The company has come under criticism for not having a European data center in the past, largely due to compliance issues – Salesforce is part of the EU-U.S. Safe Harbor framework, which means it’s allowed to handle European citizens’ personal data, but many customers would prefer the certainty that a locally sited data center allows. (We will be discussing such issues at our Structure:Europe conference in London on 18-19 September, by the way.)

Salesforce said last year that it hoped to open a data center in the UK in 2013, but this appears to have been pushed back a little now. According to a statement today, the new data center – the firm’s sixth — will be completed in 2014 in partnership with NTT Communications’ local arm, NTT Europe.

In a statement, Salesforce CEO Marc Benioff said Europe had provided the greatest revenue growth – 38 percent — for the company in the 2013 fiscal year:

“We are doubling down on Europe with the announcement of our new data centre in the UK, which will support continued customer success in EMEA.”

Robin Balen, NTT Europe’s wholesale data center business chief, added that the new facility would be “powered 100 percent by renewable energy sources.”

Innovation Challenge

Meanwhile, Salesforce has also teamed up with a group of European venture capital firms – Notion capital, Octopus Investment and MMC Ventures – to launch a €5 million ($6.6 million) Innovation Challenge for startups.

Startups are invited to pitch their enterprise cloud apps that could run (surprise!) on Salesforce’s platform. There will be pitching events through Europe between September and November, and the winners will get seed funding. Apps will need to be at least in the beta stage, with demonstrable “traction, customer success and user adoption.”

“This is a unique opportunity for innovative start-ups in the enterprise app market here in Europe to receive commercial support to allow them to compete on a global stage,” Octopus principal Luke Hakes said in a statement.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Google and the Ghost of Silicon Valley Past
• AWS Storage Gateway jolts cloud-storage ecosystem
• Will cloud computing push the BRIC market to the front?

For its part, FinQloud is about what it sounds like. According to a Nasdaq press release announcing the service:

“The platform combines AWS’s secure, flexible, and cost-effective cloud infrastructure with NASDAQ OMX’s experience in providing technology and advisory services to exchanges, regulators and broker-dealers that operate within a complex global regulatory framework. FinQloud may be used by a variety of financial services firms managing data not only from NASDAQ OMX but also from any number of sources.”

In order to meet stringent regulatory compliance requirements, all data connections to FinQloud will pass through an encryption system housed in a Nasdaq data center before making their way to AWS’s infrastructure, and use of R3 will be contingent on clients showing appropriate documentation to regulators.

FinQloud won’t be the financial services industry’s foray into public cloud computing, though. In 2011, the New York Stock Exchange rolled out a cloud platform called the Capital Markets Community Platform that focuses on speeding access to trading data from markets around the world. For years, Wall Street firms have been taking advantage of cloud computing’s easy access to on-demand servers to run compute-intensive risk analyses.

However, perhaps a bigger deal for AWS than FinQloud itself is what it says about how AWS — and other cloud providers — might go about getting into the business of targeting individual industries, especially heavily regulated ones. Close partnerships like AWS appears to have with Nasdaq, which technically is the one selling FinQloud, could help cloud providers establish toeholds in lucrative markets such as financial services without requiring them to stray too far from their general-purpose nature. Cloud providers supply the infrastructure, a market player provides the industry expertise, compliance features and a trusted face, and, in theory, everybody wins.

Feature image courtesy of Shutterstock user emin kullyev.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The fourth quarter of 2012 in cloud
• How direct-access solutions can speed up cloud adoption
• The role of converged infrastructure in the data center

By next year, more businesses will  know a good bit about the notion of cloud computing — even if they themselves haven’t put corporate applications or data onto public or private cloud infrastructure. C-level executives and their operational troops have at least read up on the subject and faced enough sales pitches that they can differentiate the real from the bogus. And I would bet they all have a passing knowledge of the potential benefits (moving budget from capital expenditure to operational expenditure, the pay-as-you go model, etc.) from the pitfalls (IT cedes control of infrastructure to an outsider) of cloud computing.

