Cloud providers must sell IT services to survive

Today's cloud computing providers come from a variety of industries. Companies like Google and Amazon have adjacent businesses (search, e-commerce) and expertise in running computing at scale that fit well with selling IT services. Here are some of the major providers:

• Software as a service (SaaS) providers like Salesforce.com and Intuit see their cloud offerings as a way of letting users customize their core applications.
• Managed hosting companies like Rackspace, Joyent, Savvis and Servepath that make elastic (flexible, resizable computing capacity in the cloud) versions of their offerings.
• Systems integrators and consulting firms like IBM see clouds as a way of extending the services they offer.

And yet the biggest incumbents in hosting services are the telecom carriers. AT&T, Verizon and others have data centers next to large amounts of bandwidth, as well as an existing customer base using their collocation space. But with a few exceptions, telecom service providers have failed to play in the cloud computing debate.

So what should carriers do to build the right cloud offering? Of course, they need to address the usual concerns around security, compliance, governance, uptime and availability. But those are just "table stakes" for IT services.

To succeed, carriers need to make more fundamental shifts in how they do business.