2012: Top ten cloud news stories

clock counting down to 2013
clock counting down to 2013

As 2012 comes to a close, Cloud Pro looks back at some of the year's biggest stories

As we approach the end of the year, it's a great time for looking back and reflecting on everything that's happened in the cloud world this year.

We've seen industry giant's fight it out, smaller player exit the market, outages, and a host of new use cases emerge in a wide range of industries for the technology.

Here, we take a look at some of the year's biggest cloud stories and look ahead to what 2013 may have in store.

 

G-Cloud is go

The first contracts were awarded through the Government’s G-Cloud IT services procurement framework in February.

The initiative did not get off to the easiest start and was rumoured to have been dropped all together in July last year.

However, in 2012, the scheme went from strength to strength. The number of services offered through G-Cloud, initially expected to be just 50, topped 1,700 within the first few months of its creation and a number of major Government departments, including the Ministry of Justice, HMRC and NHS, also endorsed its wares.

The success continued as the year went on, with the total value of the contracts open for tender in the second round of procurement increasing by £40 million to £100 million, and version two of the service went live in October.

2013 will see the arrival of G-Cloud III in the first half of the year. However, the Cabinet Office, which runs the service, may still find themselves under pressure to ensure smaller suppliers do not feel squeezed out of the procurement process.

 

Storm clouds gather over gaming services

2012 started well for OnLive, considered by some to be one of only two true cloud gaming services. But, by the summer, the company was in serious trouble.

Struggling with debts of between $30 million and $40 million, the company was about to go under in August, when it was acquired by an anonymous buyer.

The buyout resulted in 50 per cent of its staff losing their jobs, and all of its shareholders losing their stake in the company.

OnLive was not the only cloud gaming service feeling the heat this year. Zynga, the social gaming company best known for Facebook-delivered titles such as FarmVille and FrontierVille, listed on the NASDAQ in December 2011 and initially did well.

However, after peaking at $14 per share in March 2012, its stock began tumbling and the company began losing members of its senior management team at an alarming rate.

By October, it had revised down its projected earnings for the year by $100m and its relationship with Facebook was on the rocks.

It is not all bad news for the sector, though. Steam, which is owned by game development and distribution company Valve, has fared better and recently clocked up 50 million users.

So while things may not be looking so great for some players in the cloud gaming business, 2013 holds more potential than fear.

 

The Olympics

The summer of 2012 was not just our athletes’ time to shine, but also provided cloud computing with a chance to prove its worth.

With the Government warning people off using the London transport system, cloud was quickly tipped as a way of overcoming the chaos, allowing people to work and collaborate without the commute.

Even one of the Olympic host boroughs turned to the cloud to help ease the commuting pressure for its workers.

There were even concerns that spikes in internet traffic, caused by people wanting to stream events live on their computers, would cause broadband ‘dropouts’ nationwide. Thankfully, these fears failed to materialise.

Meanwhile, cloud is already being considered as a key enabling technology for the 2016 Games in Brazil, with claims it could be used to improve ticketing and site pass security, in particular.

 

Amazon verses Mother Nature

Cloud computing’s claims of resilience were put to the test in June, when a large storm took out Amazon’s East-1 US data centre.

The incident was neither the first nor the last for the Amazon cloud during 2012, but garnered a lot of interest outside the IT community as it brought down image sharing social networks Instagram and Pinterest, as well as movie streaming service Netflix.

Online dating-auction site WhatsYourPrice.com even switched service providers after June’s outage.

Further downtime in October caused some to speculate if such large-scale displays of unreliability from some of the cloud industry’s household names could lead to greater hesitancy in cloud adoption.

 

The cloud goes green

One of the great promises of cloud was that it would allow companies to reduce their carbon footprint. This year has seen this promise come under close scrutiny and the results were a little murkier than expected.

Greenpeace has been turning up the heat more than most on the big name cloud providers during 2012.

The environmental campaign group staged a protest against Microsoft’s ‘dirty’ cloud to coincide with the launch of Windows 8 in October, and set up a spoof Amazon Web Services (AWS) website to highlight the kind of green cloud services it feels the company should be offering.

It has also been suggested this year that, if you are and IaaS provider, going green can be good for business, with companies apparently preferring to use firms that have environmentally friendly datacentres.

