Cloud Roundup: Broadcom-VMware Hits Snag in China, IT Incurs Too-High Cloud Costs
Our latest cloud news roundup features an acquisition update, looks at research you need to know, and more.
![Broadcom-VMware and China, Chinese hackers Broadcom-VMware and China, Chinese hackers](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltbdf5ae2457a48169/6537c763e6404485abed6fc5/China-Flag.jpg?width=700&auto=webp&quality=80&disable=upscale)
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China’s antitrust authority earlier this week pressed pause on its review of the pending, $61 billion Broadcom-VMware deal.
According to SeekingAlpha, the regulator decided to begin “advanced remedy talks” regarding the transaction.
The start-and-stop activity recalls the same stutters that occurred over the past year between Broadcom and the European Union and the UK’s Competition & Markets Authority. Dealreporter.com said this week that China’s State Administration for Market Regulation likely will impose behavioral remedies, though it was not clear what those might be. In Europe, authorities instituted several requirements around servers that Broadcom has agreed to meet.
Broadcom continues to assert that it will close the its VMware purchase on Oct. 30. In the United States, pre-merger waiting periods have expired, posing no legal obstacle to Broadcom’s plans. At this point, only China appears to stand in the way (though any hurdles are likely to dissolve as remedy talks proceed).
Once the acquisition closes, a number of VMware staff could lose their jobs. Rumor has it Broadcom will shed a significant number of roles.
IT departments are incurring higher-than-expected costs from cloud deployments.
That’s according to a new survey from Aptum, a global managed services provider and consultancy.
Poor planning, a lack of internal expertise, fast cloud adoption and a lack of familiarity with cloud complexity all contributed to a 28% increase in expenses compared to 2021, Aptum found. Hybrid and multicloud approaches magnified the challenges. All told, 71% of the 400 respondents said cloud-related costs make up 30% or more of their total IT spend. To those points, more than half (52%) of respondents said their organizations have wasted “significant” amounts of money because of inefficiencies with cloud platforms and services.
“It isn’t the cloud that is costly but the lack of observability and governance which hinder management and lead to cost overruns,” said Ian Rae, CEO and president at Aptum. “This shortfall significantly hampers the ability to unlock the cloud’s potential for enhancing operational efficiency while controlling costs.”
The outcomes of Aptum’s “Cloud Impact Study 2023 – Maximizing Value: Controlling Costs and Optimizing Cloud Spend” clearly highlight where cloud channel partners can step in with management and FinOps expertise.
Here’s another reason why IT departments could be taking a hit on cloud deployments: Spending on infrastructure services barely rose in the second quarter of 2023, according to recent stats from research firm Canalys (an Informa company).
The rate — 16% — represented a slight decline from the first quarter’s figures, which reached 19%.
Still, in spite of that slower growth, Amazon Web Services, Microsoft Azure and Google Cloud all continued to add to their cloud market share. For the second quarter, that looked like a collective 20% increase, according to Canalys. Again, though, that marked a slight reduction from the first quarter, where the three hyperscalers grew by a combined 22%.
But don’t expect growth to stay down for too long, even if macroeconomic uncertainties linger. In the second quarter, both AWS and Microsoft launched new partner programs targeting the AI phenomenon (AWS alone is investing $100 million into generative AI). They’re intent on collaborating with a range of partner types to infuse more AI into customers’ workloads. Alex Smith, vice president at Canalys, noted that certain types of partners will excel.
And who are they? The ones who are “building service practices around AI, engaging in sales and marketing initiatives that focus on AI, producing original thought leadership and compelling case studies around AI applications and selling solutions that are embedded with AI capabilities,” Smith said. “It’s these partners that will assume a leading role in steering companies toward being leaders in this field.”
Meanwhile, AWS continues to retain its “king of cloud” crown, according to Canalys figures. The world’s largest public cloud provider reaped 30% of total global spend on cloud infrastructure services (which, in Canalys’ definition, also include platform as a service) in the second quarter. But Azure is quickly nipping at AWS’ heels. The world’s longtime second-largest hyperscaler attained 26% market share in the second quarter, per Canalys. Google Cloud remains the smallest of the three, although it achieved 31% year-on-year growth in the last quarter. Still, it only holds 9% of the cloud market, Canalys said.
Red Hat is talking up the development preview of its next big release of the OpenStack platform.
