Connectivity key to cloud cash-in

Connectivity key to cloud cash-in

John C. Tanner  |   September 11, 2013
telecomasia.net
Telecom operators know that the cloud is the future, and that the future is now. What they’re less sure of is how to cash in on it. Certainly there is money to be made from the cloud, as numerous analyst forecasts demonstrate. According to IDC, for example, Asia-Pacific CIOs (excluding Japan) are increasing their spending on public cloud services and technologies 50% to $7.5 billion this year alone.
 
Globally, Gartner expects the public cloud services market to grow from $111 billion last year to $131 billion by the end of the year. That includes subsegments like cloud advertising, cloud business process services, software as a service (SaaS), infrastructure as a service (IaaS), platform as a service (PaaS) and cloud management and security services. And public cloud is just one of the more visible cloud sectors thanks to the success of players like Amazon Web Services.
 
Interestingly - like real clouds - the cloud market is constantly shifting and changing, driven by increasing globalization of enterprises - not just in terms of where they do their frontline business, but where they put the back-end, says Rangu Salgame, CEO of the Growth Ventures group at Tata Communications.
  
“IT organizations and technology development have become highly decentralized and global, where maybe your offshore development group is in Bangalore and your call center is in Manila and other activities are in Shanghai and Shenzhen.”
What’s also changing is who buys cloud services and how they buy them. For example, while CIOs have traditionally called the shots on cloud strategies, line-of-business (LOB) managers are having an increasingly big influence on cloud decisions. Chris Morris, IDC’s AVP for cloud services in APEJ, says that LOB managers now contribute up to 50% of cloud spending, and are less interested in technology and more focused on the service itself and what it can do for their business.
 
“For any SI or VAR that has previously relied upon technical expertise as a differentiator, this is a wake-up call,” Morris said in a research note.
 
The dynamic nature of the cloud market does mean an opportunity to create all kinds of new cloud services, and a number are already generating interest, from big data crunching and mobile app back-end services to cloud BI, managed M2M and cloud brokerage services. And the sector is nascent enough that it’s a wide-open field for just about everyone right now. The question for telecom operators remains: where do they fit, and how can they cash in on it?
 
The answer, at least for now, is right in front of them. Whatever new cloud service trend you look at, the key advantage for telcos now and in the near future remains - what else? - connectivity.
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