Cloud Computing is an Opportunity for Telcos, Just How Much is Hard to Say

The leading telcos will play an important role in the further evolution of cloud computing, although the leading current suppliers such as Amazon and likely Google will remain dominant, said Forrester Research (News - Alert) analyst Mike Cansfield. 

 

The opportunity for telcos potentially is greatest in the area of managed services for enterprises, but have far fewer options in the public cloud area, where the role of transport services is relatively minimal, Cansfield said. 

 

Cloud services are a business opportunity, to be sure. Because communications is a central part of any cloud computing solution, telcos have the opportunity to sell cloud solutions, both directly and in conjunction with IT companies. Orange Business Services Flexible Computing (virtualized IT and SaaS) cloud service is an example of the former, as is Verizon (News - Alert) Business' success with its computing-as-a-service.

 

AT&T's Synaptic Storage as Service, sold in conjunction with IBM, is an example of the latter, said Cansfield. 

 

Cloud solutions also can be used internally to reduce costs. For example, a service provider in a small country can easily generate up to 40 million call detail records (CDRs) on a busy day. These CDRs need to be rated and priced before entering the billing engine for dispatch to customers. 

 

Typically, most telcos own and manage dedicated IT systems stacks for each application like CDR processing.

The opportunity within the communications sector is to bring the shared economics of cloud solutions to bear on internal operations just as the telcos are advocating to their customers.

 

Longer term, cloud computing is among the ways telecom providers can add value and avoid the dreaded 'dumb pipe' role.

 

Cloud computing does offer a route toward providing enterprise customers with managed services offers rather than just ever-cheaper connectivity.Communications is an integral part of all cloud computing solutions, so the trick is to bundle computing resources and services. 

 

That said, it remains unclear whether telcos will be more successful are retailers or wholesalers. AT&T's (News - Alert) tie-up with IBM to deliver cloud solutions is an example of the wholesale approach. 

 

Still, there are challenges. Telcos play a negligible role in public cloud sales, said Cansfield. In public cloud sales of services like the Amazon.com (News - Alert) Elastic Compute Cloud (EC2), the network is relatively unimportant and unlikely to feature in the sales process. In such cases the telecom serviceprovider most often will be a transport service provider.

 

The IT companies will lead where it comes to private cloud solutions, Cansfield said. Firms such as IBM, Oracle, Microsoft (News - Alert), HP, Google, Amazon, Cisco, eBay and Saleforce.com already sell direct solutions that will incorporate transport, and these firms will be tough competitors when that is the case. 

 

Still, whether as retail providers or partners to retail providers, cloud computing is a revenue generator for telcos.