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Challenges cloudcomputing

Hybrid clouds winover business

CLOUD

MANY BUSINESS SERVICES ARE IN THE CLOUD. BUT DO YOU KNOW HOW TO TAKE ADVANTAGE OF THEM?

02

01

04

03 CASE STUDY

Amazon Web Services

INTERVIEW

PEDRO PRESTEL

SERVICES05 INFOGRAPHIC

Chronology of cloud

What is cloud

Cloud public, private

or hybrid?

Every day, more and more

companies are using business

solutions on the cloud.

According to an article published

recently in Forbes, it has been

estimated that in coming years,

47% of companies' marketing

departments will have more

than 60% of their applications

The challenges of cloud computing: from the revolution to theimplementation in our everyday lives

01

Cloud computing is unstoppable. Young and established companies

increasingly rely on the cloud, whose rapidly evolving technology

will influence all aspects of daily life ( ).

on the cloud. According to

Forbes, specifically databases

(57%), email (54%) and

business-oriented applications

such as CRM (49%) are the

three main applications in

which companies are going to

invest in coming years.

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The cloud is everywhere, even

though it is still invisible for

many.

"When I ask my students if they

use cloud computing services,

very few say that they do. And

almost all of them do, because

they have Gmail or use

Dropbox, for example".

The professor from the Pablo de

Olavide University and director

of the Masters Degree in Cloud

Business at the Seville centre,

Víctor Bañuls, gives a very basic

summary of the place that the

cloud has in anyone's day to day

lives. People really aren't very

aware of its existence although

companies are using cloud

computing on an increasingly

regular basis.

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In Spain, the study on

The current and future status of

software in Spain in 2015

calculates that 62% of

companies rely on cloud

computing to store their

management, marketing and

sales software, although only

15% exclusively store their data

on the cloud. 54% store data

on their own servers and 29%

entrust their data to the cloud

and to the server. 30% are still

suspicious of software solutions

that are stored on the cloud.

The main services that

companies look for in Spain

when using cloud computing

are those related to the

company's email, intranet and

backups.

A recent study by Microsoft

(Beyond infraestructures: Cloud

2.0 Signifies New opportunities

for Cloud Service Providers)

highlights that companies' main

expectations when investing in

platforms on the cloud are to:

improve the quality of the

technology of their platforms and

applications (22%), make their

business grow (18%) and provide

better customer service (13%).

In fact, over the next two years it

is estimated that in the United

States 34% of companies will

have 60% of their applications on

the cloud. The cloud is the

engine of young businesses ( )

such as Dropbox, Airbnb and

Soundcloud and they are taking

on an increasingly more

important role in established

companies, such as Shell and

Mapfre.

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Cloud computing challenges

The main challenges faced by cloud computing in the immediate future,

according to Gartner, analysts, are the following three:

Cloud - client computing: Union of the

cloud with intelligent mobile devices which

will continue to drive the applications that

reside in the cloud.

Computing everywhere: Ubiquitous

access (from anywhere and at any time)

to computing capacities.

Infrastructure and applications defined by

software: dynamically model the

infrastructure and the communications

required by each application.

Advanced analysis: Companies have to

manage huge amounts of data to provide the

correct information to the correct people at

the right time. Work will be put into analytical

technologies that invisibly integrate into all

the applications.

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"There are many loopholes and

that is an obstacle for the

cloud. Companies and citizens

demand security", he

concludes.

Bañuls agrees with the ubiquity

and the importance of the data

analysis highlighted by the

experts. "We want all devices to

be integrated in the cloud for

them to be ubiquitous, and

increasingly connected and

integrated with reality. Alert the

customer, serve them, using

technology".

The professor also agrees that a

key for the future is

"connectivity to devices".

But to achieve this

connectivity that allows

companies to access

data in the cloud from all

devices, he emphasizes

that we must work

"tirelessly on security

and privacy” ( ).

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What the cloud is like on a day to day basis:

Intelligent cloud: The objects

connected to the cloud become

"intelligent". Home heating,

movie recommendations to

watch on HD TV, it's all

controlled by an analytical

system that works from the

cloud. One example is

CityTouch, technology used in

London and Prague to manage

city lighting. Thanks to the real

time information from the

streets that reaches the cloud,

street lighting can be managed,

measures can be taken if there

is excess light contamination, it's

possible to ensure that deserted

streets are lit, etc.

