Gearing up for the cloud
The "cloud" may be an overused term that means different things to different companies, but for carriers it's still potentially serious business. The cloud and the subsequent strategic importance of data centers to telcos was a recurring theme onstage at this year's PTC conference, and in the past few months, a number of carriers have been making high-profile pushes in their data center and cloud strategies.
Pacnet, for example, launched its third data center last month in Sydney, following data center landing station launches in Hong Kong and Singapore late last year. Tata Communications has also been leveraging its data center assets with cloud-based services such as InstaCompute - a public-cloud IaaS offering initially for India, with Singapore and South Africa next in line - and InstaOffice, a SaaS offering for SMBs in partnership with Google Apps. Even cellcos like SK Telecom are getting in on the act - last month, SKT launched its Cloud Data Center (via SK Broadband's data center in Seoul) to offer cloud-based services and solutions.
The market drivers for data centers and cloud services are fairly well understood by now - growing broadband traffic (particularly from the mobile sector) and growth in apps and content that need to be hosted closer to the market trying to access it. And of course there's the attraction of new revenue streams for service providers as they look to milk more value out of their data centers. Gartner estimates the cloud services market is worth $68.3 billion today, and will grow to $148.8 billion by 2014.
Approaches vary, depending on the telco strategy, the assets they have and the markets they're targeting, but the common thread in most cases isn't the data center so much as the network to which it's connected. Ultimately, it's the network that forms the foundation for the added value that carriers can bring to the cloud, and distinguish their cloud services from over-the-top Web 2.0 cloud services, such as Google Apps and Amazon AWS (or, as the Tata's InstaOffice example illustrates, make telcos an ideal B2B partner for such services).
Of course, it's not that easy. Even with network assets at their disposal, telcos hoping to cash in on the cloud will need to not only ensure that their data centers are up to the challenge, but also possibly rethink the concept of the data center itself.
In fact, a good starting place would be to define just what "the cloud" is from a telecom point of view.
According to Sanjay Munshi, product management director at Brocade, service providers should start by understanding the two basic cloud models in play as far as data centers go. "You have the private cloud, which is what enterprises use, where there's only one user and you have SLA guarantees. Then you have the public cloud, which is where Web 2.0 companies like Amazon and Google play, where you have many users coming into the data center sharing resources."
The sweet spot for service providers, he says, is a hybrid of the private and public models, "where you have some aspects of the private cloud like SLA guarantees, and public in the sense that it's shared by many users."
Joe Weinman, worldwide lead for HP's communications, media and entertainment division, also uses the term "hybrid". "It means dedicated, owned capacity, mixed with on-demand, pay-per-use capacity, the same way that you might own a car but also rent cars," he says. "Rather than two separate environments, the 'hybrid' occurs over a network and with a common management and security layer. The hybrid may be external, where an enterprise combines its own data center assets with service provider cloud services, or service-provider-internal, where the service provider augments its own data centers with pay-per-use capacity from a provider such as HP."
Telcos can pursue partnerships with Fintech providers to capitalize on the opportunity
Egidio Zarrella, Asia Pacific head of banking and capital markets, KPMG, says that banks sit on huge amounts of customer data
The rise of fintech and the explosion of digital social media already blurs the traditional lines of corporate responsibility