Top Cloud News: AWS and SAP, IBM, Google Cloud and Hitachi

Just ahead of SAP Sapphire next week, the ERP vendor has expanded its partnership with AWS. The focus, not surprisingly, lies in generative AI. 

The companies aim to make adopting Rise with SAP on AWS an easier process. They also intend to improve the efficiency and performance of SAP workloads in the cloud. To achieve all of that, they will embed gen AI into enterprises’ applications.

Matt Garman, AWS’ incoming CEO, said AWS and SAP “are making it faster and easier for companies to apply generative AI to their core business data to become more efficient, responsive and sustainable.”

AWS' Matt Garman

Christian Klein, SAP’s CEO, agreed.

“Partnerships like this collaboration with AWS are critical as we embed generative AI solutions across our ERP applications so that customers can drive innovation at an accelerated pace,” he said.

At the same time, though, SAP will reciprocate.

This latest AWS-SAP collaboration isn’t just about what AWS will do for SAP — it’s also about how SAP will infuse itself into AWS’ capabilities.

Here’s how CEO Klein explained the situation: “In addition to delivering modern cloud ERP to our joint customers, we are excited to support Amazon on their own transformation journey as they adopt Rise with SAP for … areas such as Project Kuiper, Amazon’s satellite initiative intended to increase global broadband access.”

SAP's Christian Klein

Indeed, Amazon is deploying Rise with SAP on Project Kuiper for supply chain and manufacturing operations as it builds the satellites that will deliver broadband connectivity. Running SAP on AWS will let Kuiper use the latest capabilities in Rise with SAP for faster decision-making, higher performance and more, the companies said. Project Kuiper aims to close the digital divide by delivering fast, affordable broadband to users in hard-to-reach locations.

Meanwhile, going back to how SAP will take advantage of gen AI, expect SAP AI Core to soon feature models from Amazon Bedrock. 

SAP customers will get access to large language models and other foundation models so they can build custom applications with their own data. With these capabilities, SAP and AWS are targeting use cases in domains including finance and product life-cycle management.

On top of that, SAP plans to use AWS’ Graviton 3, Trainium and Inferentia chips to train and deploy its various AI technologies.

In another piece of AWS-related news, IBM, in its fifth acquisition this year, is buying Skyarch Networks. 

Japan-based Skyarch specializes in AWS consulting services. The move comes as IBM Consulting seeks to work with more clients in the Land of the Rising Sun.  

Since its founding in 2001, Skyarch has “grown into a leader for AWS-focused cloud development and managed service offerings in Japan,” John Granger, senior vice president of IBM Consulting, wrote in a May 29 blog. 

Skyarch boasts AWS Advanced Tier Partner status. As such, it “brings a talented team of AWS specialists with expertise across infrastructure design, development, operation monitoring, in-house production support and maintenance across industries” to IBM Consulting, Granger added.

IBM Consulting further will look to Skyarch for platform engineering services in hybrid cloud environments.

The deal comes as research firm IDC forecasts cloud computing growth in Japan to reach nearly 18% CAGR between 2022 and 2027. Plus, IBM, for its part, has committed to training 10,000 consultants globally on AWS gen AI by the end of this year. The Skyarch purchase will help it to achieve that goal.

The acquisition should close next month. IBM did not say how much it’s paying for Skyarch, which is privately held.

In yet another gen AI-centric announcement, we move from AWS to its smaller rival, Google Cloud. 

The world’s third-largest public cloud computing provider has just cemented a multiyear partnership with Hitachi around generative AI. Arguably, Google Cloud has emerged as the leader in gen AI capabilities over the past year.

Indeed, the Hitachi win looks significant for Google Cloud. Hitachi will form a whole new business unit around Google Gemini models, Vertex AI and other cloud technologies. Led by GlobalLogic, a subsidiary of the Hitachi Group that does digital engineering and that has worked with Google Cloud for 15 years, the companies will establish the Hitachi Google Cloud Business Unit and the Google Cloud Center of Excellence. They’ll scale Google Cloud technology quickly to enterprises. 

Meanwhile, Hitachi will incorporate training on Google Cloud's gen AI as part of Hitachi's GenAI Professional training program. In addition, Hitachi will deploy Google Cloud’s AI for its products and services.

Other focus areas for the partnership will include:

“By augmenting the capabilities of our developers and customer success units with Google Cloud gen AI solutions, such as Vertex AI and Gemini models, Hitachi will be able to better serve the needs of its customers in diverse industries and across complex domains such as energy, mobility, manufacturing and digital services," said Toshiaki Tokunaga, executive vice president and executive officer at Hitachi.

Thomas Kurian, CEO of Google Cloud, agreed.

Google Cloud's Thomas Kurian

"Our partnership with Hitachi will provide customers with the resources needed to optimally build, implement, and manage every stage of their generative AI projects,” he said.

In more Hitachi-related news, Hitachi Vantara just released a new block storage appliance as part of its Virtual Storage Platform One hybrid-cloud data platform.

The data storage, infrastructure and hybrid cloud management provider sells through the indirect channel.

The new offerings include three dedicated models that give businesses a common data plane across structured and unstructured data in block storage. The capabilities aim to remove complexity, enhance data protection and reduce carbon emissions, Hitachi Vantara said. 

Hitachi Vantara is targeting the midsize enterprise space with the new storage platform. The company said it developed the appliance as AI and connected technologies have created an “exponential surge” in data volumes.

“[W]e’re helping businesses to elevate their applications like never before,” said Octavian Tanase, chief product officer at Hitachi Vantara. 

Hitachi Vantara's Octavian Tanase

The new appliance, he added, “is powerful and dense, delivering the data processing and reliability that midsize businesses need while minimizing rack space and reducing power and cooling costs for a more sustainable data center environment.”