Social cloud: The cloud is

revolutionizing healthcare, as

an example. The cloud allows

hospitals to share all their

information and doctors can

access the diagnoses of

thousands of patients and find

out the exact information about

how treatments have worked

or how they are progressing in

real time.

Analytical cloud (Big Data), on

demand (Business Intelligent):

Analytics plays an important

role in companies, which

receive information quickly

and can develop products

adapted to their customers.

This is the case for the

Financial Times, whose step

into the cloud has enabled it

to rapidly manage all of the

advertiser's information and

the sales activities and

manage subscribers' data to

learn about their preferences.

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Hybrid cloudswin over businesses

02

Companies are opting for this type of cloud computing, as the

combination of public and private clouds enables cost reductions

and ensures security ( ).

Public, private or hybrid

clouds. These are the three

different forms of cloud

computing and when

choosing between them,

companies seem to be opting

for the agility and security

offered by the hybrid

version, which combines

both public and private

benefits.

Public cloud services are

supplied by a provider

through the Internet. It is fast,

easy, costs are shared among

everyone, and it is able to

increase computing if demand

increases. The process is

transparent to the user and

allows information to be

shared when working on

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projects with other people or

companies.

The private cloud has the

same characteristics as the

public one but is exclusive. It

ensures the control and

security of critical data,

although this entails a greater

cost: it requires more capital

investment and a team to

manage the cloud efficiently.

Conversely, the hybrid cloud

( ) is a combination of

private and public clouds

from multiple providers. The

resources from a public cloud

can be used to increase the

capacity of a private one at

times with high bandwidth

consumption peaks, without

having to make the capital

investment that this would

entail.

In a company, the hybrid

cloud makes it possible not to

have to migrate all services to

the cloud where there is critical

and confidential information

such as, for example,

transactions in a database –

this information would be in

the private cloud – and, on the

other hand, it allows for

increasing or decreasing

processing on demand at any

given time (this would be done

in the public cloud).

The infrastructure is adapted,

achieving cost savings by not

having an extended team

when it is not needed. The

biggest challenge of these

clouds is security and ensuring

that all providers can

communicate with each other.

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In hybrid clouds the public

cloud for customers outside IT

is combined with the private

one for those within IT. You

can use a public cloud to

interact with users while

keeping your data protected

in your private cloud.

Investment is not made in

private clouds because there

are services that exist in public

clouds - much faster - and as

security is of concern to

businesses, an SaaS (software

as a service) application can be

used, in which the application

provider can create a private

cloud exclusively for the

company inside its firewall.

Coca-Cola and NASA, among

many others, have opted for

hybrid clouds to get the most

out of their business. To share

information in the case of the

former, and in the case of

NASA to strengthen space

exploring missions and to

improve life on Earth.

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Among the three options,

companies seem to favor

hybrid clouds ( ). Almost

two thirds of respondents

(64%) adopts the hybrid cloud

for its agility and the security it

offers. Its deployment has

grown 9% since 2013, with an

adoption rate of 27%

worldwide, being highest in

Europe, Middle East and Africa,

respectively, according to the

EMC study conducted on more

than 10,000 IT managers in

33 countries.

Developed markets with the

most advanced IT economies

lead the adoption of cloud

computing, while emerging

markets are more reluctant

and have lower levels of

consumption of cloud

computing in general.

In Spain, 68% of respondents

believe that cloud computing

allows companies greater

flexibility and security but with

nuances: only 22% would be

satisfied to migrate most of its

applications to the public

cloud. Security is the greatest

concern when migrating data.

Proof of this is what the giant

IBM decided to launch in

February at Interconnect

2015: the development of a

hybrid cloud so sensitive data

will not have to leave the

country of origin and it will be

cloud computing applications

that will travel to manage data

with servers from each of the

countries.

Big blue has opted to create a

network in different countries

amid growing concern in the

industry about where data and

the privacy of this information

is hosted. A strategy that

allows it to provide services to

companies that handle

sensitive information or

governmental institutions,

which are prohibited from

migrating their data out of the

country. In this way they can

approach cloud computing

without leaving home.

The conquest of the hybrid version

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How the combination of EC2 and S3, cloud computing and

storage from the giant Jeff Bezos, has revolutionized the

technological and business world ( ).

