What’s up with… AWS, Huawei, ADVA

• AWS continues to grow like wildfire
• Huawei is still shrinking
• ADVA has its best ever Q1, completes quantum-secured data transport PoC

Ongoing growth for AWS, further shrinkage for Huawei and a bevy of positive news for ADVA lead the way in today’s extensive news roundup.

Amazon Web Services (AWS), the cloud computing arm of giant online retailer Amazon, reported a 37% year-on-year increase in first quarter revenues to $18.44 billion and a near 57% increase in operating income to $6.52 billion. Amazon CEO Andy Jassy described the cloud platform as “integral in helping companies weather the pandemic and move more of their workloads into the cloud”. In Amazon’s first quarter financial report, it highlighted key deals made by AWS in the telco sector, including with Verizon, Telefónica and Etisalat. AWS’s performance was, however, somewhat overshadowed by news of Amazon’s overall first quarter net loss of $3.8 billion compared with net profit of $8.1 billion in Q1 2021, with a $7.6 billion hit associated with its investment in Rivian Automotive largely to blame for the reversal. Amazon’s overall sales increased by 7% to $116.44 billion. Amazon’s stock took a hammering, and was down by 12.45% to $2,532 by the middle of trading day on Friday. 

Huawei’s numbers took a bit of a hit in the first quarter, though of course it is still a giant company. Revenues came in at CNY131 billion (US$19.8 billion), down almost 14% year on year, while its net profit margin tanked to 4.3% from 11.1% in the same period a year earlier. "In Q1, our overall business results were in line with forecasts. Our consumer business was heavily impacted, and our ICT infrastructure business experienced steady growth," stated Ken Hu, Huawei's Rotating Chairman. "We have yet again increased our investment in R&D to harness the momentum of our innovation and create new value for customers."

Meanwhile, it’ll be all smiles at European optical equipment vendor ADVA (and at Adtran, with which it is set to merge). The German company reported record first quarter revenues of €170.5 million, up 18% year-on-year driven by greater demand from telcos and ‘Internet content providers’, though its earnings before interest and tax (EBIT) margin slipped to 4.6% from 8.9% a year earlier due in part to increased costs related to component price inflation. “We have good momentum and started well in this new business year. The expansion of communications networks is progressing rapidly and is fueled by public funding programs in many regions and countries. This environment should continue to positively impact demand for our products for the foreseeable future,” said Brian Protiva, CEO of ADVA. “Our investments in innovation in recent years have provided us with an outstanding, differentiated portfolio of solutions with which we will gain market share. The transformation of our business towards growth markets with a higher proportion of software and services and more verticalization is progressing well. In addition, the merger with Adtran will open up completely new opportunities for us in the USA, Europe and the global market.”

Still with ADVA… In Schleswig-Holstein, Germany’s northernmost state, the electricity power grid utility, Netz, has just completed a successful field Proof of Concept (PoC) trial over its live network demonstrating quantum-secured data transport over aerial fibre cables. The test was conducted in partnership with optical technology vendor ADVA, whose FSP 3000 platform with ConnectGuard Layer 1 encryption technology was used, as was a “future-proof” key exchange based on quantum key distribution (QKD) to send encrypted data across overhead fibre cables. Hitherto, it was thought that ensuring QKD performance across aerial fibre in harsh, real-world, outdoor conditions would be impossible, but that was proven not to be the case. As stated in vendor’s press release, “The trial shows how mission-critical utility networks can now counter the urgent threat of attacks from quantum computers. Technology from ADVA’s partner, the quantum cryptography company ID Quantique, also played a significant role generating QKD keys.” Germany has four German transmission system operators (TSOs) whose role it is to plan and maintain the country’s ultra-high voltage grid and to regulate grid operations with the aim of securing the German power supply system and ensuring the uninterrupted exchange of electricity across all regions. The PoC determined that energy networks can be protected from quantum computers attacks. Benjamin Merkt, the CTO of Schleswig-Holstein Netz, commented, “The emergence of large quantum computers will jeopardise mission-critical networks as never before. That’s why we’re taking action now and trialling technology to safeguard power infrastructure for the long term. We’ve shown that grids like ours that use aerial fibre stretching across hundreds of kilometres can be protected against quantum-enabled hacking, even in adverse climactic conditions. It’s a major step towards guaranteeing the integrity and security of critical data in transit both today and in the post-quantum world.” Helmut Griesser, director of advanced technology at ADVA, added, “This PoC proves that QKD-based encryption is achievable in network architectures like this. Even with fibre optics integrated with 110kV overhead lines and unprotected from wind, solar radiation and thunderstorms, our solution was successful… we’ve been able to demonstrate that QKD has a major role in safeguarding utilities. We’ve shown that our encryption has the power to protect our most sensitive and vital assets from cybercriminals even in the age of quantum computers.” The PoC was carried out under the aegis of the OPENQKD project, which is supported by the EU’s Horizon 2020 research and innovation programme which is building a variety of testbeds to demonstrate use cases that will lay the foundations of a pan-European quantum network. Read more.

