Cloud Computing

IBM announced a new cloud services platform intended to support communications service providers of cloud computing services and applications. 

The “IBM Cloud Service Provider Platform” is touted as providing “a comprehensive set of hardware, software, and services” that will let CSPs deliver new cloud-based services to their customers. 

Among the key advantages is "time to market," as IBM argues the platform could accelerate delivery of new applications in weeks rather than months. In large part, the difference comes from faster ways to prototype and test new apps without the traditional high labor and capital costs.

Significantly, the platform is seen as supporting cloud-based “unified communications, collaboration, field force management and sales tracking and customer relationship management applications," for example. 

IBM's Service Delivery Manager is designed to take advantage of the market for cloud services, which IBM estimates will grow to $89 billion by 2015. IBM believes its own revenue opportunity from cloud can grow to $3 billion by that time.

The cloud platform is built on IBM’s Service Delivery Manager technology, and IBM is also working with nine startups — including Corent, deCarta (News - Alert), and Broadsoft — that will provide technology to fuel the services available to public and private clouds. 

DeCarta, for example, offers a technology crucial to location-based services — it provides “the core functionality for mapping, navigation and local search and connecting base map data and content to the applications, service provider and ultimately the end-user.” DeCarta’s technology could be useful to CSPs for applications like mobile advertising.

All of this raises a bit of an existential question: are service providers more like Best Buy (News - Alert) or Apple? In other words, to what extent are service providers retailers of technology and products created by others, and to what extent are they distributors of products created by others? 

The answer matters because it speaks to "core competency." Should service providers be spending their time and energy "creating" services or "selling" them? The answer isn't clear cut, to be sure. You might argue that telcos historically did create their own technology, back in the days of monopoly, when the research function (AT&T Bell Laboratories), product creation function (Western Electric) and sales functions (AT&T) were all parts of one company. 

These days, those functions are separated, though in recent days Bell Labs (News - Alert) was made part of Lucent, which was acquired by Alcatel. After the divestiture of AT&T, when the long distance and local access operations of the former AT&T were structurally separated, the Regional Bell Operating Companies created their own version of Bell Labs, then known as "Bellcore," and now renamed "Telcordia (News - Alert)."

Nevertheless, one frequently hears talk about whether "innovation" actually is a carrier or service provider core competency. Again, the answer matters because the pace of innovation is so high these days, and the cost of such development so large, collectively, that the practical question arises: how should service providers best ensure they can innovate?

Some will argue that service providers are more like Best Buy than Apple, with the implication that finding partners who have useful technology is more important than trying to develop technology internally. Granted, for the most part, service providers are Best Buy: they buy networks, and network elements, created by others.

But some key "products," such as voice communications, text messaging or broadband access, in one sense are "created" as services. Without the "agency" of the service provider to create an end-to-end managed communication circuit, the underlying technology is inert. But you get the point: if service providers are more like Best Buy than Apple, they should spend their time scouring the world for good ideas and technology to implement, rather than trying to build their own.

"Carriers will deliver services, price it and package it. But they won't build their own platform and technology," Scott Stainken, general manager of IBM's global telecommunications business, said, according to the Wall Street Journal.