Microsoft is hosting its 13th annual Cloud and Hosting Summit this week in Bellevue, Wash., bringing together nearly 500 partners across different business models to explore digital transformation at work.

The conference kicked off with a presentation from Aziz Benmalek, Microsoft VP of worldwide hosting & managed service providers on Wednesday, who shared some findings from a survey it conducted recently with 451 Research.

When it comes to end-customer cloud transformation projects, service providers are vital, Benmalek says, and 89 percent of customers said they are willing to pay a hefty premium to have a service provider help them manage and implement their hybrid cloud.

That puts you at the center of the opportunity as we move forward, Benmalek said.

Benmalek told the audience that Microsoft has seen double-digit growth in its Hosting & Managed Services over the past five years.

This ecosystem is one of the fastest growing channels [for Microsoft], Benmalek told Talkin Cloud in an interview. All signs are showing continued growth in that space.

Amy Hood, Microsoft CFO, said that the companys hosting and cloud partners have helped it get to where it is today.

You have lots of people you could partner with and were deeply thankful that you partner with us, Hood told the audience at Microsoft Cloud & Hosting Summit 2017.

Partners with region-specific, vertical-specific, and business process-specific knowledge help Microsoft reach customers they wouldnt be able to on their own, she added.

We will never have that depth of knowledge that you all have, she says. Our job is to empower people and organizations to do more empowering you all to take your IP and your knowledge and be more successful.

Microsoft, 451 Research Report Highlights Demand for Hybrid Cloud, Managed Services

For the third year in a row, Microsoft commissioned 451 Research to conduct a report. This years version, Digital Transformation Opportunity for Service Providers: New Paths to Beyond Infrastructure looked at the opportunities around hybrid cloud and managed services.

We have tens of thousands of partners from around the world that are delivering hybrid solutions, Benmalek said in an interview. Hybrid business is here and growing from a customer demand point of view.

According to the study, for North American respondents, top adoption drivers of hybrid cloud include flexibility and choice, extending IT resource capacity of existing on-premise infrastructure, and maximizing ROI on existing on-prem IT investments while being able to use public cloud for new applications and workloads.

These new hybrid environments are becoming more complex and pushing customers to lean more heavily on service providers to provide managed services.

Managed services are becoming king, Benmalek said. Customers are looking for service providers to run the whole stack for them, including looking for managed services around DevOps, end-to-end application management, proactive capacity planning, and more, he said.

So who are the service providers that are going to win the most from organizations looking for these types of managed services? According to Microsoft and 451 Research, 57 percent of North American respondents said they would rely on an MSP or a managed hosting provider, 54 percent a public cloud IaaS provider, 53 percent a security service provider, and 51 percent would look for a consulting/IT outsourcing/systems integrator to help them in their hybrid/multi-cloud journey.

North American respondents were split on the number of service providers or vendors they would like to work with on hybrid cloud. Thirty-nine percent said that they would like to obtain hybrid cloud by purchasing individual services from multiple providers and vendors, while 36 percent said they would look for an integrated multi-vendor solution built and managed by one service provider.

Last year, the five most popular managed services were backup and recovery, archiving, infrastructure/application monitoring and alerting, disaster recovery, and managed networking and CDN. In 2017, the most popular services will be similar, except for the addition of premium 24/7 support services, suggesting service providers like Rackspace are on to something.

According to the report, organizations will also be increasingly looking for professional services to help them reach their goals around digital transformation, including integrating legacy business processes and systems with SaaS functionality, and modernizing applications.

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Microsoft Wants to Help MSPs Win in Era of Hybrid Cloud and Digital Transformation - Talkin' Cloud

Microsoft's new partnership with Adobe touches on cloud computing and CRM data.

LAS VEGAS Adobe's technology partnership with Microsoft will help businesses connect with customers in richer ways because it combines cloud infrastructure, Software-as-a-Service (SaaS) and data analytics technology.

Scott Guthrie, executive vice president of the cloud and enterprise group for Microsoft, shared those insights this morning on the main stage here at the Venetian Hotel as Adobe kicked off its digital marketing conference. Adobe is hosting 12,000 attendees this week for its annual week-long Adobe Summit.

Adobe used the Day 1 keynote today to showcase its partnership with Microsoft, first announced six months ago its Microsoft Ignite. The partnership features integrations between the newly announced Adobe Experience Cloud and Microsoft Azure, Dynamics 365 and Power BI.

From Microsoft's perspective, the partnership is another way to boost its data and cloud-hosting play and help get ahead of Salesforce, Oracle and Amazon.

