Cloud Hosting

Cloud storage was once primarily thought of as a place to keep data online securely or to host a website, but tech giants increasingly want their customers to think about what can be done with the data once its put there and, of course, to pay for services that manipulate it.

Large corporations have traditionally used servers to store big quantities of data that can then be analyzed for trends or to predict results. Now the cloud is also hosting analytic programs that smaller organizations can use to get much-needed results.

For example, a car insurance company could do instant on-site assessments: agents upload photos of an accidents damage through an app to the cloud where machine learning and artificial intelligence analyze them and quickly send back a quote. That eliminates the need to return to the office where it could take hours or days to do an assessment.

Or perhaps a small medical office in a remote community wants to do a screening for diabetic retinopathy by uploading a photo of the patients eye to a cloud-based machine-learning platform. The doctor would get instant results instead of sending a patient away to a larger city for a proper diagnosis.

The demand for such applications and others that save time and bring in more revenue is growing and the tech giants want a piece of the action.

Cloud is the great equalizer. It allows very small organizations to compete with very big organizations, said Jim Lambe, Google Clouds country manager for Canada. Historically, the big organizations beat up on the small ones, but now it is the quicker organizations that are going to beat up on the slower ones.

The worldwide public cloud services market is expected to grow by 18 per cent in 2017 to US$246.8 billion, according to a report earlier this year by research company Gartner. By 2020, cloud adoption strategies are expected to influence more than 50 per cent of IT outsourcing deals.

Google has long harnessed the cloud for its own web-based services such as Gmail, YouTube and Google Docs, but the tech giant decided to double down on the space after seeing the number of other companies that want their own cloud platforms to quickly grow.

Google said it considers itself one of the few which can properly lead the space given the high upfront cost for new entrants to develop the infrastructure, such as large data centres, needed to provide cloud storage.

If you are not already an incumbent with the DNA to do this, you cant really enter this market because you have lost the last 15 years, said Brian Stevens, chief technical officer of Google Cloud, in an interview during a recent visit to the companys Toronto office.

The size of the opportunity is well understood to be massive and Google believes this is going to be one of the biggest businesses, if not the biggest business, inside of Google sometime in the future. We feel like we are really set up for it.

Its not just Google that offers the cloud for both storage and data analysis. Other major players have existed in the space for just as long, if not longer. So far they have more market share, too.

Amazon.com Inc. helped pioneer cloud-based storage platforms by creating Amazon Web Services back in 2006. Microsoft Corp.s Azure debuted in 2010 and Google Cloud Platform came along in 2011 to round out the heavyweights, but others such as IBM and speciality companies like Box Inc. have been offering cloud storage solutions as well.

Amazon, Microsoft and Google in particular emphasize their computational and large-scale advantages rather than just their ability to securely host files.

Amazon is still the juggernaut with 40-per-cent market share as of February 2017, according to Synergy Research Group, but Microsoft is growing at twice the pace.

Google is also ramping up its efforts, opening data centres in new international markets such as Canada, something Amazon and Microsoft were already doing (the latter still leads the way with a presence in 42 announced regions).

Cloud is really driving the data centre expansion strategy for Google, Stevens said. Typically, there is a longer cycle for bringing up a new data centre, but now with cloud and, for example, places like Montreal, we are bringing up new data centres in under a year, which is pretty fast paced.

In addition to opening data centres within Canada which allows companies to keep sensitive information from leaving the country, important for regulated sectors such as banking and health care Googles myriad cloud initiatives have Canadian ties.

The tech giants Waterloo, Ont., office of about 500 has long been responsible for helping with web-based services such as Gmail, so the company has been looking north of the border for expertise as it focuses more on its Google Cloud offerings.

We have teams working here on a number of different efforts within cloud that contribute to the way that the Google Cloud platform will be successful for all of the different services around the world, said Derek Phillips, an engineering director at Googles Waterloo office and an 11-year employee with the company.

The Waterloo office is a big contributor to the success of cloud and this is a really good place for us to be as we have really been looking for other ways to make a big contribution to Google, Canada and the world.

Googles Montreal office also has engineers who work on cloud-related products (and others), but Waterloos advantage is its proximity to the University of Waterloo, one of the tech giants top schools for recruitment.

Canada is well positioned as a big contributor in this space. People have heard a lot about the cloud and they dont really know exactly what it means, Phillips said. There is a lot of ways Canada can contribute here and one way is on the engineering side and being involved in what is developed, how these things come together and how it serves customers all around the world.

The battle in the cloud is still in its early stages, but it is already fierce. Companies such as Google and Microsoft are playing catch-up with Amazon, but say their platforms have more appeal because they are companies known for their machine learning, artificial intelligence and algorithms. Amazon, though the market-share leader, isnt necessarily the first company that comes to mind for big data analysis.

Google also releases the source code to some of its cloud platforms for others to see, use and build upon, hoping to create a better end product and be recognized as a company that cares about the space, even if that means people take the code to a competitors service.

The company said it is important to be welcomed in the open-source community first and then business will follow.

We could have just said we have the best machine learning technology and you can only use it on Google Cloud. Instead we said no, we are going to open it up, Stevens said, adding that the response has been positive.

That gets you to a place where it has long-term sustainable impact for the end user and for us.

Financial Post

jomcconnell@postmedia.com Twitter.com/JoshMcConnell

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There's a lot more to the Cloud than storage these days and competition is getting crowded - Financial Post