The first quarter of 2016 wrapped up Thursday and to mark the occasion CIO Dive has pulled together stories that stuck out for us in Q1. Below are the stories that have greatest potential for long-range implications in the arena of enterprise technology.
1. The once heated battle between Apple and the FBI quickly cools
Apple fought the law—and the law found another way around the situation. When asked by the FBI, Apple refused to create a "backdoor" into its iPhone operating system, which led to a potential court battle.
A number of technology companies rallied behind Apple, maintaining that encryption is absolutely necessary to preserve privacy rights. And Apple dug in its heels. Byt the whole drama ended suddenly when the government announced it had managed to find a backdoor into the iPhone with the help of a third party and promptly dropped the case against Apple.
Though the revelation ended the current fight, there is likely much more to come. The Justice Department's discovery of an iPhone hacking technique raises a lot of questions about whether or not that information will be shared. If the agency shares the vulnerability with Apple, the company can move to remedy the software loophole, once again making the iPhone operating systems nearly impenetrable. And the company will want to assure its users that their iPhones remain secure.
While the debate between Apple and the FBI largely relates to consumer privacy, it could also have wide implications on the enterprise side.
"There are hardly any companies that aren’t engaged in data sharing of some sort with third party companies, such as vendors and contractors,” said Don Aplin, Bloomberg Law Managing Editor for Privacy and Data Security.
As companies share data, information from one enterprise can show up in another's database, "so access to one company’s data may well allow access to intermixed information from other companies," Aplin said. "In a Big Data environment, the risk of exposing intermixed data is conceivably more acute since the databases are so large."
In addition to data liability issues, the encryption debate has the potential to curb companies’ ability to leverage Big Data analytics in innovative ways that enable them to do things like develop new products or compete more effectively.
So while the current battle between the FBI and Apple may be over, the war is likely only beginning.
2. The rise of the cloud wars
Google, which has been criticized in the past for not taking cloud seriously enough, began a major push on cloud this quarter in hopes of catching AWS. In 2015, Google had just 4% of the cloud market share, according to Synergy Research, Reuters reports. The company fell behind AWS, Microsoft Azure and IBM, which each had 31%, 9% and 7% of the market, respectively.
Until now, Google has struggled to make headway with major enterprise clients when it comes to cloud. But in Q1 it managed to secure several major deals, including pacts with both Apple and Spotify— companies that previously relied exclusively on AWS for cloud services. In March, Home Depot said it will move some of its data to Google's cloud as well, while Disney Consumer Products Interactive Media and Coca Cola also said they were coming onboard.
The company made a slew of announcements at Cloud Platform Next conference in San Francisco, where Diane Greene, Google’s head of cloud computing, argued that Google's cloud platform is ready to compete with cloud industry leaders. Greene believes customers will choose Google because of the cloud platform's value, risk reduction and innovation.
Some attribute Google’s growing success in cloud to Greene. The former CEO and co-founder of VMware has extensive experience working with corporate clients. Google hired Greene last November.
But Google's efforts are not to be outdone by Microsoft and its Azure cloud platform. Thursday, at its Build developer conference, the company unveiled new developer tools meant to entice potential customers.
Developer tools are one of the ways competitors bait customers into using their services. Last week, for example, Google launched new artificial intelligence-based tools and products for its cloud platform. The tools will allow data scientists and developers to build intelligent applications and employ deep learning techniques.
Microsoft also boasted of Azure's growth and said the company is adding 120,000 new business customers and developer subscribers per month. The company also said it has 4 million developers registered to use its developer tools.
The moves from Google and Microsoft are sure to prompt its competitors to rise to the occasion, so we will likely see announcements about improvements or changes from AWS and IBM in coming months, as the stakes are raised in the battle to capture the billions of dollars companies of all sizes are looking to pour into the cloud.
3. Hospitals take a beating from hackers
Hospitals have suffered cyberattacks sporadically in the past, but Q1 saw a rash of serious attacks that left several hospitals reeling.
In late February, a cyber heist on Hollywood Presbyterian Medical Center in Los Angeles locked staff out of their systems. In order to regain access, the hospital had to pay the attackers 40 bitcoins, equivalent to $17,000, in exchange for a decryption key.
That same month, hackers held several German hospitals under ransomware, according to the German publication Deutsche Welle, including Lukas Hospital and Klinikum Arnsberg and others. In late March, MedStar Health Inc., one of the largest medical service providers in the U.S. capital region, was crippled by a virus. That attack took down an entire network of hospitals in one swoop.
Despite suspicions, MedStar refused to characterize the event as a ransomware attack. However, one employee sent the Washington Post an image of a ransom note that had popped up onto compromised computer screens. The note demanded 45 bitcoins, which is equivalent to $19,000 in exchange for a digital key so that network could regain access to the data.
No matter the tools cybercriminals use, many experts agree that longstanding cybersecurity deficiencies and lack of investment in preventative infrastructure could mean more cyberattacks in the future. Hospitals, and other areas of critical infrastructure, can work to ensure they are not an easy target by instead investing in secure systems and offering a quick response in the event of any detected threat.
4. Evolving tech giants. Is it too little, too late?
Q1 also saw large, mature tech companies continue their efforts to shift business strategies to survive the new tech landscape, which increasingly favors innovative, fast-moving tech providers.
Both Cisco and IBM—companies rooted in hardware and one-time purchase sales models—made big moves last quarter to try and pivot to cloud infrastructure and other subscription-based business models or to otherwise increase their services and product offerings.
Purchasing other companies, especially if they are already somewhat "proven," can give Cisco and IBM a short cut to new solutions or technologies. Over the past year, Cisco has made at least 17 acquisitions in areas such as cloud storage, video, analytics and security. In Q1, Cisco acquired Jasper Technologies, which provides an IoT platform to connect devices, reached an agreement with Pivotal Software to offer each other’s cloud computing products, and announced plans to purchase CliQr, an application management solutions provider for hybrid cloud environments.
Meanwhile, amid slumping stock, IBM has continued to move away from selling hardware, focusing more on cloud-based services, Big Data and mobile security, according to Reuters. In January, IBM purchased IRIS Analytics, a German company that specializes in preventing payment fraud through the use of analytics, digital marketing creative agency Resource/Ammirati and video conferencing startup Ustream Inc. In February, IBM announced it will work with VMware on a new cloud-based partnership.
But there was also speculation that IBM’s moves have come too little, too late. After all, the company can't live just on the profits of combining craft beer with Big Data. In March, IBM announced that nearly one-third of its U.S. workforce was being "rebalanced.” The exact number of employees losing their jobs is unknown. IBM has also seen changes in company leadership. In February the head of IBM’s cognitive computing group, responsible for Watson, left the company after just nine months.
Moving forward, we are likely to see much more pivoting from mature tech companies. Some will survive and others won't as new models of developing and delivering technology continue to evolve.
