The 10 Biggest Cloud News Stories Of 2019 (So Far)

The cloud computing world was rocked by blockbuster acquisitions, high-profile executive shuffles and groundbreaking partnerships.

The Biggest Headlines In Cloud

The reinvigoration of Google Cloud under new CEO Thomas Kurian, IBM’s closure of its $34 billion blockbuster deal to buy Red Hat and Dell Technologies’ hybrid cloud push were among the top news stories rocking the cloud computing world so far this year.

The power of the federal government in shaping the cloud market loomed large with news of potential antitrust probes of Amazon Web Services’ (AWS) and Google Cloud’s parent companies, and the U.S. Department of Defense’s shortlisting of AWS and Microsoft Azure as frontrunners for its estimated 10-year, $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud transformation contract.

Click through to relive 10 of the top cloud news stories for 2019.

10. Snowflake On Google Cloud

Snowflake in June announced a strategic partnership for the startup to offer its cloud-based data warehousing services on Google Cloud.

Snowflake on Google Cloud is scheduled to launch in preview this fall, with general availability targeted for early next year.

“Enterprises are undergoing digital transformations, and increasingly their data is informing these shifts,” Google Cloud CEO Thomas Kurian said. “Enterprises will soon be able to use Snowflake alongside Google Cloud’s comprehensive set of advanced analytics and machine learning solutions.”

A unicorn company, the San Mateo, Calif.-based Snowflake has raised $928.9 million, according to Crunchbase, and was valued at $3.5 billion prior to a $450 million growth funding round last fall. It got a new CEO in May when Frank Slootman, former CEO of software-as-a-service provider ServiceNow, replaced Bob Muglia, who had led the company for five years.

With the Google launch, Snowflake will have technology partnerships with all three of the top public cloud providers. The company has supported Microsoft Azure since last July and has offered Snowflake on Amazon Web Services since 2015. Snowflake’s cloud data warehousing services also became generally available on Microsoft Azure Government last month, offering U.S. government agencies compliance, governance and security capabilities.

9. HPE’s GreenLake Takes Off

Hewlett Packard Enterprise’s HPE GreenLake, a pay-as-you-go IT solution that provides a public cloud consumption experience on-premises, saw a sharp uptick in momentum this year, with worldwide channel chief Paul Hunter calling it a “shooting star” with exponential channel sales growth.

HPE booked more GreenLake channel business in this year’s fiscal second quarter than it did in all of 2018. GreenLake is HPE’s fastest-growing segment, with contracts valued at more than $2.8 billion and 600-plus customers, the company reported last month.

“None of our competitors have an offering like GreenLake,” Terry Richardson, HPE’s vice president of North America channels and alliances, told CRN. “Some have tried to imitate it because they understand the market traction.”

HPE introduced two new GreenLake offerings last month: GreenLake for Midmarket and GreenLake for Aruba.

8. Microsoft Connects With Oracle And VMware

Rivals Microsoft and Oracle last month announced they were linking their clouds to allow joint customers to migrate and run enterprise application workloads across Microsoft Azure and Oracle Cloud.

The direct network interconnection, which allows Microsoft Azure and Oracle Cloud customers to extend their on-premises data centers to both clouds, debuted in Oracle’s Ashburn, Va., data center region and Azure’s East U.S. region, and eventually will extend to other regions.

The alliance is viewed as a bid by Redmond, Wash.-based Microsoft -- the No. 2 cloud provider -- and Redwood City, Calif.-based cloud underdog Oracle, to better compete against No. 1 Amazon Web Services.

“With this partnership, our joint customers can migrate their entire set of existing applications to the cloud without having to re-architect anything, preserving the large investments they have already made,” Don Johnson, executive vice president of Oracle Cloud Infrastructure, said in a statement.

Under Microsoft and Oracle’s interoperability alliance, enterprises can connect Microsoft Azure services such as analytics and artificial intelligence to Oracle Cloud services such as its Autonomous Database, and deploy cloud solutions that marry Oracle applications with Microsoft databases running on Azure and/or Oracle Cloud infrastructure.

Microsoft and Oracle will offer joint support of the connected cloud alliance.

