Telcos swap dumb pipe problem for dumb cloud

Fiona Chau
28 Jul 2011
00:00
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Daily News

Telecom operators must utilize their powerful differentiators in the cloud marketplace to avoid becoming “dumb clouds”, Informa Telecoms & Media warns.

The research firm said telecom operators worldwide invested nearly $8 billion to cloud-related pursuits in the first six months of 2011, but recent acquisitions haven’t yet generated decent cloud revenues.

The findings, based on Informa Telecoms & Media’s Telecom Cloud Monitor, a new analytical tool evaluating telcos’ cloud strategies, show that the typical telco generates less than 5% of its enterprise revenues from annuity cloud services.

Despite growing customer wins, some telcos need to muster 10-fold growth to hit the publicized cloud revenue targets.

“They are buying companies with datacenters and established cloud services, but who themselves aren’t making much money from cloud yet - most revenues come from hosting, not pure cloud services.” said Camille Mendler, principal analyst at Informa Telecoms & Media.

Mendler said out of the 10 acquisitions and 21 investments announced in the first half of 2011, 80% involved data centers, highlighting telcos' desire to bulk up on physical assets to sell virtual goods.

Many telcos are swapping their dumb-pipe problem for a dumb cloud: 70% of the 88 cloud services launched in the first half of 2011 were generic productivity and storage applications, often involving partners claiming a major share of the takings, she added.

Many operators are spending a lot of money just to get into the cloud game. But there is not (yet) much difference in their service portfolios looking across the global group,” Mendler noted.

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