This is not a message that has gone unheeded, it seems. Apple recently unveiled plans to draw 60 per cent of the power needed for its iCloud data centre in North Carolina from renewable sources, while Microsoft announced it would be going off-grid with its methane-powered Data Plant.

 

Universities embrace the cloud

The education sector has emerged as one of the keenest adopters of cloud this year, with many universities embracing the technology to streamline their operations and cut costs.

What has been notable, though, is the different approach each institution has taken to cloud adoption.

In July, Imperial College London chose to implement ServiceNow’s automation systems to improve its library and student support systems. Coventry University and the London School of Economics and Political Science (LSE) opted instead for virtualisation, while the University of Leicester put in place a cloud platform to help its academic research community collaborate more effectively.

In 2013, we can almost certainly look forward to more universities and colleges putting in place new or additional cloud strategies to manage their daily admin tasks and enhance the calibre of research being undertaken.

 

EU moves to enforce cloud standards

You can tell a technology is gaining traction when bureaucratic behemoths like the European Union start to pay attention to them. This is precisely what happened this year with cloud.

Following an eight month consultation, which found the technology could contribute up to €250 billion to EU GDP by 2020 and create 3.8 million jobs, the European Commission released a strategy document for the cloud, recommending ways of speeding adoption.

Not everyone was happy with the Commission’s proposals. The Cloud Industry Forum (CIF) warned the plan to certify ‘trustworthy’ cloud suppliers could limit competition and exclude mid-sized players.

The UK government also warned the EU’s plans could lead to the creation of a tech “oligopoly” featuring a small number of very large, yet certified, providers dominating the market.

It is unclear how the recommendations from this report are going to manifest themselves in the coming 12 months, especially in the teeth of such opposition. However, the unanimous feeling seems to be that ‘something needs to be done’.

 

Cloud providers race to the bottom

With cloud becoming increasingly popular among businesses and individuals, it was only a matter of time until the cloud price wars started in earnest.

Three of the main public cloud providers, Microsoft, Amazon and Google, have become engaged in a three-way test of nerves. Every time one of these providers has cut its prices this year, it seems like the other two have followed suit within days.

While undercutting competitors is not a new business strategy, nor is it unique to the cloud industry, it will be interesting to see how sustainable the quick-cycling of undercutting is and how long providers can continue to slash and burn for in 2013.

 

PC-era giants turn to cloud

As people rely increasingly on their smartphones and tablets to stay connected and productive, the PC market has been on the wane.

A number of the big names in hardware believe they have the answer though – become cloud service providers.

Dell has been going down this route for some time, and has made a number of acquisitions in recent years to support its strategy.

The firm’s acquisition spree has picked up in pace over the past 12 months, with the firm gobbling up virtual desktop player Wyse and security vendor SonicWall.

Indeed, Dell’s repositioning as a cloud service provider was one of the main topics of discussion at this year’s Dell World in Austin, Texas.

Another PC-era titan, HP, has also begun to position itself as a cloud provider and Gartner recently said the firm’s service level agreements were better than those of dominant industry player, Amazon Web Services.

With long-existent companies struggling to find a place for themselves in the post-PC era, we can expect to see a lot more of this type of reinvention in 2013.

 

Pulling the plug

Knowing which cloud provider to entrust with your data is a conundrum all adopters of the technology find themselves faced with at some point.

Not only are their data protection concerns to worry about, but also the spectre of what would happen to your data should the cloud provider you plump for go out of business, for example, or decides to pull the plug on their service for some other reason.

After all, the “pay only for what you use” approach to cloud often means providers only start to turn a profit once they’ve acquired a certain number of customers, which can put pressure on even the most robust of business models.

This year has seen several players exit the UK market, including cloud-based disaster recovery vendor Doyenz, who in August gave its users less than a month to retrieve their data after news of its departure emerged.

During the same month, Cloud Pro reported that security vendor Webroot was planning to axe its cloud-based email security offering more than a year ahead of schedule.

The firm had previously told users that support for the product would continue until December 2013, but this was later cut down to November 2012.

Meanwhile, Google confirmed this month that the free version of its Google Apps for Business product was being canned, which is aimed at SMBs with fewer than 10 staff.

As a result, companies of any size that want to use the online business productivity suite will now have to pay £33 per year per user for the privilege.

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