For Adobe, which has 15,700 employees and $5.9 billion in revenue last year, it's a chance to improve its reported weakness in cloud hosting offerings.

The announcement that Adobe Experience Manager Sites Managed Service is now available on the Microsoft Azure cloud computing platform drew perhaps the loudest applause from the audience during the morning keynote.

Forrester in its Wave report on web content management technologies gave Adobe low marks for its cloud strategy, calling it a weakness because the "only option is a managed hosted flavor of Platform-as-a-Service (PaaS)."

But Adobe pushed today its vision for an API-based technology ecosystem, a better exchange framework with third-party integrations and a flexible cloud hosting architecture on Azure.

Adobe CEO Shantanu Narayen promised the morning crowd his company will "step up" because "we know your transformation requires more than digital marketing technology."

"Every organization is out there looking to enable deep digital transformation and engage its customers fundamentally in new ways," Guthrie said. "Data is in many systems across the enterprises in silos. It's difficult to combine it and gain insight."

Specifically, the Adobe-Microsoft partnership:

Abhay Parasnis, executive vice president and chief technology for Adobe, said businesses spend far too much time "solving for broken internet systems."

Microsoft's Guthrie, who shared the stage with Parasnis in the three-hour keynote, agreed these are problems Microsoft hears "over and over." Its partnership with Adobe will help common customers solve common system problems.

The integrations, he said, helps organizations combine business data and take the outcomes into a CRM pipeline for "rich data visualization."

Guthrie added customers can host data in one of Microsoft Azure's 38 regional data centers and deploy code that will keep data inside those centers.

The new partners also announced a collaboration on a semantic data model that will standardize how data is structured and improve the time it takes to gain insights.

AppDynamics, Acxiom, Dun & Bradstreet, Qualtrics, Zendesk, [24]7 and MasterCard are helping Adobe and Microsoft develop the new data model and build apps for a common language. Officials promised an update at Microsoft Build 2017 on May 10-12.

Adobe executives also used the morning keynote to show their focus on becoming an "experience business" versus just digital marketing.

It did away with its "Adobe Marketing Cloud" overarching branding approach and now goes with "Adobe Experience Cloud." Marketing Cloud is now just one pillar of the Experience Cloud along with Analytics Cloud, Advertising Cloud, Creative Cloud for Enterprise and Document Cloud for Enterprise.

Adobe CEO Narayen called the experience business a "massively bigger opportunity for all of us" over digital marketing alone.

The experience business makes technology transparent and allows consumers to set their terms for interactions, said Brad Rencher, executive vice president and general manager for Adobe's digital marketing business unit.

Rencher, speaking to this morning's keynote audience, said delivering experiences is no longer a marketing charter. All departments are "stewards of experience," he said.

He plugged the Experience Cloud, telling the audience they "need Adobe Experience Cloud" because of its products, services, extensibility and robust partner ecosystem.

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Microsoft, Adobe Partner to Boost Analytics, Cloud Hosting - CMSWire

SUMMARY:

OakNorth Bank, the first in the UK to run 100% in the cloud, recounts why it made the move and lessons learned from the experience

In May last year, with the ink still drying on the regulators guidance for cloud-hosted banking, OakNorth Bank became the first bank in the UK to bring its core systems live in the cloud.

The challenger bank had always wanted to run in the cloud, but at the time of its launch in March 2015 the regulator wasnt ready to allow cloud hosting. So OakNorth started out with a system that ran as a SaaS solution, hosted in a private data center. Once the regulator gave the go-ahead, the bank migrated its systems to a virtual private cloud hosted on Amazon Web Services.

The decision to run in the cloud was made for business reasons, says the banks Chief Operating Officer Francesca Gandolfo:

We look at technology for the value it brings to the business, not for the gimmicks. We went to cloud because we believe it fundamentally helps our business model.

The bank reached break-even in August 2016 and tripled its loan book in the second half of 2016, profiting from a slowdown in lending by established banks in the wake of the unexpected Brexit vote in June 2016. Its smaller size allowed it to reassess the risk environment quickly and continue lending while others retrenched, says Gandolfo.

OakNorth specializes in lending to entrepreneurs for business ventures and property schemes. It has taken 250 million ($310m) in retail deposits from 7,000 savers and its loan book is in excess of 300 million ($372m), says Gandolfo.

She reels off a list of reasons for adopting the cloud, from flexibility, scale and creativity to security, cost, and being able to focus on the core business of banking.