The total figures from Amazon

are enough to make your head

spin (with a turnover of

$88.988 billion in 2014),

although information from the

IT services in the cloud is one

of the secrets that they

haven't revealed. We still

haven't seen any information

published, but the U.S. giant

has promised to provide

figures this quarter, and what

does seem clear is that

Amazon Web Service (AWS)

reigns at present in the world

of the cloud.

Amazon Web Servicesreigns in the cloud world

03/CASE STUDY

SERIE INNOVATION TRENDS · APRIL 2015 · www.centrodeinnovacionbbva.com/en

In 2002, a plane landed in

Seattle. The plane was boarded

by the funder of O'Reilly Media,

Tim O'Reilly, who, despite

having started a dispute a few

years ago due to the 'one click’

patents with Jeff Bezos, wanted

to meet with the founder of

Amazon to convince him to

unveil the Amazon.com sales

information. This means that

since the editors know the

market trends and what people

like, they can decide what to

publish or what to put to one

side, and find out in which

direction the market is going

( ).

In this meeting, Bezos couldn't

see how Amazon could benefit

from sharing this information

with third parties. According to

the book The Everything Store:

Jeff Bezos and the Age of

Amazon, O’Reilly stated that:

“Companies shouldn't just

think about what technology

gives them, but rather what

they can give to others”.

Summarizing his words, the

Irishman showed the founder

of Amazon what they have

managed to achieve with their

technology: the software

known as Amarank allows

them to "scrape the surface" of

the sales information on the

Amazon.com website. He

suggested that they develop

the API (Application

Programming Interfaces) tools.

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The APIs enable developers to

create specific systems for

operating systems, simplifying

the work of a programmer, as

they don't have to write codes

from scratch, and they enable

the IT programmer to use

functions to interact with the

operating system and with

other programs.

These interfaces enable third

parties to gather information

on the products and prices and

rate sales. O'Reilly convinced

Bezos to leave parts of the

website accessible and allow

other websites to develop

services on top of them. By

sharing the information,

Amazon encourages hundreds

of programmers, which in turn

creates an internal work group

within the company: Amazon

Web Services.

The company was launched in

2006, and almost 10 years

later, what began as an

experiment has managed to

get its claws into the largest

section of the cloud, with a

value of around $155 billion,

according to data from Gartner

consulting. AWS doesn't

publish figures regarding its

profit, but it has a million

clients in 190 countries

thanks to the 28 data

processing centers distributed

throughout 11 regions.

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How it works ( )

The Amazon Web Services are cloud computing services. Companies save on infrastructure

and pay for what they use. AWS rents IT power by the hour and stores data by gigabytes:

The AWS Services

Amazon S3

The hard drive in the cloud is one of Amazon's star services. Simple

Storage System (S3) is a simple API used to save and recover files.

Focused on the developer, files can be saved on disk, externally or

unlimited.

EC2

This is the other of the giant's star services, arising from the creation

of "elastic" servers. These servers can be created manually (using the

control panel) or using the API. It's possible to automate the creation

of servers, adding (if necessary) temporary servers for specific tasks

and destroying them later (thus lowering costs). In EC2, clients pay

for gross traffic volume and for using the CPU.

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RDS The EC2 of databases. Automating backup tasks and maintenance.

Elastic Load BalancingBalances loads between different instances, respecting the user

sessions and focusing on the performance of the machines when

distributing requests. It can be configured in just a few minutes.

Elastic IP Service for mapping the fixed IPs to EC2 machines.

CloudWatch

Monitoring and alarm service. Solution for managing the server

resources. Cloudwatch doesn't have additional costs, and the value of

the metrics is recovered every five minutes.

The AWS Services

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“Amazon was here first and

they set the trends. It offers

an environment to hire virtual

machines, for both small

companies or individuals and

for intensive computing", said

Ignacio Blanquer, professor of

the Information Systems

Department at the Technical

University of Valencia and

member of the Institute for the

Research of Molecular Imaging

Instrumentation.

Blanquer has used AWS

services for his genetic

analysis studies. "We use the

machine with genome

assembly applications", said

the professor, which leads to

cost reductions thanks to

cloud computing: "The

resources are increased based

on the workload, so as the

quality remains the same. If

there is a peak, the number of

servers is increased, and vice

versa. It also enables us to

store a huge amount of data".

Blanquer pointed out that the

data "is controversial".

