HSBC has become the first financial institution to move Corda Enterprise onto Google Cloud, promising reduced client onboarding times and costs.

The bank uses Corda, from R3, for its custody blockchain platform, Digital Vault. The service, launched in November 2019, digitises the transaction records of private placement assets, from equity, to debt, and real estate.

Moving to Google Cloud, HSBC noted, will enable the company to move more of the ‘transaction lifecycle’ onto the ledger in future, including the issuing of digital tokens instead of paper certificates.

“Being the first organisation to move Corda technology to Google Cloud is a further sign of HSBC’s commitment to blockchain and cloud technologies,” said Gaurav Aggarwal, HSBC head of distributed ledger technology and tokenisation, markets and securities services in a statement.

Derek White, VP global financial services at Google Cloud, added: “As HSBC prepares for the future of banking, we are proud to provide the speed, scale and security of the best cloud technology to connect consumers, businesses and ecosystems in new innovations.”

HSBC has had a long history with both R3 Corda and Google Cloud. As far back as May 2018, the bank was hailing a ‘groundbreaking live trade finance transaction’ on the Corda platform, facilitating a bulk shipment for food conglomerate Cargill. This time last year, the company announced it had put $10 billion of paper-based private placement records on Corda.

With Google Cloud, HSBC has long since been a flagship customer. The company’s presence at Next 2017, alongside Colgate and Verizon, helped signal Google Cloud’s enterprise ambitions to the wider market. In July, HSBC reached a ‘long-term strategic cloud agreement’ with Amazon Web Services (AWS), though CloudTech understood at the time the bank’s relationship with Google Cloud remained.

HSBC has also committed to a cloud roadmap by virtue of its relationship with CloudBees. The bank invested $10 million in capital investment to the CD software provider and Jenkins arbiter in 2019.

Technology has enabled businesses to continue operating this year, and the cloud has taken center stage — going forward, it will only play a larger role in the enterprise.

According to CloudTech, public cloud spending is expected to grow from US$229 billion in 2019 to US$500 billion in 2023, with a compound annual growth rate (CAGR) of 22.3%.

Key players Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and Alibaba, and are expected to grow yet bigger, and by the end of 2021, 60% of companies will leverage containers on public cloud platforms and 25% of developers will use serverless.

As this market continues its growth and evolution, here are three trends to watch in 2021.

Serverless computing
A cloudless server is a technology that implements functions in the cloud on a necessary basis. Enterprises rely on serverless computing because it provides space to work on core products without the pressure to operate or manage servers. Microsoft CEO Satya Nadella favors serverless cloud and he believes serverless computing can not only respond and focus on back-end computing but also become key to the imminent future for distributed computing.

Serverless was among the top five fastest-growing PaaS cloud services for 2020, according to the Flexera 2020 State of the Cloud report.

Hybrid cloud joins providers
Choosing between public, private, or hybrid cloud environments, has proved challenging for some organizations — each offers advantages and disadvantages when it comes to flexibility, performance, security, and compliance.

According to Gartner, in 2019, the actual number of companies using hybrid cloud was 58%, up 6% from 2018. Hybrid cloud benefits include speed, control, and security. In terms of speed, it optimizes the network to reduce the latency and speeds up the data so that it can reach where it needs to be. For control, companies can customize the end of their hybrid cloud model, optimize it, and adjust it according to their needs rather than trusting a third-party cloud provider.

The continued demand for hybrid cloud could lead the world’s biggest providers to partially break out from their walled garden approach. By collaborating and introducing some interoperability, they can continue to satisfy multi-cloud demands. This will enable better data sharing and access between partners, who may be working across diverse applications and standards.

Virtual Cloud Desktops
A virtual cloud desktop refers to the software requirements of a device being fully managed by cloud service providers. The user just needs to have a screen and some basic hardware while the rest of the processing power will be seamlessly handled by cloud-based services.

Virtual cloud desktop users only pay on cloud usage, eliminating costs associated with acquiring powerful new hardware, updating the existing hardware, and the disposal of redundant computing equipment.

Sometimes known as desktop-as-a-service, this model of computing is offered by Amazon via the Workspaces platform and Microsoft with Windows Virtual Desktop. Google also offers functionality through its Chromebook devices. In practice, this can increase efficiency across a workforce by ensuring everyone is using up-to-date, synchronized technology.

