Thursday, September 15th, 2016

Time	Event
3:08p	Google Must Have Some Reason for Buying Apigee, Right? (Bloomberg Gadfly) — Google’s list of stellar acquisitions includes YouTube, Android, DoubleClick. And now it’s going after…Apigee? Google said it’s buying the software maker for $625 million. It’s hardly a blockbuster purchase, but it’s large enough to stand out for Google, which doesn’t often make acquisitions of much size. The internet search giant has announced only 23 takeovers with publicly disclosed price tags of more than $100 million. The Apigee deal is the largest since Google acquired Nest Labs in 2014 for $3.2 billion. Why Google had this particular company in its sights may have some shareholders scratching their heads (shares of Google’s parent Alphabet fell in early trading). Apigee has struggled financially since it went public. Its track record of unprofitability stands out even among a group of money-losing North American software peers, with operating and Ebitda margins well below the low bar that serves as a median for that contingency. It lags behind the pack by other measures as well: But Apigee is in a hot — if dull — corner of technology. The company focuses on APIs, essentially software middlemen that coordinate what’s happening on, for example, a mobile-banking app with the bank’s back-end computer systems. APIs are essential components for most activities in the contemporary digital world, and while Apigee’s revenue is small at less than $100 million, it is growing quickly. That said, API is already a crowded area with traditional tech players such as IBM and Oracle involved, as well as a host of upstarts including 2016 IPO darling Twilio. It’s difficult to assess if Apigee has some magic technology that is absent at Google, a company that is darn good at APIs in its own right. Above all, the deal shows that Google is willing to open its wallet to help its cloud business, a renewed focus (maybe) for Google under new boss Diane Greene. She and Google have made a lot of noise about how they want to challenge and exceed industry leader Amazon Web Services, but so far the number of press clippings about Google’s cloud operation probably exceed the business’s actual revenue. Google is offering a paltry-looking 6.5 percent premium to Apigee’s stock price on Wednesday. However, shares of the target had run up some 44 percent since June as takeover speculation heated up. Interestingly, Google’s bid gives Apigee shareholders the chance to cash out at roughly the same price at which the company went public less than 18 months ago. Not a bad deal considering analysts were running out of reasons for Apigee to continue rising on its own. Even so, shares of Apigee traded above Google’s takeover price for much of Thursday morning, suggesting at least some traders are wagering on a higher offer. Google is already valuing Apigee at about 7 times its trailing 12-month revenue, roughly double the median for software takeovers of size in the last year. But if the strategic value is enough that Google has deigned to bid on the company, rivals may not worry too much about the mathematics. –Rani Molla contributed graphics to this article. This column does not necessarily reflect the opinion of Bloomberg LP and its owners, as well as the opinion of Data Center Knowledge and Penton. (Comment on this)
4:01p	Mirantis Makes Key Acquisition in Containerized OpenStack Space If anything distinguishes a commercial OpenStack service from just downloading the open source code from the Web, it’s the level of quality for how the cloud services platform is managed.  In a move that may rapidly accelerate its already publicly announced plans for a “Universal Resource Scheduler,” commercial OpenStack service Mirantis announced Thursday it is acquiring a Czech Republic-based project called TCP Cloud, whose latest Mk.20 platform release is said to have already resolved the most critical issue facing cloud providers today. “If you talk to customers, they will tell you that lifecycle management is the bane of OpenStack,” Mirantis CEO Alex Freedland said in an interview with Data Center Knowledge.  “This simplifies it by orders of magnitude.” Mk.20 will enable Mirantis customers to install the variety of OpenStack component packages — with their varying feature sets, depending on the currency of their versions — using a simplified self-provisioning model.  In tests with existing Mirantis customers, Freedland said, Mk.20 already did something successfully that Mirantis was looking to do eventually: let customers pick their own OpenStack configurations, and in so doing, allow the infrastructure-as-code from those choices to be stored in easily-retrievable GitHub repositories. “This is the area where these guys are the utmost experts — probably better than anybody in the world,” admitted the CEO.  “They can do this generically, but they understand how to apply it to OpenStack, to [Juniper’s] Contrail, to Kubernetes.  They’ve done this, and they’re about nine months to a year ahead of us.” A Little of This and That What Freedland is explaining is essentially a containerized form of OpenStack: a means of automating the deployment of the infrastructure platform components that support the delivery of cloud services to customers under a continuous release (CR) model.  That’s a little different from continuous delivery (CD), where software is continually being updated under the hood. Modern software (what some would call the “cloud-native” variety) is made up of components, which in the extreme case (microservices) could be scattered across servers.  OpenStack is an assembly of separate infrastructure projects for specific purposes (e.g., pooling compute power, setting up a storage volume, providing for SDN), all of which communicate with one another using APIs.  This “loose coupling” has been key to the evolutionary success of the platform so far; each component can evolve independently of all the rest. But it’s that independent evolution that makes the platform so difficult to manage, even for IT professionals with the requisite skills.  