In April, Microsoft and VMware unveiled their much-anticipated cloud alliance with the introduction of Azure VMware Solutions, a native, fully supported VMware environment in Microsoft’s cloud, along with integrated desktop-as-a-service and device management capabilities.

"As we were planning this, there was lots of demand for this," Michael Dell, CEO of VMware parent company Dell Technologies, remarked during his keynote address at Dell World. “It's great to see this solution now coming to market this year. We're innovating a whole new level of cloud-agnostic interoperability for your workloads."

Azure VMware Solutions incorporates all VMware Cloud Foundation technologies -- including vSphere compute virtualization, NSX networking and vSAN storage -- to deliver native, supported and certified VMware infrastructure on Microsoft Azure. And it will make it easier to add capabilities such as artificial intelligence and the internet of things to VMware-based applications.

But in 2015, the launch seemed unlikely. Microsoft was said to be prepping for a third-quarter rollout of technology that would allow VMware-based virtual machines to run on Azure, but CRN reported that VMware rebuffed the idea. VMware's vCloud Air product marketing team sent a letter to its salespeople instructing them on how to answer questions about VMware support on Azure

"The ability to easily execute vSphere on Azure is unlikely to be a possibility for most, if not all, customers in production environments in the near future," the document stated.

7. JEDI And Government Contracts

The battle for the U.S. Department of Defense’s estimated 10-year, $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud transformation contract continues this year with a decision expected next month.(CQAugust)

In April, the DoD short-listed Amazon Web Services (AWS) and Microsoft Azure as the finalists in the running to provide commercial cloud computing services for DoD departments and U.S. military, taking Oracle and IBM out of the race.

The U.S. Court of Federal Claims is expected to hear a legal challenge this month brought by Oracle, which in December filed a lawsuit claiming that giving the contract to a lone vendor would violate a 2008 law restricting single-supplier awards. Oracle also argues the DoD failed to properly consider that three former government employees involved in its request-for-proposals process had potential conflicted relationships with AWS.

AWS, which in December voluntarily joined the case as an intervening defendant, last month asked a federal judge to throw out the case on the grounds Oracle misstated the law and is trying to “dictate to DoD what DoD's needs should be and to declare that Oracle's admittedly deficient solution is ‘good enough.’” AWS also argued that the DoD determined that the cloud procurement process had not been negatively impacted by conflicts of interest.

DoD chief information officer Dana Deasy, meanwhile, told reporters that the DoD wouldn’t wait for the court’s decision in making its award.

In other government cloud developments, Microsoft Azure revealed in April that it had built two new Azure Government Secret data centers in undisclosed areas for classified government data and analysis. Microsoft this year also won a five-year contract worth up to $1.76 billion contract to provide IT support and consulting services for the DoD, Coast Guard and intelligence services.

6. Tech IPO Filings Reveal Cloud Spends

The tech world got an inside glimpse of how much cloud-reliant technology companies are paying to use Amazon Web Services and other cloud providers thanks to a slew of initial public offering registration statements filed this year.

Ride-hailing company Lyft in January committed to spending $300 million on AWS services through 2021, with an $80 million minimum in each of the three years, according to its March regulatory filing. That equates to about 14 cents per ride based on an estimated $8.3 million monthly AWS payment and the 178.4 million rides that Lyft facilitated in the quarter that ended Dec. 31. Under its previous March 2018 agreement with AWS, Lyft’s purchase commitments totaled at least $150 million through 2021.

Lyft rival Uber, meanwhile, paid Google about $58 million from 2016 to 2018 for use of Google Maps to operate its car-routing system, according to its S-1 filing in April. During the same time period, Uber also paid Google $631 million for marketing and advertising services, $70 million for technology infrastructure and enterprise services and about $1 million for related services.

Pinterest revealed a six-year, $750 million AWS cloud deal in its S-1 filing in March. The image-sharing social media company’s agreement with AWS, amended in May 2017, requires it to spend at least that sum on cloud services – primarily compute, storage and data transfer – through 2023. Pinterest was required to make an initial $150 million purchase from AWS by June 2018. Its remaining contractual commitment was $441.1 million as of Dec. 31, 2018, according to the filing.

