Telecoms Moving Aggressively into the Cloud

Arthur Cole
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Ten Predictions for Cloud Storage in 2014

The cloud is poised to create some major disruptions in the IT industry, primarily the relationship between the enterprise and the vendor/channel community. But if companies like Amazon, Google and Rackspace think they are in the driver’s seat in the nascent cloud industry, they should be prepared for some disruption as well.

The fact is, new organizations are unleashing cloud services every day, and not all of them are wide-eyed start-ups. Telecommunications companies, for one, are actively pursuing a wide range of cloud strategies, and they have both the means and the technical savvy to pull it off.

A prime example is Verizon, which recently unveiled the Verizon Cloud service built on infrastructure acquired from Florida-based provider Terremark. The service utilizes OpenStack and the Xen hypervisor to allow enterprise customers to implement hybrid architectures that can quickly and easily move loads across internal and external infrastructure. Earlier this week, the company teamed up with F5 in a bid to boost security and traffic management by embedding the BIG-IP suite of application services into the Verizon Cloud IaaS platform. The system effectively allows the enterprise to extend internal architectures into the cloud using customized management tools and scalable, policy-based application control that can reach into newly virtualized and legacy environments.


At the same time, companies like CenturyLink are leveraging their worldwide footprints to push their way into the cloud. The company recently acquired cloud provider Tier 3, which specializes in self-service, rapid deployment platforms for enterprise users. The plan is to provide a range of IaaS, PaaS and management services, most likely combining products already available through the Savvis hosting portfolio, under the newly created CenturyLink Cloud platform.

But all of this activity is likely to pale in comparison to developments overseas, where large state-run telecom providers already rule the voice and data communications infrastructure within their national borders. China Telecom, for one, is moving aggressively into cloud services, having recently teamed up with SAP to offer cloud-based recruitment and Human Capital Management (HCM) solutions across the country. The two companies are already partners in the China Datacom Corp., which was founded last year as a means to disseminate advanced technologies to China’s growing technological base. At the same time, China Telecom is on a massive data center building boom as it seeks to add millions of square feet of data infrastructure to meet the needs of a cloud market that is growing at about 35 percent per year.

The one drawback that countries like China and other emerging markets have imposed on themselves, however, is their reluctance to open up their data infrastructures to the outside world. This gives their governments greater sway over what citizens see and hear, but it limits their ability to become top players in lucrative industries like global cloud services. That means western firms are still poised to become the world leaders in the cloud, drawing billions in revenue from enterprises that operate on local, national and international levels.

Telecommunications providers, then, represent the most direct challenge to current marquee cloud providers like Amazon and Microsoft. The industry itself is still in its infancy, which means well-heeled rivals still have time to get in the game.



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