Cloud News

The 10 Biggest Cloud Computing News Stories Of 2021 (So Far)

Donna Goodison

CRN breaks down the top cloud computing news midway through the year, from a new Amazon Web Services CEO, a channel chief change for Microsoft and the resignation of IBM’s president, to the U.S. Department of Defense’s JEDI contract cancellation, spin-off plans by Dell Technologies and a key HPE acquisition.

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Leadership changes, a Microsoft loss with the U.S. Department of Defense’s cancellation of its potentially $10 billion JEDI contract, a key Hewlett Packard Enterprise acquisition and Dell Technologies and IBM spinoffs were among the top stories so far this year for the cloud computing industry.

The industry has continued to see strong growth this year after the coronavirus pandemic accelerated organizations’ plans to migrate their workloads to the cloud and take the next steps to adopt cloud services and digitally transform their businesses, tapping providers’ offerings in areas including data analytics, artificial intelligence (AI) and machine learning. The pandemic also still is fueling advances in cloud-based communications and collaboration services for a post-pandemic hybrid workforce that will continue to include remote workers.

Research firm Gartner expects end-user spending on public cloud services to climb to $396 billion this year and increase 21.7 percent to $482 billion in 2022. It predicts public cloud spending will account for more than 45 percent of all enterprise IT spending by 2026, up from less than 17 percent this year.

Here’s a look at the 10 top cloud computing news stories of 2021 so far.

For more of the biggest startups, products and news stories of 2021 so far, click here.   

10. IBM Unveils Kyndryl Spin-Off Details

IBM this year outlined the operating model and global structure of the independent company that will be created following the spin-off of the Managed Infrastructure Services business of its Global Technology Services division into a new public company. It also named the company Kyndryl and said it would be based in New York City.

IBM announced the spinoff last October to accelerate its hybrid cloud growth strategy. The separation is expected to be completed by the end of this year.

Kyndryl will focus on the management and modernization of IT infrastructure. In July, IBM said Kyndryl will create six global managed services practices focusing on cloud; applications, data and AI; security and resiliency; core enterprise and zCloud; network and edge; and digital workspace—in addition to an advisory and implementation services practice. The latter will include senior business and technology executives who’ll advise Kyndryl customers on best-in-class digital environments and the adoption and integration of advanced technologies.

IBM in January named Martin Schroeter—previously vice president of global markets at IBM and the company’s chief financial officer—as CEO of Kyndryl. Several other key executive appointments followed, including Antoine Shagoury as chief technology officer. Shagoury had been a venture partner at Ridge-Lane LP, a Washington, D.C.-based strategic advisory and venture development firm focused on education, sustainability and information technology, and he previously served as executive vice president and global chief information officer at State Street Corp.

9. Microsoft Calls Out AWS And Google Over Their SolarWinds Response

Microsoft President Brad Smith in February publicly criticized Amazon Web Services (AWS) and Google over their response to the massive SolarWinds attack.

Smith called out Microsoft’s biggest rivals for not publicly sharing what they knew about the breach by alleged Russian government hackers that first was announced last December.

As CRN Senior Editor Michael Novinson reported at the time, Smith told members of the U.S. House Committees on Oversight and Reform and Homeland Security that while Microsoft had by then published 32 blogs describing what it had observed about the attack, Google had published only a single blog, and AWS hadn’t published anything. AWS, the previous day however, did say that the SolarWinds hackers had used its Elastic Compute Cloud (EC2) in their attack “just like they would use any server they could buy or use anywhere.”

“There are other companies that, to the best of my knowledge, have not even alerted their customers or others that they were a victim of a SolarWinds-based attack,” Smith said at the time. “These are companies where their own infrastructure was used to launch the attack. And somehow, they don’t think it’s part of their responsibility to let these victims know that they’re victims. And that needs to change.”

Unlike AWS and Google, Smith alleged, Microsoft alerts its customers as soon as it finds an adversary has penetrated its network, even if the compromise had nothing to do with Microsoft’s service.

“You have other companies, some of the largest companies in our industry, that are well-known to have been involved in this, that still have not spoken publicly about what they felt,” Smith said. “There’s no indication that they even informed customers.“

8. HPE Acquisition Of Zerto

Hewlett Packard Enterprise (HPE) said in July that it was acquiring Zerto, which specializes in cloud data management and protection, to boost its HPE GreenLake edge-to-cloud platform.

