HCTS 2019: Digital Transformation? More like Digital Revolution

It is that time of year again – registration for our 2019 Hosting & Cloud Transformation Summit (HCTS) is now open! Our 15th annual Summit will be held at ARIA Las Vegas, September 23-25, 2019.

Fifteen years of holding an event of this magnitude is no small thing – and neither is the theme our analysts chose for this year: Empowering the Digital Revolution. We will welcome our analysts and hosting, cloud, datacenter and managed services industry experts to our main stage at ARIA Las Vegas to discuss how the same blueprint that propelled technology companies to become the most valuable corporations in the world will also guide other, less tech-focused, organizations toward similar success. The success or failure for many of these organizations will depend on aid from service providers.

Regardless of where they came from or how long they have been around, all organizations will succeed or fail in this transformation based on their ability to embrace change in an era of unprecedented IT innovation by technologies – such as artificial intelligence (AI) and machine learning (ML), the Internet of Things (IoT) and edge computing, and DevOps and containers – and many won’t have the in-house manpower or resources to adjust quickly. This is where service providers will play a critical role. They will be in a key position to ease that transition with tools and services to manage infrastructure on a subscription basis to aid these companies.

Figure 1 (from left to right) Mark Rice, General Manager of Services Partners at Microsoft; Kelly Hartman, Global Head of the AWS Partner Network at AWS; Daijiang (DA) Han, Head of Global Strategic Alliances at Alibaba Cloud; and Al Sadowski, Research Vice President at 451 Research presenting at HCTS 2018Figure 1 (from left to right) Mark Rice, General Manager of Services Partners at Microsoft; Kelly Hartman, Global Head of the AWS Partner Network at AWS; Daijiang (DA) Han, Head of Global Strategic Alliances at Alibaba Cloud; and Al Sadowski, Research Vice President at 451 Research presenting at HCTS 2018HCTS 2019 will bring top executives alongside our analysts to share key insights on how they plan to leverage service providers to manage cloud infrastructure and leverage security, networking, IoT and colocation services to name a few. Our presenters will also revive previous conversations about partnering with hyperscalers – much like during Research Vice President Al Sadowski’s session that brought executives from Alibaba, AWS and Microsoft to the same stage at a technology event for the first time (Figure 1) – and about how to be more inclusive in the technology industry – much like during our panel with our partners from Women in Cloud and Research Vice Presidents Kelly Morgan and Melanie Posey.

We will post updates between now and September announcing speakers, speaking sessions and sponsors. Until then, register today to get an early bird rate for HCTS 2019, and let us know on Twitter about your favorite HCTS moment from the past 15 years with the hashtag #451HCTS. We look forward to seeing you at HCTS 2019!
HCTS 2019 will bring top executives alongside our analysts to share key insights on how they plan to leverage service providers to manage cloud infrastructure and leverage security, networking, IoT and colocation services to name a few. Our presenters will also revive previous conversations about partnering with hyperscalers – much like during Research Vice President Al Sadowski’s session that brought executives from Alibaba, AWS and Microsoft to the same stage at a technology event for the first time (Figure 1) – and about how to be more inclusive in the technology industry – much like during our panel with our partners from Women in Cloud and Research 
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Key Analyst Insight Roundup from Google Cloud Next ‘19

Contributed by Research Vice President Matt Aslett

Earlier this month, some of 451 Research's analysts across multiple channel disciplines joined 30,000+ Google Cloud Next attendees in San Francisco. As in previous years, the event allowed our team to ponder whether and how Google would be able to translate its popularity with developers into enterprise adoption.

Having attended all three of the Google Cloud Next events (as well as the preceding GCP NEXT event in 2016), we have found it interesting to watch the event become increasingly enterprise-focused while the Google Cloud business attempts to maintain its engagement with developers and startups. Although the latter are still able to experiment to their heart's content using Google Cloud services, there is a clear strategy shift from the company to focus its sales teams on major deployments that will be taken into production at scale. This will increasingly involve Google's internal engineers engaging more directly with enterprise customers, particularly for AI projects, to build playbooks for repeatable, transformational use cases. To do so will likely require the company to engage more fully with consulting and service providers, as well as build up its own professional services organization.