In his top 10 cloud predictions for 2012, Forrester Research analyst James Staten said the upcoming year marks the beginning of cloud computing’s “awkward teenage years.” That means there will be some real maturation — and some embarrassing slip ups.

On the plus side, he agrees cloud-savvy customers will mean an end to annoying “cloud washing.” That’s the practice in which a marketer cloaks his or her company in the mantle of cloud computing whether it’s applicable or not.

Also good news is that cloud IT posers will be discovered and shunted aside as more people get trained and gain real experience on cloud deployments. IBM, Hewlett-Packard, EMC and others are all stepping up here. There are more openings for cloud experts than cloud experts to fill them, but new training and certification will address that imbalance: all good things.

Not so good is the prospect of cloud failures. The message here is: Things break; get used to it. “Your company will survive a major cloud outage,” Staten states.  ”The sooner you learn to deal with [that] the better off you will be.”

Also scary: There are some ugly regulatory issues on the horizon. Much as parents try to rein in unruly teenagers, governments will try to control the spread of cloud computing. Just as the U.S. Patriot Act gave international companies pause before deploying cloud assets in the U.S., other attempts to regulate, ban or spy on cloud computing assets will constrain growth.  A few months ago, for example, a Deutsche Telekom exec proposed a German cloud that would be safe from U.S. snooping. This attempted imposition of national or other borders on cloud computing could kill off this adolescent before it’s old enough to vote. Bottom line, says Staten: “The Internet knows no bounds and neither should the cloud.”

And as often happens even with well-intentioned “good” teenagers, some executive in the cloud universe will overstep the rules, trying to test compliance regulations in the cloud and will end up in court (or worse) or at least unemployed.

Finally, a topic close to my heart, Staten reiterates the mantra that IT channel players – the companies that sell software, hardware and services to business customers — that haven’t evolved to embrace the cloud better do so now. Or else.  It’ s not a new message, but it still rings true: “For the channel to survive it must add value around cloud services and there’s plenty of opportunity to go around.”

Just as human beings are made stronger by the trials and tribulations they faced as pimply-faced teens, the hope here is that cloud computing will face and survive these challenges, and come out on the other side stronger and more capable.

Photo courtesy of Flickr user GorupKa

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A near-term outlook for big data
• How data warehousing is now a cost-effective solution for businesses
• Cloud and data first-quarter 2013: analysis and outlook

The four-year-old company focuses on helping large companies use private and public cloud computing services within existing compliance and regulatory frameworks, said Servicemesh CEO and chairman Eric Pulier.

As more large companies want to use cloud services, they’re looking for ways to make sure the new IT scenario falls within existing compliance and regulatory guidelines for their business. They want the same kind of service level agreements (SLAs) and assurances they can get in the traditional on-site data center world.

Servicemesh’s software platform allows organizations to deliver business Infrastructure-as-a-Service, Platform-as-a-Service, and Software-as-a-Service capabilities from outside providers but layers reporting, governance and policy enforcement atop them, Pulier said.

“If you have a business unit that used to take 15 to 20 weeks to fire up a workload and build an app on it, that took massive amounts of steps. With cloud services, the unit can now automatically fire it up, but if that workload has a regulatory mandate where the data can’t leave Vietnam or it can’t leave an internal cloud, Servicemesh can enforce that,” Pulier said. Similarly, if an organization has a cost cap assigned to it, Servicemesh will make sure that if it spends, say, $5,000 in a day, an alert is generated, for example.

Servicemesh’s most direct competitors include legacy systems management companies like BMC and Hewlett-Packard.

This is the company’s first dip into the venture funding pool.  ”We spent the last four years building this company through some extremely intense times to 90 people and profitability but we’ve been pretty much under the radar. Now we’re ready to scale with this first round of VC, “Pulier said.

Ignition Partners has built up an impressive array of cloud-oriented investments including Cloudera, Heroku (now owned by Salesforce.com) and Splunk.