Apple’s contract with AWS has it spending more than $30 million per month with the cloud provider, CNBC reported in April. If Apple continued that spending level through this year, its AWS expenditures would exceed $360 million, following $350 million in AWS outlays last year, according to CNBC, which cited unnamed people familiar with the arrangement.

The Information posted an April reported that contended Apple had spent $775 million with AWS in 2017.

5. Salesforce’s $15.7 Billion Deal To Acquire Tableau

Cloud-based software company Salesforce in June announced a $15.7 billion deal to boost its business analytics offerings by acquiring Tableau, a top developer of business intelligence and data visualization software.

The acquisition will better position Salesforce to compete in the digital transformation market, both companies said. The deal news came just four days after Google announced it was buying business analytics company Looker Data Sciences for $2.6 billion.

Salesforce will buy the publicly traded Tableau in an all-stock transaction that Saleforce CEO Marc Benioff said would marry the world’s No. 1 cloud-based customer relationship management (CRM) platform with the leading analytics platform.

“Tableau helps people see and understand data, and Salesforce helps people engage and understand customers,” Benioff said.

The 16-year-old Tableau, which has been publicly traded since 2013, will continue to operate independently under its name following the deal’s expected closure in the fiscal third quarter ending Oct. 31. It will remain based in Seattle under current CEO Adam Selipsky.

Salesforce said the combination of Tableau and Salesforce’s Einstein – which provides advanced artificial intelligence capabilities for CRM and Salesforce’s Customer 360 cross-cloud data management platform – will allow it to deliver “the most intelligent and intuitive analytics and visualization platform” and reach a broader customer base.

4. Dell Technologies’ Hybrid Cloud Push

April also saw Dell Technologies unveiling its hybrid cloud platform at its annual world conference, hailing it as the “best on Earth.”

The on-premise Dell Technologies Cloud Platforms – which marked the Round Rock, Texas-based infrastructure company’s largest recent cloud push -- enables hybrid cloud operations across the public cloud, private cloud and the edge, and users to migrate workloads seamlessly using familiar VMware tools.

As CRN’s Mark Haranas reported, it was built on the company’s flagship hyper-converged VXRail infrastructure and VMware Cloud Foundation, VMware’s hybrid cloud solution that provides integrated cloud infrastructure and cloud management services to run applications in private and public environments. Dell also validated designs for partners and customers to build Dell Technologies Cloud Platforms with traditional servers, networking and storage arrays, inclusive to Dell EMC Unity and PowerMax.

Dell also unveiled Cloud Data Center-as-a-Service, a new consumption-based, on-premise offering with fully managed services for VMware Cloud Foundation, the VMware Cloud stack and VxRail.

3. Tech Companies Face Antitrust Probes

Presidential candidate Sen. Elizabeth Warren (D-Mass.) and other elected officials and government regulators have been training their sights on the enormous sizes and competitive dominance of tech giants Amazon.com, Apple, Facebook and Google.

Executives from the big tech companies have been called to testify at tomorrow’s (CQ July 16) House Judiciary Committee antitrust hearing on the power that their platforms hold.

The hearing comes as the U.S. Department of Justice and Federal Trade Commission are reported to have split oversight of the companies as they consider antitrust investigations, with the FTC claiming jurisdiction over Amazon.com and Facebook, and the DOJ retaining oversight of Apple and Google. Last month, seven U.S. senators led by Sen. Amy Klobuchar (D-MN), the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, queried both agencies about the existence and scope of any potential investigations.

Google shareholders rejected an activist proposal to consider strategic alternatives for the company – including a voluntary breakup -- under a resolution presented at Google’s annual meeting last month to head off a government-forced asset sale that could result in lesser value for shareholders.

And in an interview last month, AWS CEO Andy Jassy said he saw no reason to spin off AWS from parent company Amazon.com, unless federal antitrust regulators force a divestiture.

“I can’t speak to what the government is thinking or will do, but at the end of the day, we operate in the United States, and we will follow the United States laws,” Jassy said. “If we were forced to do it, I guess we would have to do it. We don’t spend a lot of time talking about it.”

