serie innovation trends challenges cloud computing hybrid clouds win over business cloud many...

SERIE INNOVATION TRENDS Challenges cloud computing Hybrid clouds win over 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 SERVICES 05 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 applicationsrecently in Forbes The challenges of cloud computing: from the revolution to the implementation 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 ( ).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. SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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, Vctor Bauls, 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.Vctor Bauls SERIE INNOVATION TRENDS APRIL 2015

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 study on The current and future status of software in Spain in 2015 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%). (Beyond infraestructures: Cloud 2.0 Signifies New opportunities for Cloud Service Providers) 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.The cloud is the engine of young businesses SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

Cloud computing challenges The main challenges faced by cloud computing in the immediate future, according to Gartner, analysts, are the following three:Gartner 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. SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

"There are many loopholes and that is an obstacle for the cloud. Companies and citizens demand security", he concludes. Bauls 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 ( ). "tirelessly on security and privacy SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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

Hybrid clouds win over businesses 0202 Companies are opting for this type of cloud computing, as the combination of public and private clouds enables cost reductions and ensures security ( ).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 SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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

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.SaaS (software as a service) 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.space exploring missions and to improve life on Earth. SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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.favor hybrid clouds according to the EMC study 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.Interconnect 2015: 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 SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

How the combination of EC2 and S3, cloud computing and storage from the giant Jeff Bezos, has revolutionized the technological and business world ( ). 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 Amazon Web Service (AWS) Amazon Web Services reigns 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 ( ). O'Reilly Mediain 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, OReilly 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. SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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

How it worksHow 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. SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

RDS The EC2 of databases. Automating backup tasks and maintenance. Elastic Load Balancing Balances 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 SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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

The president of Eurocloud Espaa, 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 ( ).Eurocloud Espaa65 companiesfuture of cloud computing 04 /INTERVIEW "The Cloud is a democratizing technology" PEDRO PRESTEL SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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 We are already dependent on Cloud computing SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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 dataalthough we see it in movies it is truly difficult to do because the data are encryptedbut 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.a change that has already arrived SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en

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

TAP TO SEE INFOGRAPHIC 05 /INFOGRAPHIC SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en Share on Pinterest

SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en Share on Pinterest TAP TO SEE INFOGRAPHIC "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.

SERIE INNOVATION TRENDS APRIL 2015 www.centrodeinnovacionbbva.com/en Share on Pinterest TAP TO SEE INFOGRAPHIC 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. SERIE INNOVATION TRENDS share PREVIOUS ISSUES Read all about Big Data ecosystem Revolution trends mobile: Now you wear it The web is now ubiquitous, in our homes, in our business

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