Cloud // Infrastructure as a Service
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2/14/2012
10:37 AM
David Berlind
David Berlind
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Telcos Poised To Disrupt Amazon's Enterprise Cloud

Telephone companies have the assets and track record in delivering secure and reliable services to grab a piece of the enterprise cloud services market popularized by Amazon and Rackspace.

"The cloud is not the cloud without the network." Those were the words of NTT America CTO Doug Junkins during his keynote presentation at Monday's day-long Cloud Carrier Forum, one of several breakout summits that took place on the first day of the Cloud Connect conference in Santa Clara, Calif., produced by UBM TechWeb, parent to InformationWeek.

Junkins was speaking to a standing-room-only mix of cloud industry stakeholders including telcos; cloud infrastructure and management solution providers; enterprise consumers; and software as a service (SaaS) and cloud application providers. The message--practically a constant theme throughout the day--was that carriers like AT&T and Verizon are uniquely positioned to be the preferred providers of an array of cloud-based services to enterprises--everything from virtualized networks to public and private infrastructure-as-a-service (IaaS) offerings. It's just a matter of time before the telcos recognize the opportunities, realign their currently siloed businesses, and embrace more of a "Telco 2.0" culture.

One point that was consistently made during the Forum: Not only do the carriers already own the networks across which all cloud-based data and content is already trafficked, they have a decades-old and relatively bulletproof track record in delivering secure and highly available services.

[ For more, see Four Things I'd Like To See At Cloud Connect. ]

The opportunity for both carriers and enterprises alike is not to be underestimated since the land grab for cloud computing customers is far from over. According to Heavy Reading senior analyst Ari Banerjee, cloud computing will account for a bare 13% of the global enterprise IT spend in 2013, leaving plenty of traditionally spent IT budget to be disrupted by the cloud. (Heavy Reading is the research arm of Light Reading which is also a division of InformationWeek's parent UBM TechWeb.) That percentage is likely to climb through the decade as more IT pros begin to recognize that just about everything (including their networks) can be very cost-efficiently virtualized, and more organizations follow the lead of federal programs like the U.S. government's Cloud First initiative, whereby agencies are required to consider cloud computing alternatives ahead of on-premises options.

Further explaining why carriers are well-positioned to take their piece of that pie, Banerjee detailed how the carriers "own the network, they own the subscribers, they are used to delivering five nines availability, they know how to provide turnkey applications and services to hot market segments like [small and midsize businesses] SMBs, and much like the way that Amazon got started in the business of IaaS-provision, they have data centers with extra capacity."

Deep business and operations support systems (B/OSS) experience is another arrow in the quiver of telcos. Running and billing for highly available and scalable on-demand cloud-based services depends on the presence of equally scalable and available B/OSS--just another discipline that's already in the wheelhouse of all the major telcos.

Given telcos' background and existing role in delivery, the actual business opportunities are too numerous to list. For example, the economics of the telcos' data centers aren't substantially different from those of Amazon's or Rackspace's. There's no reason telcos can't deliver compute services like Amazon's EC2 or storage services like Amazon's S3, providing all of the necessary management infrastructure for migrating workloads from private to public clouds and even between multiple public clouds.

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JoelBaker
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JoelBaker,
User Rank: Apprentice
2/29/2012 | 4:47:06 PM
re: Telcos Poised To Disrupt Amazon's Enterprise Cloud
I agree with Paul. If the telcos are so well positioned to offer these services, why didn't they offer them 10 or even 12 or more years ago when these industries were starting to gain momentum. The telcos can offer great layer 1 and some layer 2 connectivity, but when you get beyond that, great customer service and a depth of customer-facing capabilities are required, and that's where the telcos fall short and have always done so. Level 3 started as a public customer-facing company, without the extreme siloing of the more established telcos, so they were born with the development of great customer service in their genes. Not to mention still existing issues with whether or not the big telcos play well together. I'd rather go with a Rackspace or Amazon type solution where I know a lot of redundancy through multiple services is included in the deal, and I'm not subject to the infrastructure whims of a single provider.
PaulLask
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PaulLask,
User Rank: Apprentice
2/17/2012 | 2:35:53 AM
re: Telcos Poised To Disrupt Amazon's Enterprise Cloud
The big question is whether ATT and Verizon can actually deliver price competitive, robust infrastructure. Can they deliver innovation on the service front that matches the functionality delivered by Amazon and Google? Today, there isn't too much evidence for any of the telcos to think out of the box and deliver these services. Simply having large globally distributed data centers does not neccesarily mean they can deliver a feature rich enterprise cloud environment.
Multicloud Infrastructure & Application Management
Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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