According to the professor, it

violates the laws of many

countries by using the public

cloud. In the case of medical

information, which is the main

target of the cloud, certain

conditions have to be

guaranteed which still don't

exist and which are under

study". Another fear "is that the

company shuts down and the

user loses their information",

he points out. The latter

doesn't seem to be a threat for

AWS, whose combination of

EC2 and S3, cloud computing

and storage, has

revolutionized the

technological and business

world.

Companies and start-ups don't

have to bankrupt themselves

or waste money by buying

materials or hiring engineers.

The threats for the Seattle

giant come from Microsoft,

Google and IBM, which are

putting all their effort into

focusing on a market they

have arrived late for, but with

a goal of standing up to

Bezos.

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The president of Eurocloud España, an association of 65

companies, and the director of operations of Verizon Terremark,

define Cloud computing as a disruptive process that prompts

companies to be more efficient by allowing access to information

at any time. Prestel analyzes the present and future of cloud

computing ( ).

04/INTERVIEW

"The Cloud is a democratizing technology"– PEDRO PRESTEL

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What is the advantage of being

in the Cloud for companies?

The Cloud eliminates access

restrictions in computing, makes

IT tools accessible to the entire

world. The Cloud is a

democratizing technology,

allowing work on the global

market and to get to customers

all over the world. It also entails

an innovation factor as we must

think outside of our usual

mindset. It is a disruptive

process that prompts companies

to be more efficient given that

the entire world may access the

information at any time.

option other than to switch to

the cloud and reap benefit

from its advantages.

What are the

inconveniences?

Users must be conscious of

the risks: a contingency or

continuity business plan must

always exist. It is vital that

information not disappear. We

have to be conscious that the

Cloud occupies a physical

place although it doesn't seem

to do so. All resides in data

centers. It is therefore logical

to have backup services with

other providers; guaranteed

services in various data

centers. Banks, for instance,

store the information in two or

moredata centers.

Do the way of working and the

relationship with customers

have to change?

With the Cloud everything

changes. It changes one's way

of thinking and acting. As all of

the information resides in the

Cloud, it becomes more

accessible and conditions all

negotiation processes. The way

of working changes as it forces

one to interact with others

differently; communication and

innovation are vital.

Why do companies have to

trust the Cloud?

It is a journey without return. We

are already dependent on Cloud

computing ( ). There's no

backtracking, we have no

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Is security an issue?

This is another of the aspects

that must be supervised. The

supplier must guarantee

compliance with the European

legal framework, although one

must not forget that security

starts in-house. The Cloud is

tremendously secure but one

must not forget that personal

data have to be regulated by law

and not accessible to third

parties. It is very difficult for third

parties to access the data–

although we see it in movies it is

truly difficult to do because the

data are encrypted–but the

customer must never leave his

or her data without supervision.

What sectors do you believe will

be most revolutionized by Cloud

computing?

Cloud services are the cement of

a change that has already

arrived ( ). It revolutionizes

education, health... it is a basic

pillar of Big Data. Before we

experienced great difficulties in

analyzing large quantities of

data, we used a sample and

extrapolated. Now the Cloud

allows us to analyze the entire

data set, we will know how we

interact every day, our

consumption behavior, how we

entertain ourselves, how we

communicate; it will help in

medical and scientific research...

The Cloud is already

everywhere.

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What position does Spain

occupy with respect to

Europe in the world of Cloud

computing?

We are a little behind the rest

of Europe. Disparate data

indicate that 45%, 50%, or

even 60% of companies are

using Cloud computing. We

are behind countries like

Germany, the United Kingdom,

or France, but the degree of

implementation in large

companies is quite high.

We must also take into account

that although we sometimes

do not know it–whether we are

users or companies–we use

some type of Cloud solution in

our devices. There is still some

road ahead especially for

SMEs, many of which are still

working in the traditional way

for right now because it works,

for now, and they are not even

considering changing. The

same happens with micro-

companies with few

professionals.

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05/INFOGRAPHIC

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TAP TO SEEINFOGRAPHIC

"The Cloud" is a network of servers. Some servers provide an online service

and others allow you to store and access data and information without

necessarily install any software on your computer or have all the data stored

in your company.

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TAP TO SEEINFOGRAPHIC

In the “cloud” infrastructure, platforms, software or processes

are provided by external IT services.

BBVA Innovation Center creates

the Innovation Trends Series

to keep you updated with

cutting edge innovation trends

and their appliance to your

everyday life. In this papers you

will find all key facts, analysis,

case studies, interviews with

experts and infographics to

visualize the data that each and

every trend describes.

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