The $374 million cash deal  is expected to add $130 million-plus in run-rate revenue at software gross margins for the company as HPE Storage continues its shift to a cloud-native, software-defined data services business, the company said.

Zerto’s journal-based continuous data protection technology, which is used by more than 350 managed service providers and 9,000 customers, includes disaster recovery, backup and data mobility in a single cloud data management and protection software offering across on-premises, hybrid and multi-cloud environments. It will be available as a service through HPE GreenLake and HPE’s Data Services Cloud Console

“Data is now the most critical asset,” HPE CEO Antonio Neri said in a statement at the time. “With the explosive growth of data at the edge and across hybrid environments, organizations today face significant complexity in managing and protecting their data. Zerto’s market-leading cloud data management and protection software expands HPE GreenLake cloud data services, allowing customers to protect their data and rapidly act on insights, from edge to cloud.”

The acquisition of Zerto, which is based in Herzliya, Israel, and Boston is expected to close in the fourth quarter of HPE’s fiscal year 2021, which ends Oct. 31, subject to regulatory approvals and other customary closing conditions. Zerto will be organized under HPE Storage.

7. Salesforce Makes $27.7B Slack Acquisition

Salesforce, a cloud-based customer relationship management provider, closed its $27.7 billion acquisition of Slack Technologies in July. San Francisco-based Salesforce said the deal would allow it to better compete in the “work-from-anywhere” space.

Slack Technologies, a channel-based messaging platform provider, is now a wholly owned subsidiary of Salesforce.

In a U.S. Securities and Exchange Commission filing, Salesforce said the Antitrust Division of the U.S. Department of Justice had closed its investigation of the proposed purchase in July. Salesforce had previously disclosed that both it and Slack had received a request for additional information and documentary material—referred as a “second request”—about the acquisition, which first was announced last December.

Stewart Butterfield, the co-founder and CEO of Slack, will continue to lead the new subsidiary within Salesforce.

“Together we’ll define the future of enterprise software, creating the digital HQ that enables every organization to deliver customer and employee success from anywhere,” Salesforce CEO Marc Benioff said in a statement at the time.

6. Dell Technologies Unveils Planned Spin-Off Of VMware

Dell Technologies in April said it planned to spin off its 81 percent equity ownership in VMware this year to form two stand-alone public companies.

Dell will sell off its majority stake to its shareholders, the largest of which is Michael Dell, its founder and CEO, who is slated to own approximately 41 percent of VMware and will continue to serve as its chairman.

Under the terms of the spin-off, VMware said it will distribute a special cash dividend of $11.5 billion to $12 billion to all VMware shareholders, including Dell, which is expected to receive approximately $9.3 billion to $9.7 billion based on its 80.6 percent ownership stake in VMware.

VMware had been a subsidiary of EMC Corp., which Dell acquired for $67 billion in September 2016. As CRN Senior Editor Mark Haranas reported, Dell said the spin-off will simplify its capital structures, better position it for an investment-grade credit rating and help reduce its core debt stemming from the EMC acquisition.

Dell worldwide channel chief Rola Dagher in June told CRN there would be no changes to Dell-VMware partner synergies after the spin-off.

“We have agreed to basically have the same commercial agreements that have the same benefits for partners,” Dagher said in an interview with CRN. “There are no changes whatsoever right now. I don’t know what the years ahead of us will bring, but at Dell, we’ll continue to modernize the core infrastructure around everything that we’re doing with VMware and our partners. Actually, we opened up more with some of the [IT distributors] as well, who are excited about what we launched at Dell Technologies World around VMware.

The transaction is expected to be completed in the fourth quarter of this year. In May, the VMware board announced Rangarajan Raghuram as CEO and a board member effective June 1. An industry veteran, Raghuram previously had been executive vice president and chief operating officer of products and cloud services at VMware. Michael Dell will stay on as VMware’s board chairman following the spin-off.

5. Jim Whitehurst Steps Down As IBM President

IBM surprised partners in early July when it said that Jim Whitehurst (poctured) had decided to step down as its president after serving just under 15 months in the role.

Whitehurst, who had been CEO of Red Hat for more than 12 years, joined IBM as part of its $34 billion acquisition of the enterprise open-source software provider, a deal that closed in July 2019. IBM CEO Arvind Krishna credited Whitehurst for playing a pivotal role Red Hat’s integration with IBM and being instrumental in articulating IBM’s strategy.