An automated delivery system would enable an organization to test, deploy, and if necessary, roll back the implementation of specific parts on its own itinerary, without endangering its own service levels. This is what Mirantis claims TCP Cloud Mk.20 provides, even going so far as to say Mk.20 does a much better job than anything Mirantis itself has produced — thus necessitating today’s acquisition just to remain competitive. What Mirantis is acquiring, though, is perhaps the dream configuration of many enterprise data centers: a containerization scheme for OpenStack itself.  Mirantis, CoreOS, and Intel have been working together on such a project since the early spring.  Their goal is a system that places conventional VMware-style, or KVM-style, virtual machines on an equal footing with Docker-style containers.  An open source orchestrator such a Kubernetes could theoretically be used to schedule and stage both classes of workloads. But assimilating Mk.20 may advance their goals for this project by at least nine months, making next calendar year more feasible than ever, Freedland said. Continuous Release “Kubernetes becomes a generic logistics tool that can move those containers throughout the lifecycle,” Freedland explained.  “And that’s the beauty of this:  Once Kubernetes builds a base CI/CD generic pipeline, it’s not really OpenStack-specific.  There are certain rules that you build inside that are pertinent to OpenStack, but you can do the same thing with other bits.  You can deliver Contrail the same way, Ceph the same way, and then beyond that you can add Hadoop pieces, [Apache] Spark, or whatever else you need.” Many enterprises are experimenting with integrating OpenStack with their CI/CD platforms today, with varying results.  We asked Freeland whether Mk.20 would enable enterprise customers to pick and choose specific OpenStack components on an a la carte scheme. “Of course,” the CEO responded.  “In fact, you’re talking about the people who already think of OpenStack in a continuous delivery fashion.  These are probably the folks who build their own internal pipelines, and they decide which components are ready or not. “These are the forward-looking people who understand how to operate agile infrastructures,” he continued, “and they don’t depend on a vendor to package a complete experience.  They’re the top five percent [of customers].  What we’re doing is, we’re industrializing it and making sure that we can deliver the same experience to people who don’t have this level of expertise.” Freedland explained that Mk.20, under Mirantis, will present the OpenStack deployment scenario to customers in a pipeline fashion, in keeping with CI/CD protocols.  Each pipeline will have a set of one or more configuration parameters available for each pipeline, depending upon how the other pipelines are scheduled.  An underlying logistics engine will decipher how to make each parameter workable in the given scheme, and a parameter won’t be offered if it’s not feasible. “This is the only way to manage that complexity in a flexible way,” he said. Mirantis announced it will begin delivering Mk.20 as part of the Fuel deployment component, with the next version of its Mirantis OpenStack distribution.  A revised schedule for that release has yet to be shared with contributors. (Comment on this)
4:30p	Average Security Incident Costs SMBs More Than $85,000: Report Brought to You by The WHIR The average cost of a security incident for large businesses is $861,000, and for SMBs is $86,500, according to new research from Kaspersky Lab. The report, Measuring the Financial Impact of IT Security on Businesses, released this week, details the financial impact of security breaches and what companies around the world are doing about it. The report is based on the 2016 results of the annual Corporate IT Security Risks survey, conducted by Kaspersky and B2B International. The survey included 4000 respondents from different sized organizations in 25 countries. Roughly half of businesses in the U.S. (49 percent) and globally (52 percent) assume that their IT security will be breached sooner or later. This is a recognition of reality, as 77 percent of U.S. businesses and 82 percent globally have experienced between 1 and 5 seperate data security incidents in the last year. See also: Cybercrime Fastest-Growing Cause of Data Center Outages Over one-third of businesses (38 percent) have lost productivity to malware or viruses in the last 12 months, while 36 percent have had inappropriate IT resource used by employees, and 21 percent have experienced data loss or exposure caused by targeted attacks. Additionally, close to 3 out of 10 companies physically lost a device containing data. Of all security incidents, 43 percent resulted in data loss or exposure of some kind, adding significantly to the high cost of incidents. The largest area of additional cost from security incidents is additional wages for IT staff. Considering the costs breaches entail, it makes sense that SMBs are particularly concerned with security when selecting cloud hosting providers, as indicated by a recent survey. A survey of SMBs in the U.S., U.K., and Australia released late last year by Webroot suggested their cybersecurity budgets would increase by 22 percent this year. In part because of the difference in overtime costs, fast recognition of a breach greatly reduces cost, with attacks recognized over a week later costing almost four times as much for SMBs and almost three times as much for enterprises as those recognized nearly instantly by a detection system. Shockingly, 1 in 10 U.S. businesses said it can take up to a year to discover a breach. See also: Study: Number of Costly DoS-Related Data Center Outages Rising “The survey proves that reaction time post-breach has a direct impact on financial losses,” Vladimir Zapolyansky, Head of SMB Marketing, Kaspersky Lab said in a statement. “This is something that cannot be remedied via budget increases. It requires talent, intelligence and an agile attitude towards protecting one’s business. As a security vendor, our goal is to provide tools and intelligence for businesses of all sizes, keeping in mind the difference in ability to allocate security budgets.” It security budgets are increasing, however, by an average of 14 percent over the next three years. Similar numbers of enterprises (48 percent) and SMBs (42 percent) see IT infrastructure complexity as a driver of security budgets. Enterprises are more impacted by hacktivism, while SMBs have a higher proportion of exploitation of mobile devices. (Comment on this)

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