Ashish Nadkarni, group vice president and general manager, worldwide infrastructure research at IDC, made a similar comment. 

“This move demonstrates Hitachi's commitment to providing scalable, reliable, and efficient solutions that address the complex needs of businesses navigating structured and unstructured data across hybrid cloud environments,” Nadkarni said.

The U.K.’s antitrust watchdog body has released a new working paper that shows Microsoft Azure holding the strongest growth in that market.

The assessment comes as the Competition and Markets Authority continues to investigate the hyperscalers and their impact on competition in the U.K. (And as the CMA itself is set to double its cloud spend with AWS.)

AWS maintains the second-highest lead, according to the CMA, which means the two players dominate.

Overall, cloud computing demand in the U.K. has more than doubled in three years, per the CMA. IaaS and PaaS revenue reached about $9.5 billion in 2022 (around £7.5 billion), compared to about $3.18 billion (or approximately £3 billion) in 2019, authorities found.

"AWS and Microsoft's combined share of supply is increasing steadily year on year while the shares of smaller cloud providers are generally declining overall,” the CMA noted in its May 23 paper. “Of the smaller cloud providers Google holds the largest share but it is [at most a quarter] of the size of AWS and if the current rate at which its share of supply is increasing continues it will be a long time before it catches up with the AWS and Microsoft.”

By revenue, AWS leads in both IaaS and PaaS, even though its IaaS dominance faltered somewhat in 2022, the CMA said. Its share fell to 40-50% while Microsoft’s reach gained 30-40%, according to the CMA.

As the U.K. market consolidated two years ago, the PaaS situation took a similar turn. 

“Both suppliers together had increased their combined share from 40-50% in 2019 to 50-60% in 2022,” the CMA said.

Google ranks as the third-largest IaaS provider, with “a significantly lower share” of revenue compared to AWS and Microsoft, the CMA noted. Meanwhile, IBM and Oracle hold very little market share in the UK, and that hasn’t changed since 2019.

The CMA continues to track the impact of AI on competition in cloud services, too.

“We are still gathering and assessing evidence on this which will enable us to judge whether the growth in AI workloads will allow smaller cloud providers to expand or whether it will result in a further barrier to entry and expansion,” experts wrote.

On the whole, the CMA says it’s keeping an eye on AWS and Microsoft, how they affect potential rivals, and whether they’re profiting at the expense of competitors and customers.

“[O]ur profitability assessment indicates that AWS and Microsoft have both been generating returns above their cost of capital,” the CMA wrote.

Finally, the U.K.-based Cloud Industry Forum has found that cloud computing remains “a trusted constant” amid organizations’ hunger for AI, ESG compliance and greater efficiency. 

The nonprofit trade association recently published a research paper that found that all organizations now use cloud-based services. The most common motivations pertain to more flexibility around IT spend and business agility.

The paper, “Tough times, but innovation springs internal,” also examined the continued prominence of AI as it fuels innovation, and the global emphasis on ESG efforts.

Key findings include:

Meanwhile, nearly all (96%) of respondents indicate AI will be at least somewhat important to their organization in the next five years, an increase from 86% in 2023. Along those lines, 94% of organizations are either planning to or are already using generative AI, with 62% saying it’s already in use across at least some parts of the business.

When it comes to ESG, 40% of respondents told the CIF that IT sustainability is important for their organizations. More than three-quarters (78%) say they plan to reach net zero by at least 2040, and 87% intend to do so by 2050.

Cloud Industry Forum's David Terrar

“With cloud services more or less ubiquitous now, attention should turn to where businesses can maximize their potential, particularly in crucial areas such as AI and ESG,” said David Terrar, CEO of the Cloud Industry Forum. “Our research also indicates that AI’s rapid rise has continued over the last 12 months and shows little sign of slowing. In fact, many of those surveyed highlighted AI as one of their most important projects, outranking other key considerations like security and cloud migration. Cloud naturally has a key role to play in the further adoption of AI, offering the agility to enable businesses to experiment with AI and reap its rewards. Cloud service providers are no doubt already working on how it can fit into their offerings.”

Finally, the U.K.-based Cloud Industry Forum has found that cloud computing remains “a trusted constant” amid organizations’ hunger for AI, ESG compliance and greater efficiency. 

The nonprofit trade association recently published a research paper that found that all organizations now use cloud-based services. The most common motivations pertain to more flexibility around IT spend and business agility.

The paper, “Tough times, but innovation springs internal,” also examined the continued prominence of AI as it fuels innovation, and the global emphasis on ESG efforts.

Key findings include:

Meanwhile, nearly all (96%) of respondents indicate AI will be at least somewhat important to their organization in the next five years, an increase from 86% in 2023. Along those lines, 94% of organizations are either planning to or are already using generative AI, with 62% saying it’s already in use across at least some parts of the business.

When it comes to ESG, 40% of respondents told the CIF that IT sustainability is important for their organizations. More than three-quarters (78%) say they plan to reach net zero by at least 2040, and 87% intend to do so by 2050.

Cloud Industry Forum's David Terrar

“With cloud services more or less ubiquitous now, attention should turn to where businesses can maximize their potential, particularly in crucial areas such as AI and ESG,” said David Terrar, CEO of the Cloud Industry Forum. “Our research also indicates that AI’s rapid rise has continued over the last 12 months and shows little sign of slowing. In fact, many of those surveyed highlighted AI as one of their most important projects, outranking other key considerations like security and cloud migration. Cloud naturally has a key role to play in the further adoption of AI, offering the agility to enable businesses to experiment with AI and reap its rewards. Cloud service providers are no doubt already working on how it can fit into their offerings.”