Public Cloud as key enabler for innovation

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News

  • Already today, 19 percent of German companies are in active public cloud operation, 55 percent are preparing their deployment at full speed
  • Over two-thirds of companies plan to spend at least 10 to 20 percent of their annual infrastructure budget on public cloud issues by 2020
  • The public cloud market leaders AWS and Microsoft Azure share the majority of the current public cloud budget in German companies with 60 percent
  • 79 percent of companies make use of the services and know-how of external partners both in consulting and in operations

Nordcloud and the external IT research company Crisp Research have conducted a recent study to examine the strategies and mindset for public clouds in the German midmarket and to analyze the demands on managed public cloud providers. German companies are increasingly focusing on the public cloud and are dependent on the external expertise of IT service and consulting providers.

The study, which surveyed a total of 160 IT, digitization and business decision-makers, shows that the majority of German companies are already involved with the public cloud today. 19 percent are already actively using the public cloud in the form of Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), while a full 55 percent are in the implementation or active preparation phase. Half of the companies prefer a phased relocation of their application and infrastructure portfolios, 33 percent design the cloud migration “all in”, i.e. the entire application portfolio is planned as a large-scale transformation project.

 

Trend towards dual and multi vendor strategy

Since the functional scope, complexity and speed of innovation of public cloud platforms are now very high, more than half (53 percent) of the companies surveyed specifically rely on two strategic cloud providers. In addition, a total of 18 percent stated that they used more than two providers. As reasons for a dual or multi vendor strategy, 34 percent cited the minimization of the risk of a vendor lock-in as the reason, 41 percent also estimated the possibility of global coverage of the data center locations as enablers for international rollouts of their new digital services.

 

Investment in the public cloud on the rise

In addition, more than two-thirds (72 percent) of respondents said they would invest at least 10 to 20 percent of their infrastructure budget for IaaS and PaaS in the public cloud by 2020. Around a quarter (26 percent) even plan to shift between 20 and 50 percent of their infrastructure budget to public clouds. On average, 27 percent of the cloud budget is allocated to pure cloud operation. At 60 percent, the public cloud majors AWS and Microsoft Azure share the majority of the current public cloud budget for IaaS and PaaS in companies, although providers such as Google Cloud Platform, IBM and Alibaba also play an important role in German-speaking countries.

 

Managed Public Cloud Providers in Demand as Experts

Since both the transformation into the public cloud and the operation of these systems are in part highly complex, the vast majority of the companies surveyed (79 percent) rely on the support of external service providers. 52 percent said they worked with one, 19 percent with two managed public cloud providers. The external expertise is used in almost all areas, from the cloud strategy (64 percent), monitoring and management (54 percent) and the development of the API strategy (51 percent) to the development of DevOps operating concepts (51 percent). Managed Public Cloud Providers thus have a high strategic relevance.

“In order to remain competitive in times of digital transformation, companies should increasingly rely on cloud computing technologies,” comments Uli Baur, Country Manager Nordcloud DACH. “Our study results make it clear that more and more German companies are aware of this necessary step and are therefore already preparing the implementation and planning to use more resources for cloud operation and all associated processes in the future. Through partners like Nordcloud, the numerous changes can also be mastered by companies that themselves lack the necessary specialist staff and know-how.”

Download the Nordcloud study in German here

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General availability of VNet service endpoints for Azure SQL database

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Tech

This month, Microsoft announced the general availability of Virtual Network Service Endpoints for Azure SQL Database in all Azure regions.

What does this mean for our customers?

Previously, Azure customers were limited to accessing their PaaS SQL database instances via the public internet. Not only did this generate significant security concerns, but also meant that management overhead was tiresome, with each client needing to be added manually to the SQL server firewall for access.

These concerns have now been addressed with the general availability of VNet Service Endpoints for Azure SQL Database. Implementation of service endpoints allows for traffic from selected Virtual Networks and subnets to now traverse a secure traffic medium in the form of the Azure network backbone. By removing public Internet access to resources, and allowing only virtual network traffic, previous security and overhead concerns are now addressed. Further to this, using the Azure backbone also allows for more optimal routing of service traffic.

Although only a slight limitation, we did find that service endpoints cannot be used for traffic from on-premises to Azure services. This would have been particularly useful for customers who prefer to connect to the Azure SQL databases from their on-premises networks.

How much will this new feature cost me?

Nothing! There is no additional charge for using service endpoints.

How easy is this to implement? What happens to my existing firewall rules?

You can be up and running in a matter of minutes. Implementation is particularly straightforward with Microsoft providing detailed step-by-step instructions here and here.

Turning on the service endpoints will not override any existing firewall rules, and can be used concurrently. This is especially helpful in minimising disruption for customers moving away from manual firewall rules to service endpoints.

If you would like help implementing VNet Service Endpoints, please contact us here.

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“SAAS over PAAS over IAAS over my own data centre” – some thoughts

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Insights

This is a headline from a quote which came from my friend, a C-level executive in one of the biggest corporations in Finland. You might wonder why, as a representative of a company that doesn’t particularly preach cloud*, and doesn’t provide a full set of services for managing key SaaS components like ERPs or CRMs, I would bring up the topic.

Naturally, I want to talk about the role of custom-built software running on PaaS. I agree that when SaaS does the trick, you should choose it over a custom PaaS-application.

 

Let’s start with the easy part: Why is PaaS superior to IaaS?

There are a number of reasons:

  • Capacity is dirt cheap
  • Labour is expensive
  • Capacity is getting cheaper rapidly
  • Labour costs are increasing.

You should focus on saving labour, and this is fundamentally what using PaaS means. Your software development projects will ultimately end up costing less. Finding the cheapest possible capacity should save you a couple of hundred euros/pounds/dollars per month. On the other hand, finding the most efficient development platform saves you months in development costs and crucially, in time to market.

You might find this irrelevant if you want to use SaaS for everything, but unfortunately, you can’t. There might be a service for each of your needs, but how are you going to win overall in the marketplace?

Every company today runs their business processes digitally. When you use SaaS, you’re essentially using the process the vendor has defined, which in a lot of cases are world-class. Using these processes ensures you’re competitive, but by definition, they are not unique and you can’t build competitive advantage with them. When you look at your strategy and understand how are you going to be different from your competitors, you’ll understand when and where you’re going to need PaaS.

For me, this makes PaaS somewhat superior to SaaS. The things we develop run at the core of our customers’ strategy. We make a real impact. Ultimately, a partner such as Nordcloud will help you win.

 

There’s enough market demand with the believers to spend time on educating the non-believers (!)

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