ACG Research on cloud computing services, or is that infrastructure?

Can telecom carriers gain enterprise trust in the cloud computing services that they are offering? ACG Research Managing Partner Ray Mota offers his take.

Editor's Note: Telecom service providers often talk about cloud computing services as if they're a well-established entity with enterprise customers, but as with all things cloud, there's a lot of hype surrounding the truth. The truth? Carriers say one thing and enterprises say another. In short, carriers are going to have to work hard to show enterprises they're up to the cloud challenge, if indeed that's what they're selling.

We talked to ACG Research Managing Partner Ray Mota, who discussed the five benefits of cloud computing services for telecom carriers in his most recent column and picked his brain beyond the hype, right down to whether cloud computing services by any other name would sell as sweet.

How difficult is it for telecom carriers to sell cloud computing services to large enterprises?

Mota: Some years ago, the carriers did a lousy job of supporting multiple protocols and implementing a lot of security features. So stemming from that, there was a total lack of trust in them. Now that's changed somewhat. The economy has forced some enterprises to outsource more and rely more on advanced technology. For carriers, now that IP has won the protocol war, they have one protocol to support, and if they're using MPLS, there's better provisioning and security, too.

Also, it's much more profitable for carriers to offer Ethernet services compared to SONET or TDM, even though at first they thought Ethernet services were a joke. Now that Ethernet is carrier grade, it's a lot easier to deploy. With IP, Carrier Ethernet, and the economy putting pressure on enterprise IT budgets, it all came together for the carriers.

Can telecom providers compete against Amazon's Elastic Compute Cloud (EC2) service?

Mota: Amazon is doing an amazing job on the cloud side, but if you look at pure managed services -- managing your VPN and that type of thing -- there's been a tremendous increase with providers being able to offer managed CPE managed devices, and so on.

Carriers like BT and some others have said they're not just going to manage the pipe, but will manage some of what's going through the pipe and offer and end-to-end security and end-to-end VPN solutions. They've done pretty well with that, which has even helped router and switch sales. But carriers have to market their services better. If you're a CIO, are you going to trust a book company or let someone like an AT&T work out the scalability?

Is "cloud computing" the right name for these services?

Mota: The term "cloud" could be more of a marketing term for carriers than an actual product offering. It's the marketing buzz word of the day. We might not end up calling it cloud computing but managed infrastructure or something. Whatever the services are called, I think they'll do well.

Also, there are so many cloud definitions out there, no one agrees on what it is. Basically, the first part of cloud computing is virtualized infrastructure. Lots of people don't understand that. After that, carriers could move on to offer virtualized video and virtualized voice, then bandwidth on demand.

Would carriers do better with virtualized infrastructure description?

Mota: Carriers could really address the large enterprise better with service descriptions like virtualized infrastructure rather than cloud. Vendors like Cisco, Juniper and Brocade are starting to virtualize the network and the data center, so they can prepare the service provider more effectively without compromising network reliability. There's a big race to prove how effective virtual switches or network or data center can be.

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