Stryker vehicle fleet. Under this new contract, LOGSA will increase its ability to provide that predictive and prescriptive maintenance information to the Army.

In addition to private cloud deployments, IBM manages five dedicated federal cloud data centers, including a cloud environment accredited up to impact* level 5 (IL-5). These were built to meet Federal Risk and Authorization Management Program (FedRAMP) and Federal Information Security Management Act (FISMA) requirements for government workloads.