The company, now owned by IBM, continues to work to “more tightly integrate Red Hat OpenStack Platform with Red Hat OpenShift to help service providers scale faster and maximize their resources,” wrote Sean Cohen, director of product management, in a Sept. 19 blog.
That will allow the teams that manage OpenStack clouds to take advantage of Kubernetes capabilities, reaping better resource management, scalability and flexibility, Cohen said.
“Red Hat is providing our OpenStack customers a path toward future-proofing their existing investments,” Cohen noted.
Red Hat is inviting partners to reach out to their account reps to “be among the first to experience this next step,” he added.
If you’re into edge computing, especially amid the generative AI boom, you’re on a fast track to success — at least, if a new report from Accenture is onto something.
The behemoth consultancy’s study, “Leading with Edge Computing: How to Reinvent with Data and AI,” shows the majority of respondents (83%) believe edge computing is essential to staying competitive. Another large chunk (81%) noted that failing to act quickly could lock them out of that ability to compete.
As such, Accenture devised a three-step framework it sees as helping organizations, including channel partners, to get the most value from edge deployments:
• Strategize for edge: Approach edge computing as a foundational capability rather than an add-on feature. Accenture said its research shows that companies with the most success perceive edge as a key element of their business strategy.
• Scale across the enterprise: Build out edge across the enterprise on the back of cloud and integrate with enterprise data and AI applications, not just ad hoc projects. Instead of investing in isolated projects that yield fragmented outcomes, the most successful edge adopters take steps to scale implementation across businesses, Accenture said. They look for ways to standardize around successful use cases while leaning on partners for help.
• Strengthen capabilities: Prepare all employees and processes for edge computing. The technology impacts employee experiences, not just the IT department. Business leaders need to create a culture that nurtures human creativity, flexibility and insight to optimize their digital tools for precision, speed and scale, Accenture said.
Still, to take advantage of edge computing, more organizations need to deploy it. Accenture found that only 65% of companies use edge to some degree. Of these, just half have “deeply integrated” edge into their cloud, data and AI systems, the consultancy said.
“Now is the time for every enterprise to adopt edge in order to fuel innovation for business growth,” said Andy Tay, global lead of Accenture Cloud First. “Edge presents unique hurdles due to physical limits that require a new understanding of infrastructure, security and user experience to overcome. But with the right approach — where edge is aligned to the business strategy, integrated with the digital core and supported by partners and people — edge will lead to differentiated experiences for customers and employees.”
Accenture surveyed 2,100 C-suite executives across 18 industries in 16 countries to reach its conclusions.
Still, to take advantage of edge computing, more organizations need to deploy it. Accenture found that only 65% of companies use edge to some degree. Of these, just half have “deeply integrated” edge into their cloud, data and AI systems, the consultancy said.
“Now is the time for every enterprise to adopt edge in order to fuel innovation for business growth,” said Andy Tay, global lead of Accenture Cloud First. “Edge presents unique hurdles due to physical limits that require a new understanding of infrastructure, security and user experience to overcome. But with the right approach — where edge is aligned to the business strategy, integrated with the digital core and supported by partners and people — edge will lead to differentiated experiences for customers and employees.”
Accenture surveyed 2,100 C-suite executives across 18 industries in 16 countries to reach its conclusions.
It’s time to play a little catch-up on news from the world of cloud computing. With yours truly back in the game after two weeks of vacation, we’re starting with the juiciest update: a look at the progress on the somewhat controversial Broadcom-VMware pairing.
The last major hurdle the $61 billion Broadcom-VMware deal faced was in the U.K. But that got resolved in July, a week after the European Union also gave the transaction the green light. The United States poses little, if any, issue for Broadcom-VMware to close — it’s really up to China now. We take a look at what happened this week.
After that, we dive into some interesting findings from Aptum, in its latest cloud-centric report, the global managed service provider discovered that IT departments are overspending – big time – on cloud computing. Why? There are several reasons, which we highlight and that you’ll want to home in on because they could be key to expanding your business.
Next, and somewhat related to Aptum’s conclusions, research from Canalys points to organizations spending less on hyperscalers’ services. That’s putting a dent in the earnings at Amazon Web Services, Microsoft Azure and Google Cloud, but don’t expect the numbers to stay down for too long. If Canalys is right, demand for AI is poised to overcome slowdowns.
Finally, we include some developer-oriented news from Red Hat and bold predictions from Accenture around edge computing (and AI … of course).
But let’s kick off this end-of-week, end-of-vacation cloud computing news with the latest on Broadcom-VMware. Start with the image above.
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