Whitehurst remains with IBM as a senior adviser to Krishna and the rest of the company’s executive leadership team. IBM has yet to name his replacement.

4. Microsoft Names A New Channel Chief

Microsoft’s 400,000-strong partner ecosystem had a leadership change in April, when Rodney Clark (pictured) replaced Gavriella Schuster as channel chief.

A 23-year Microsoft veteran, Clark had been leading the technology company’s IoT and mixed-reality sales business for over three and half years, most recently as a corporate vice president responsible for building intelligent systems from edge to cloud and mixed-reality capabilities, and driving sales and go-to-market execution with partners and customers. He also was general manager of IoT for an additional four years. Clark, who had worked directly with Microsoft partners for more than 15 years, called his new role—which includes the title of corporate vice president of global channel sales—his “destination role” and “dream job.”

Schuster retained her title as Microsoft’s corporate vice president of One Commercial Partner as she helped Clark transition to his new role.

“The restrictions brought on by COVID have given me time to reflect on and reconnect with my passions and to spark a new passion to drive a movement to shift the status quo and make an impact on inclusion and gender equity in the tech industry,” Schuster said in a LinkedIn post at the time. “At this same time, I was in conversation within Microsoft about the next steps of transformation for the business. As a result, we concluded that now is a good time to begin to transition my current Microsoft accountabilities and focus on thinking about how to engage in work that fuels my passions.”

3. The DOD Shelves Its JEDI Cloud Contract

The U.S. Department of Defense in July cancelled its potentially $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud computing contract won by Microsoft in October 2019 to digitally modernize the agency, including the military.

The DOD said while it still required enterprise-scale cloud capabilities, it had determined the JEDI contract no longer met its needs due to “evolving requirements, increased cloud conversancy and industry advances.’ It instead will issue a new multi-vendor contract—the Joint Warfighter Cloud Capability—and plans to seek proposals from a limited number of sources, namely Microsoft and AWS.

Implementation of the JEDI contract had been delayed due to AWS’ lawsuit protesting the award to Microsoft, its chief rival. AWS, which also had vied for the contract, alleged the DOD erred in its technical evaluation of the cloud providers’ bids for the contract. It also claimed the White House under the Trump administration—including former President Donald Trump himself—wielded undue political influence on the bid selection process based on Trump’s alleged “unapologetic bias” against Amazon and its former CEO Jeff Bezos, who also owns The Washington Post.

2. Andy Jassy Tapped As CEO of Amazon

Andy Jassy (pictured), the founding CEO of industry leader AWS, in February was tapped as the successor to Jeff Bezos to become the next CEO of parent company Amazon.

Jassy had led Amazon’s cloud computing division since its launch in 2006, growing it to a $59.2 billion-plus annualized revenue run rate and the industry’s dominant public cloud provider.

Jassy was named as Bezos’ successor in the company’s fourth-quarter earnings report and formally took the reins of Amazon July 5. Bezos transitioned to the role of executive chair of Amazon’s board.

“Andy is well known inside the company and has been at Amazon almost as long as I have,” Bezos said in May, during Seattle-based Amazon’s virtual annual shareholder meeting. “He is going to be an outstanding leader, and he has my full confidence.”

1. AWS Gets A New CEO

In March, Amazon disclosed that Adam Selipsky (pictured), then the CEO of Seattle’s Tableau Software, would rejoin AWS as its new CEO. The transition formally took place on July 5, when Jassy moved to lead Amazon.

An AWS alum, Selipsky was part of the cloud computing division’s initial launch team in 2006. He previously had worked for AWS from 2005 until 2016, serving as vice president of marketing, sales and support, a role likened to a chief operating officer position. Selipsky left AWS for Tableau and led the analytics platform provider through its $15.7 billion acquisition by Salesforce in 2019.

“Adam brings strong judgment, customer obsession, team building, demand generation and CEO experience to an already very strong AWS leadership team,” Jassy said in an email to AWS employees at the time. “And, having been in such a senior role at AWS for 11 years, he knows our culture and business well.”

Jassy cited Tableau’s success during Selipsky‘s tenure as CEO there.

“The value of the company quadrupled in just a few years, Tableau transitioned through a fundamental business model change from perpetual licenses to subscription licensing, and the company was eventually acquired by Salesforce in 2019 in one of the largest software acquisitions in history,” Jassy said.





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