The hyperscale providers continue to dominate the cloud infrastructure and hosting market. According to industry watcher Synergy Research in May, the combined market share of Amazon Web Services (AWS), Microsoft and Google alone was 56%.

Yet one area has the potential to cause concern – and it has pricked the ears of other players looking to capitalise.

In August, CloudTech reported on the ending of the Privacy Shield agreement by the European Court of Justice (ECJ). The EU-US initiative aimed to ‘provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements in support of transatlantic commerce’. Yet this was ruled as invalid by the ECJ after a challenge by privacy advocate Max Schrems, citing inadequate US security laws.

The use of Standard Contractual Clauses (SCCs), a mechanism used by companies to move EU user data to the US for processing, was not explicitly curtailed as part of the ruling. Legal experts saw this as a reprieve in name only, without additional protections from US government surveillance. The European Commission is to issue new SCCs and guidance by the end of this year.

This concern has been brought about partly through the the US CLOUD Act (Clarifying Lawful Overseas Use of Data), passed in 2018, which enables US government agencies to ‘ask a US court to issue a warrant demanding that suppliers subject to US law hand over data they store for customers, even if that data is stored outside the United States, including the EU.’

The result is that companies are questioning their relationships with the US-headquartered hyperscalers. For cloud providers such as IONOS, part of the web hosting brand 1&1, an opportunity has clearly arisen.

“We’re CLOUD Act-safe because we’re based out of Berlin,” Sab Knight, UK & Ireland head of sales at IONOS (left), tells CloudTech. “If the US authorities knocked on our door and said [they] wanted a client’s data, the best case is they would need to go to the German authorities and subpoena them.”

The selling point for smaller, niche providers traditionally comes in the form of lower latency and – to a certain extent – data sovereignty. IONOS cloud platform is aimed at small and medium businesses promising “transparent prices, maximum data privacy in certified data centres, an unbeatable backbone connection, simple use… and reliable live vertical scaling.”

For Knight, informing clients and prospects of these enhanced opportunities forms a large part of his team’s role. “You’d like to think my sales team should just concentrate on selling cloud solutions, but today it’s actually about educating clients more about their data and data privacy, Privacy Shield, and GDPR,” he says. “I spend more time training teams about these arguments and conversations; the technical bits are now more led by solution engineers than salespeople.”

Knight also looks to educate in a more general sense by speaking at industry events, including the Cyber Security & Cloud Expo, in March next year. At one event, Knight recalls how one attendee ‘came over with his mouth open… [he] just didn’t realise the gravity of the situation he was in.’

Yet for companies such as IONOS, they are not just competing against the panoply of features the hyperscalers possess, but the brand recognition. You may have the best thing since sliced bread, Knight notes, but if you’re not AWS, then you hit a brick wall.

“It’s like the 1980s when IBM was selling these really expensive computers, and you’d find these IBM-compatible machines for a fraction of the price,” he says. “Yet a manager back in the 80s would just buy IBM because you wouldn’t get fired for buying IBM.

“I’ve come across that same conversation – ‘no offence, but you’re not AWS. If [I] have an outage with IONOS, my boss is going to sack me, but if I have an outage with AWS, they’ll just give me a slap on the wrist,’” Knight adds.

IONOS has written extensively on its company blog around the perceived threats of the CLOUD Act, GDPR and Privacy Shield. In one post, from this time last year, the company noted the CLOUD Act ‘clearly contradicts the aims of the GDPR.’ “In a globalised world, the law is ever more complicated, and ever more important. But the advantages of digitisation are something that no company can do without,” the company wrote.

“There are European providers who operate their cloud solutions in accordance with European data protection regulations. Trusting a business partner, as well as having the possibility to effectively enforce legal disputes ensures digital control and security for your business – even for medium-sized companies that do not have a large legal department or the resources to expand for one.”

Knight is keen to stress that these claims should not just be taken at face value – due diligence and research is required on the legal ramifications. The hyperscalers, particularly after the Privacy Shield ruling, said they could back up claims of their clouds’ security and privacy, be they AWS, Azure or Google.

Yet Knight again looks back in time to envisage how things will move forward. “If you look back in the 1990s, it was mainly American companies that were doing all the hosting,” he explains. “Small UK hosting companies then started to appear, saying ‘why host in the US where there are terrible latencies?”