Are you using the right storage? The disadvantages of the public cloud
Some people believe that one day all cloud storage will be free. Several leading Internet companies are already offering cloud storage services for your photos and documents at no cost or at a reduced value for the service. It is believed that in the future these costs will be zero for the user, while providers compete for customer preference in the so-called “Race to Zero.”
As reported by our sister publication Business Review America Latina, while storage service can be free for the customer, the storage infrastructure and data services remain costly for the provider. Building data centers to hyper-scale costing billions of dollars, and cloud providers will have to find other services to afford or take advantage of the information contained in this "free" storage.
RELATED TOPIC: 5 ways cloud computing is changing how we do business
We should consider that when you take a photo from a cell phone and the picture is saved in a public cloud service, it keeps information about where and when a picture was taken. Also, images in the pictures can be analyzed, which can reveal information about the preferences of users. Thus, it offers free storage for some kind of control over their personal data, which may offset the cost for these cloud providers.
Greg Knierierman, who works for HDS and has a successful podcast ("SpeakingTech") in The Register, has been blogging about the need for companies to control their data. He cites a recent survey by The Economist, where 87 percent of respondents reported that their senior management is very concerned about the safety and privacy of corporate data. I am sure that business users will not use free storage unless the supplier can ensure security and data privacy.
RELATED TOPIC: How safe is your personal data on social media?
It should be noted that offering free storage is a way to keep customers longer, since it is difficult to move large amounts of data from one cloud to another over the Internet. It becomes even more difficult if the cloud provider uses a proprietary application. It is not unreasonable to think that public cloud providers may even go beyond zero, and offer rebates or other incentives to entice users to store data in their cloud.
One way to avoid the trap of free storage is to use a content platform that provides all the controls to store, access and protect data regardless of the cloud service you use. Hitachi Content Platform, for example, allows you to manage all the content data from the firewall, store data anywhere, including public cloud, and access it anywhere with proper authorization and authentication. The client controls the encryption of data wherever it resides and can be used without fear.
Cloud storage for free is just another tool that individuals and companies can use to manage your storage needs, as long as they understand the needs of your data and compensation. Nothing is free. It cannot be measured in money, but always requires compensation. It may mean that the client waives some control.
RELATED TOPIC: Concerned about big data breaches? Technology can help
This week I'm traveling in India, and I will be able to communicate with my family and talk to my grandchildren, for free, using Face Time. While the service is free, now all my family has an Apple device—that is the profit of the company. I can share documents and collaborate with colleagues from Hitachi worldwide with the use of Wi-Fi in my hotel room with Hitachi HCP Anywhere, knowing that, in this way, the documents are secured.
Finally, I believe that the greatest risk in the "Race to Zero" is the sustainability of this business model. It requires constant innovation to stay ahead of the game. While the West focuses on public cloud providers like Amazon and Google, there are other companies in the cloud in other geographies as Alibaba Group, China, which could be much more aggressive and innovative in this race.
Click here to read the latest edition of Business Review USA!
M&A activity key lever for future tech sector growth
Despite the continuing uncertainty of the pandemic, the tech sector has witnessed soaring dealmaking activity over the past year, rocketing in the second half of 2020, with the last quarter of 2020 a record one for M&A activity, and momentum continuing into 2021.
Dealmaking in tech sector soars in past year
And the latest figures bear this out with the number of technology M&A deals totalling US$208.44bn globally in Q1 2021, according to GlobalData. While the US holds top spot both in volume of deals (1034) and total value (US$140.61bn), Europe ranked next with 649 deals (US$44.49bn) with the UK continuing its reign as Europe’s biggest M&A market with 204 deals.
In particular, megadeals – those valued at US$5bn or more – soared in 2020 representing 59% of all global technology sector deal value in 2020, up from 47% in 2019, according to the latest edition of the EY Technology Global Capital Confidence Barometer.
This tech sector trend towards megadeals is backed up by EY’s CCB data, with 16% of tech sector respondents planning to pursue transformative deals valued at US$5bn or more in the near-term.
While technology deal activity “all but stopped at the beginning of 2020 after fluctuating between historic highs and lows, companies pivoted quickly and tech M&A exploded in the second half of the year”, says Barak Ravid, EY Global TMT Leader for Strategy and Transactions.
M&A activity level for tech sector growth
Looking ahead to the future, technology executives are optimistic, with nearly half (47%) expecting profitability to fully rebound this year, according to CCB data, compared to 23% across all sectors, and with more than half (51%) planning to pursue M&A in the next year in order to sustain growth.
According to Ravid, M&A activity is increasingly becoming a key lever for growth as businesses look to recover.
“To position themselves for future revenue growth, tech companies are now adjusting their M&A strategy to focus more on a target’s business resilience, digital technology alignment and to gain market share through consolidation,” says Ravid.
However, with an increasingly competitive deal market and ongoing geopolitical tensions, the majority of tech execs expect to see more competition in the bidding process for assets over the next year, primarily from private capital.