Photo courtesy of Flickr user epSos.de.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A near-term outlook for big data
• NewNet Q2: Google closes the quarter with a bang
• From car to cloud: the future of the in-vehicle app landscape

The GovCloud site explains that government agencies have had trouble processing and storing data in the cloud, which the government says can be accessible only by U.S. persons. But because AWS GovCloud “is physically and logically accessible by U.S. persons only, government agencies can now manage more heavily regulated data in AWS while remaining compliant with strict federal requirements.” Of course, GovCloud will feature high-level security for all this data.

Additionally, AWS is providing a variety of on-demand and reserved pricing options for government agencies, something that’s likely necessary given their sometimes strict budgetary requirements. Additionally, as Amazon CTO Werner Vogels notes on his blog post announcing the new region:

“[G]iven the restrictive nature of this new AWS Region, customers will need to sign an AWS GovCloud Enterprise agreement that requires a manual step beyond the usual self-service signup process. To make use of the services in this region, customers will use the Amazon Virtual Private Cloud (VPC) to organize their AWS resources.”

The timing of GovCloud is no doubt aligned with the upcoming October deadline by which federal agencies will have to offer initial reports about which of their data centers they’ll be closing down. The Office of Management and Budget has mandated that the government reduce its data center footprint by 38 percent by 2015, or 800 data centers, and offloading workloads to the cloud will certainly be among the tactics for pulling off that lofty goal.

The government is a massive source of IT spending, and AWS knows it has to play by the government’s rules if it wants to get a piece of that pie. Microsoft and Google are currently involved in a heated legal dispute over government contracts for their cloud-based collaboration services.

Interestingly, AWS won’t necessarily be limiting the GovCloud region to U.S. agencies. Writes Vogels on his blog, “We are certainly interested in understanding whether there are opportunities in other governments with respect to their specific regulatory requirements that could be solved by a specialized region.”

One thing that’s unclear is how, if at all, GovCloud is related to AWS’s previous work with government contractor Apptis on a project called FedCloud. I have reached out to AWS for a response on this question and will update this post with any feedback. According to an AWS spokesperson, government contractor Apptis will still be using AWS to provide cloud infrastructure to the U.S. government through its FedCloud portal and will utilize the GovCloud region.

Image courtesy of Flickr user Hey Paul.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Quality of the cloud: best practices for ISVs
• Will Apps.gov Raise the Bar for Cloud Providers?
• Cloud computing infrastructure: 2012 and beyond

At Structure 2011, BeyondCore Founder and CEO Arijit Sengupta explained how SplitSecure works. Essentially, the Software-as-a-Service offering separates transactions into sensitive and non-sensitive data, keeping sensitive data in-house while processing non-sensitive data in the cloud. When all the data has been processed, SplitSecure reassembles the pieces into a unified result.

In a health-care-related transaction, for example, SplitSecure would identify information protected by HIPAA regulations and ensure it isn’t send to the cloud for processing. It gets more fine-grained, though, Sengupta said, even identifying which pieces of information might need to have access to one another (e.g., a patient’s name and pharmaceutical history) and whether something might be better suited for processing on a particular infrastructure.

Taking it a step further, he added that SplitSecure could even add security to non-sensitive information such as a person’s name by storing and processing the first and last name on different clouds. Separating information to enable cloud-based processing has been around for a while — as anyone trying to process credit card transaction while complying with the PCI standard can attest to — but having that process automated via a SaaS product is fairly novel.

The technology appears appealing to service providers that want to give customers as much flexibility as possible when it comes to choosing the right infrastructure for the job. According to Sengupta, SplitSecure is already in use with six of the 10 multiple top outsourcing providers, including Accenture, and BeyondCore is in talks with leading Infrastructure-as-a-Service providers, too.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Public, private or hybrid? How to move to the cloud
• Quality of the cloud: best practices for ISVs
• How direct-access solutions can speed up cloud adoption