Being an infrastructure host is not our core business. Why did we break even? Because of laser-like focus on things that drive the business.

Cost stands out as a key element, although not merely in terms of saving money. We have a cost which is fit for purpose, she says. The bank is free to upgrade or downgrade to suit the business, she explains, able to spend more when needed, while saving money on other elements that dont have to be state-of-the-art.

For example, when introducing new capabilities, its better to over-provide resources so that theres enough headroom for unexpected demands, she explains:

Dont try to optimize from day one. If you stay too much skin-to-the-bone, things will fall over and fail. Do the right trade-offs.

Looking back, replatforming to AWS was a valuable learning experience, she says:

There are a few things we would have done different, but I would not go back and redo it because we learned a whole lot.

There is a huge amount of value in experimentation. Give people the freedom to try things and fail. There is some value in failure but controlled failure, not reckless failure!

And she doesnt rule out the possibility of replatforming again should the need arise:

We rebuilt the bank twice within a year. I think we have this down to an art. We want to make sure we are robust and have our destiny in our hands.

An interesting insight into the factors that come into play when migrating traditionally on-premise functions to the cloud.

Image credit - Sourced from OakNorth Bank

Disclosure - Francesca Gandolfo was speaking at Cloud Expo Europe

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Lessons learned at the UK's first 100% cloud bank - Diginomica

At its InterConnect conference in Las Vegas this week, IBM is announcing new features for its open source cloud-hosted blockchain service in an attempt to bring this distributed database technology from its initial use of powering Bitcoin to a broader market, including the financial services industry.

Blockchain is a distributed database that maintains a continually growing list of records that can be verified using hashing techniques. Vendors such as IBM and Microsoft are attempting to commercialize it by offering customers a platform for hosting their own implementations. Analysts say the market to do so is just emerging.

+MORE AT NETWORK WORLD: The future of networking is in a white box | How to get the most out of data and services in a multi-cloud world +

IBM has supported blockchain implementations for more than a year, but this week the company is announcing a beta version 1.0 of its service, which is based off the open source Hyperledger Fabric a Linux Foundation project. Its available in IBMs Bluemix Cloud. IBM says Hyperledger can process up to 1,000 transactions per second.

Also new in the 1.0 version are a series of tools that IBM says will make it easier to manage blockchain implementations. These include policies for administrators to set up blockchain networks, assign roles and levels of visibility, manage membership and enforce compliance.

IBM is also launching a Fabric Composer, which is a platform for making APIs that integrate with the hosted blockchain service. The idea is that IBM would host the secure, cloud-based infrastructure that blockchain implementations would run on.

Forrester Research Principal Analyst Martha Bennett says these are significant steps toward adding enterprise functionality to this technology, but there are many steps that need to follow.

Despite the significant amount of hype around blockchain, Gartner Research Director Rajesh Kandaswamy says the market is still in its earliest stages. Its a really interesting market because there is so much potential, he says. At the same time, theres this disconnect between the work thats in trials and proof of concept versus what is going on in production.

Blockchain implementations have a handful of defining characteristics, Bennett says: Its a write-once and append-only system (meaning records in the database cannot be changed, records can only be added to the ledger); its distributed and at least partially replicated in multiple locations; its crypto-secured through a public or private key infrastructure and it uses hashes.

The hash functionality is particularly important, Bennett notes. Each individual transaction is hashed into the chain, and each block, which contains a bunch of transactions, is also hashed, which links it to the previous block, she explains. The moment anyone tries to change a transaction, everyone who has access to the chain would know immediately that its been tampered with because the hash wouldnt match.

This creates a platform where multiple parties can share data, but all have proof that past records have not been changed. Its quite a remarkable platform, but its in the very, very early stages of maturity, she says. The fact that IBM has commercialized the 1.0 version of Hyperledger fabric in Bluemix and introduced some management tools are good steps, she says.

Kandaswamy cites Gartner estimates that blockchain could produce $176 billion in business value-add by 2025. Most of the initial blockchain trails have been in the financial services industry, but he says use cases are expanding, especially in the area of supply chain management for retailers, manufacturers or any company that needs to track a product life cycle in a secure way with multiple parties.

IBM cites a customer in Beijing its been working with named Energy-Blockchain Labs, which created a carbon credit asset management system based on IBMs blockchain offering. Other customers IBM cites include startup Everledger, Bank of Tokyo-Mitsubishi UFJ and Northern Trust.

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How IBM wants to bring blockchain from Bitcoin to your data center - Network World

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IoT edge computing presents next big challenge for cloud - TechTarget