Meanwhile, in what it describes as a quantum leap for privacy, PureVPN, based in the British Virgin Islands, has introduced a “quantum-resistant” feature to its OpenVPN protocol that will provide its 3 million users with “more security than ever before”. The press release blurb has it that quantum computers “will be able to override traditional encryption protocols, rendering them obsolete and not fit for purpose in the future.” It continues, “In collaboration with Quantinuum, [which is the fruit of the merger of Honeywell Quantum Solutions and Cambridge Quantum] PureVPN is taking the first steps to combatting the threat posed by quantum computers to users.” Given that the Quantum Alliance Initiative reckons the first real-world quantum computers won’t be available for 15 years yet, PureVPN is getting in on the act remarkably early. It adds, “The revolutionary technology will future-proof users against threats to their data and privacy as quantum computers gain more and more momentum.” PureVPN claims that with quantum-resistant encryption keys, (which it says are “generated using a verifiable quantum process” although there is no explanation of what that process actually is) PureVPN users will be able to enjoy the added advantage of strengthened privacy and anonymity on all devices, enhanced remote work security, safer online banking and crypto transactions and an added layer of protection from illegal surveillance. This layer of protection will carry on through when quantum computers become more accessible and commercial.” Quite. The quantum stuff will come alongside split tunneling and obfuscation features and, let’s face it, there’s a lot of obfuscation in the global telecoms industry. The system will be rolled-out in US, the UK, Australia, Canada, Germany and the Netherlands on Windows, Mac, iOS and Android apps.

Ransomware victims are still paying up and paying much more to get cyber blackmailers off their backs and out of their servers, it seems. As rampant inflation hits economies around the world in the aftermath of the global pandemic and Russia’s invasion of Ukraine, Sophos, the advanced threat protection and security software and hardware company, has published a report showing that price increases in ransomware demands are heading into hyper-inflation territory. Those companies desperate enough to pay blackmailers for decryption keys to restore their files and systems (and that’s about 48 per cent of victims) are paying five times more today than they were in 2020. Sophos says the average payment demanded by cybercriminals to restore servers and systems to the status quo ante is now US$812,260. At the end of 2020, the average demand was for $170,000. What’s more, the proportion of victims who pay ransoms of over $1 million rose from four per cent to 11 per cent over the course of 2021. Organisations willing to admit publicly that they have been targeted by ransomware bandits (and there aren’t many of them) say they pay because it is the easiest and quickest way to get their networks back up and running. Some few also admit that the decryption keys provided upon payment don’t work and the blackmailers then come back to dip their beaks in the money pot for a second time. And once an organisation does pay, there’s every chance that they will be extorted again a hear of so down the line. It all seems very bleak but Sophos analysts discern a sliver of silver lining amongst the banks of dark clouds. Chester Wisniewski, principal research scientist at Sophos told the website ZDNet that he has some slight optimism that ransomware blackmail might now be just about at its peak. It’s a dangerous thing to say, and he could be making himself a hostage to fortune, but he qualifies his positive thinking by pointing out that Government agencies such as the UK National Cyber Security Centre and the US Cybersecurity and Infrastructure Security Agency are now providing “meaningful” advice to organisations on improving cybersecurity. Then he adds the downbeat caveat: “I don't think enough organisations are listening to them yet, but at least the resources are accessible, approachable and usable, so it's a good start.” From tiny acorns… and all that.

Dutch operator KPN booked a 27% year-over-year increase in net profit to €179 million in the first quarter of 2022, with the company noting continued sales growth across its mass market service segments, and improved service revenue developments at its Business segment, driven by demand from small- and medium-sized enterprises (SMEs). CEO of KPN, Joost Farwerck, who expressed confidence in the company’s ability to stabilise the total Business segment service revenues by the year-end. “We had a strong start to the year and we are on track to deliver on our strategic and financial ambitions”, he noted as part of the company’s results announcement.