When thinking about overall enterprise strategy, we found that while Google Cloud undoubtedly has had some success with enterprise customers over the years, the flagship customers, such as Spotify, have tended to be digital-native. Deliberate attempts to refocus its sales strategy landed more traditional flagship accounts, but it is fair to say that engaging with enterprise customers while maintaining Google's relationship with developers has not been an easy balancing act. New CEO Thomas Kurian outlined how the company is hiring more enterprise sales staff, but that is only one aspect of how Google is changing – and had already begun to change prior to Kurian's appointment – to address enterprise customers.

Another notable change is Google’s more empathetic approach to meeting customers where they are – accepting that while many potential customers might like to ‘run like Google,' legacy on-premises investments combined with adoption of other cloud services often don't make that possible. The launch of the Anthos hybrid cloud platform for on-premises and multi-cloud application development and management is a good indication of that strategy change, while there has also been a detectable change of emphasis toward describing Google Cloud Platform less as a destination and more as an engine for digital transformation. There is also a greater focus on use cases and ‘solutions' rather than stand-alone products/services. This should serve the company well, particularly in relation to AI and ML, although it will also likely require an increased investment in consulting and professional services.

What we have provided here are only some of the high-level impressions from our analysts. 451 Research subscribers can access this Market Insight report in our Research Dashboard that features all the high-level takes on the most interesting developments from the conference across hybrid- and multi-cloud, AI and machine learning, data and analytics, security, workforce productivity, and IoT. Not a current subscriber? Apply for a Trial.
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RSA Conference US 2019 – Wrap up

Contributed by Research Director’s Scott Crawford and Dan Kennedy

In case you missed it, the annual RSA Conference US – one of information security’s premier showcases – was held earlier this month in San Francisco. As per usual, our Info Security team was on site alongside the other 42,500 attendees.

Innovation was prominently highlighted at RSAC with the annual Innovation Sandbox startup competition. Analyst Pat Daly said the following about the competition, “At the startup end of the spectrum, the top two finalists at this year's Innovation Sandbox, Axonius and Duality Technologies, couldn't have been more different. Whereas Duality claims to have discovered the holy grail by solving the scale and performance issues of homomorphic encryption, Axonius focuses on the somewhat less glamorous problem of asset management by aggregating information from across an enterprise's IT and security architecture to generate an up-to-date asset inventory. It is very telling that, between these two vendors, it was the long-standing problem solved by Axonius that won out against Duality's shiny new offering. While the security industry is constantly looking ahead to the next disruptive technology, whether it is containers, serverless computing, IoT, zero-trust or (in this case) homomorphic encryption, the results of the sandbox show that there is still definite value to be created in solving difficult problems that have nagged at enterprises for decades.”

Despite RSAC’s continued focus on innovation, the sense we picked up from attendees on the show floor was a lot of 'more of the same.' While we find this a bit discouraging – given the increasingly critical role security needs to play in the growing penetration of digital transformation – there were some noteworthy exceptions. It may surprise some that a couple of these weren't the moves of startups, but of strategic vendors introducing a new sort of disruption to the market.

We see these disruptions as examples of an even larger trend, which was the central theme at the (well-attended) annual 451 Research RSA Conference breakfast: the 'innovator's dilemma' and how it threatens existing players in infosec. These players face a direct challenge, not from other vendors of stand-alone products in markets segmented from the rest of IT, but from the cloud hyperscalers and innovators about how IT is developed, deployed and run. These disruptors are redefining the very nature of technology and are incorporating security more directly into concepts from 'GitOps' to cloud-native techniques. This leaves many of security's incumbents facing a daunting choice: continue to cultivate what has succeeded up to now, at the risk being left behind in the future, or embrace today's disruption at the cost of further investment in a winning legacy strategy.

There were many key security trends covered at the RSA Conference such as security analytics, endpoint security, cloud security, zero-trust, managed services, network defense, DevSecOps, regulation and privacy. Our team provides more commentary on the 2019 RSA Conference in a Market Insight report, available through our Research Dashboard. Not a current subscriber? Apply for Trial.
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Prepping for HCTS – Q&A with Research Vice President Brenon Daly

Research Vice President Brenon Daly, who oversees the financial analysis of 451 Research's Market Insight and KnowledgeBase products, will be at the 14th annual Hosting & Cloud Transformation Summit this year. He'll be joined onstage at our Tech M&A Breakfast by Chris Moon, Managing Director at ING, to discuss broad-market tech M&A.