2. IBM-Red Hat Merger Closes

IBM last week (CQ JULY 9) closed its $34 billion purchase of open-source software provider Red Hat, a mega-deal that Big Blue said would boost its market position for hybrid cloud solutions.

The acquisition, announced last October, leaves Red Hat as an independent, wholly owned subsidiary of IBM. Red Hat CEO Jim Whitehurst and his current management team will continue to lead Red Hat, which will maintain its brand, culture and Raleigh, N.C., headquarters, according to IBM.

IBM in May said it had completed a $20 billion bond sale to help fund the acquisition, which IBM shareholders overwhelmingly approved in January.

European regulators approved the deal late last month after the European Commission determined it did not pose anti-trust competitive concerns and said the acquisition would increase choice for enterprises, allowing them to more easily shift workloads between on-premise servers and multiple public and private clouds.

In the middleware and system infrastructure software markets in which IBM and Red Hat have overlap, the commission found the merged companies would “continue to face significant competition from other players in all potential markets.” It determined that the combined companies would not have sufficient market power to shut out or reduce the competitiveness of rivals’ offerings by degrading their interoperability with Red Hat’s flagship Red Hat Enterprise Linux operating system. The commission also concluded the merged entity would be unlikely to reduce access to Red Hat’s source code or influence the development of open-source projects to ease competition, saying such a move would result in “strong adverse counter-reactions from the open-source community of developers that would negatively affect Red Hat's products.”

IBM last week said it would preserve the “independence and neutrality of Red Hat's open-source heritage,” including its open-source community leadership and development model. Red Hat also will continue and expand its partnerships with cloud providers including Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba, it said.

IBM and Red Hat will continue to operate separate partner programs and ecosystems. New IBM-Red Hat Run Books include solution sales kits, sales plays, presentations, use cases and other materials from IBM and Red Hat. IBM and Red Hat partners can use Business Partner Connect to collaborate on opportunities and business development. In addition, the Watson-powered chatbot now has Red Hat partner program content. IBM has invited Red Hat Partners to join IBM PartnerWorld, and said Red Hat accreditations will count toward the program’s competency requirement.

“I think we’re going to have great programs (and) processes to make sure that all our channel partners ultimately benefit, because we believe this will accelerate our growth,” Whitehurst told CRN at the Red Hat Summit in Boston in May.

1. Google Cloud Makes Moves Under New CEO

Former Oracle executive Thomas Kurian grabbed the reins of Google Cloud with gusto this year, pledging to double down on go-to-market investments, including channel partner programs and sales.

The new CEO of the third largest cloud provider is targeting enterprise customers to narrow the gap with No. 1 Amazon Web Services (AWS) and No. 2 Microsoft Azure. He had a formal coming out at the Google Next ’19 conference in April in San Francisco, where he unveiled a new open-source partnership program and the general availability of the Anthos hybrid and multi-cloud platform, which has capabilities extending beyond customers’ on-premise data centers and Google Cloud to competitors’ third-party clouds, such as AWS and Microsoft Azure.

Google Cloud has announced three acquisitions under Kurian – a deal to buy data migration startup Alooma in February for undisclosed terms, the $2.6 billion purchase of business analytics company Looker Data Sciences in June and the purchase of cloud storage company Elastifile last week (CQ July9), also for undisclosed terms.

Google Cloud also launched a new channel partner program on July 1 that’s designed to make it easier for channel partners to engage with the company and better highlight their expertise to customers. The Google Cloud Partner Advantage program consolidates 16 partner programs under one umbrella and will trigger Google Cloud’s first recruitment efforts to increase its partner ecosystem, according to Nina Harding, Google Cloud’s chief of global partner strategy and programs.

The program focuses on six industries aligned with Kurian’s enterprise push (financial services, healthcare, retail, manufacturing, the public sector, and communications, media and entertainment) and five solution areas (infrastructure, data management, business analytics, packaged applications, and productivity and work transformation).

It includes a new partner portal, new expertises and partner advisors, named Google Cloud contacts that will be assigned to each partner to help them navigate their business with the cloud provider.