Q: Has there been a M&A breakfast at previous summits?
A: We haven’t hosted a tech M&A breakfast in four years, at least not one that focuses on the overall tech market. During the more-recent summits, we held M&A Breakfasts that focused exclusively on the hosting and services market. We’re bringing back this former favorite because the activity this year is calling for it. The value of tech transactions this year is tracking to the second-highest annual total since the internet bubble burst. Given the almost unprecedented resurgence of acquirers from all tech sectors, we’ll be expanding our look at the market. Spending on tech deals in 2018 has already eclipsed full-year 2017, while the number of acquisitions is rebounding after dropping almost uninterruptedly since mid-2015. It’s a more-robust tech M&A market than any recent year – we have a lot to talk about.

Q: What was your biggest take away from any previous HCTS?
A: My biggest take-away is no transaction happens in a vacuum. Buyers and sellers – regardless of whatever sector they operate in – need to pay attention to the overall M&A market because the current trends – even seemingly unrelated ones – can have a direct impact on the pricing and timing of their transactions.

Q: What can we expect at the M&A Breakfast?
A: We’ll start with a look at spending and volume in the overall tech M&A market. We’ll also surface a number of key trends that are driving activity including a record number of big prints, with the current pace running at two $1bn+ transactions announced each week; the continued acceleration of PE buyers, who are accounting for one-third of all tech acquisitions; and some recent developments in the exit environment for VC-backed companies, where liquidity is drying up.

Q: What can HCTS attendees hope to gain from the breakfast?
A: In addition to the trends I have mentioned, I’ll also have some insight around M&A valuations, which is always a key concern for anyone looking to buy or sell a company. There are a number of dynamics, including renewed confidence at corporate acquirers and unprecedented competition among PE firms, that have driven valuations for both buying groups to their highest-ever level.

Q: Why are you excited to attend this year’s HCTS?
A: I look forward to opening the aperture and including the broader tech market into our discussion of M&A. Understanding how the themes from HCTS figure into acquisition activity – and, more importantly, valuations – is something I’m looking forward to exploring while at the event.

Be sure to connect with Brenon at HCTS to discuss Tech M&A with him, and meet with all of our speakers, at the Bellagio in Las Vegas, September 24-26, 2018. Check out some of our previous Q&As with speakers to learn about all the upcoming topics including the previous Q&A with Aaron Sherrill.
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Prepping for HCTS – Q&A with Senior Analyst Aaron Sherrill

Continuing with our “Prepping for HCTS” series, we are eager to welcome Aaron Sherrill back to Las Vegas for HCTS 2018. Aaron is a Senior Analyst at 451 Research who covers emerging trends, innovation and disruption in the Managed Services and Managed Security Services sectors.

Q: What did you discuss last year?
A: Last year, I led a session with Dan Thompson called “Managed Security Services: The Good, the Bad, and the Ugly.” In that session, we discussed where enterprises are struggling with security in their organizations and examined opportunities for service providers delivering managed security services to fulfil those needs and differentiate their services in a growing market.

Q: What was your biggest take away from last year’s HCTS?
A: I took away that managed services is a broad descriptor – it never ceases to amaze me the many unique approaches service providers take to tackle the market and the various ways services are shaped, packaged, and delivered.

Q: What will you be discussing in this session?
A: My session this year is called “Movin’ on up: Why Service Providers are Moving Up the Security Stack,” and this session will focus on the future of security services, examining the security considerations and opportunities where service providers can add value. Considering that, according to our Voice of the Service Provider survey, 61% of respondents offer security services to their customers.
vsp chart 1 for sherrill QA
Q: Why should HCTS attendees find this session valuable/what can they hope to gain?

A: This session is not just for service providers, but also for those companies that supply technology and tools to service providers and those that consume services from service providers. Security is a broad but important topic for the entire supply and consumption chain of services delivered from the cloud.

Q: Why are you excited to attend this year’s HCTS?
A: I always look forward to catching up with colleagues, meeting new people, and hearing new, big, thought-provoking ideas.

Aaron is one of many 451 Research analysts returning to the main stage at HCTS, which will be held at the Bellagio in Las Vegas, September 24-26, 2018. Register for HCTS 2018 to hear all the speakers you have met thus far in our ongoing series, including the previous Q&A with Owen Rogers.
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