 | Issue: | Asia-Pacific II 2013 |
| Article no.: | 4 | |
| Topic: | Doors in the cloud | |
| Author: | Nathan Bell | |
| Title: | Global Director Portfolio & Marketing | |
| Organisation: | Telstra Global | |
| PDF size: | 220KB |
About author
Nathan Bell is Global Director for Portfolio and Marketing at Telstra Global based in Singapore, where he is responsible for leading Telstra’s suite of global products and the company’s marketing strategy. Mr Bell has 14 years of experience; he has held a number of senior leadership and sales positions in the Netherlands, Central and Eastern Europe and Asia Pacific at companies including AT&T, KPNQwest and BT.
Nathan Bell holds a Bachelor of Arts in European Studies from the University of Kent.
Article abstract
IDC recently said, “cloud services [will] become the centre of competition in many IT market segments” and businesses are increasingly looking to using cloud infrastructure to deliver quick, reliable services to customers. With the ability to seamlessly offer applications and on-demand services over the cloud, telcos view the cloud as a new area for service growth. Telcos control the networks that deliver the cloud services so they can provide service assurance and end-to-end service level agreements for cloud application performance.
Full Article
As cloud computing matures, more businesses are seeing the value of investing in cloud infrastructure to deliver quick, reliable services to customers. Forrester forecasts that the global market for cloud computing will grow from US$40.7 billion in 2011 to more than US$241 billion in 2020, and will become a fundamental tool in local economic growth; Gartner expects cloud computing will account for two per cent of GDP growth in Europe by 2020. This is particularly evident in Asia Pacific, touted to be the next hotbed for cloud adoption, where enterprises spent nearly US$10 billion on cloud and data centre infrastructure services in 2012, a significant jump from previous years.
Much of the performance of cloud-based applications depends on the quality and connectivity of the network that delivers them. A slow unreliable network is of no use to companies looking to deliver high-speed, reliable, on-demand services to their customers. For many companies, server downtime and unavailability of services can result in significant loss of revenue, damaged reputation, and, on occasions, can result in a breach of regulatory compliance.
With the ability to seamlessly offer applications and on-demand services over the cloud, telcos view the cloud as a natural area for service growth.
For telcos, the cloud offers an opportunity to provide services that enable businesses to maximise revenue opportunities and reduce revenue leakage. According to the International Data Corporation’s (IDC) recent Top Ten Predictions for 2013, ‘cloud services [will] become the centre of competition in many IT market segments, it is critically important for traditional IT suppliers to get more ‘cloud DNA’ into their organisations and to accelerate the growth of their cloud services platforms and customer bases’.
Telco growth area
With years of experience providing access to network and hosted services through network redundancy and low latency connectivity, it is a natural move for telcos to expand their portfolios by offering integrated cloud, network, and hosting services. They have an advantage over other cloud vendors since telcos own and manage the networks that deliver the various types of cloud services to enterprises. As a result, telcos are able to provide service assurance and end-to-end service level agreements for cloud application performance.
Many telcos have built their own dedicated data centres to provide managed hosting services. With mission-critical business applications and processes becoming digitised, many companies are turning to scalable, cloud-based disaster recovery (DR) solutions to complement their primary DR capabilities. Telcos have an advantage with regard to ensuring the synchronisation between primary and secondary DR infrastructures; given their low latency connectivity, time sensitive applications and customer data is synced and backed up in near real-time between the two sites, reducing the risk of data loss in the event of a disaster.
The next step is to ensure that a customer’s cloud platform remains cost effective, and that together with existing infrastructure, it doesn’t become just another drain on monies that could have been more effectively invested elsewhere in the business rather than on just duplicating infrastructure assets. Telcos have a key role in advising customers and helping them continue to advance beyond initial adoption of cloud – making sure the investment pays off significantly and delivers on business objectives.
One example is voice conferencing. For many businesses, voice over IP and conferencing is merely software, yet many enterprises operate a conferencing facility outside of the corporate network – this approach generates additional network costs. By working closely with customers and understanding possible sources of excess expenditures, telcos can find opportunities to provide a variety of cloud services that help enterprises utilise their assets to enable business operations at a greatly reduced cost.
Navigating the hurdles
With rising competition between telcos offering cloud services, many telcos find themselves challenged to organically develop the expertise to manage complex enterprise-class types of cloud deployments. To offset this challenge, there is a growing tendency of telcos to seek acquisitions of and partnerships with cloud providers, as telcos look to capitalise on their existing IT infrastructure and industry best practices.
IDC suggests relationships are key; “the emerging community of cloud services providers consists of both the next generation of market leadership competitors and – paradoxically – the vitally important partners and channels”. Telecos are establishing strong relationships with cloud technology vendors, to tap their expertise and improve their cloud offerings to customers.
Like all cloud vendors, telcos offering cloud services need to examine their security policies to ensure data privacy and compliance. By implementing the necessary deterrents and controls, including identity and access management tools, strong, multi-stage user authentication systems and encryptions, telcos can ensure that only the right people have access to sensitive information stored in the cloud. Physical measures are also necessary to make sure the machines in the data centres are secure from theft, vandalism, and unauthorised access.
Outlook for global telcos
Telcos are in a unique position to supplement the cloud using the existing hosted solutions of their customers, thus ensuring a smoother transition towards complete cloud service and, more importantly, based on a schedule as defined by the customer, hence helping to mitigate the risk. Ultimately, telcos will not only have a viable business model, they will also encounter cost efficiencies for other cloud services they decide to offer, which they can pass on to their customers in the form of increased predictability of cost and service integration. This, in turn, maximises the benefits that cloud services bring whilst mitigating the costs.
Thinking globally – as well as in the Asian market where there are particular opportunities – telcos should consider cloud services with care instead of jumping on board the cloud bandwagon without proper strategies in place. By examining the services they might offer on top of the cloud infrastructure and how they might offer them, telcos will better understand the new business models they need to adopt. The new services could be anything from customer service to billing, from development to management; without these aspects also being cloud enabled, telcos will struggle with fixed overhead costs, ultimately leaving them in a follower position.
Another global challenge is the lack of regulation to guide how to deploy cloud services for the benefit of end-users. True cloud computing is a global market – it enables data and services to be accessed and deployed in multiple markets at any time and from anywhere in the world. The widespread adoption of cloud, particularly in Asia, means that a consistent, agreed-upon approach to managing standards of delivery, security, privacy and reliability is likely to emerge soon.
Asia opportunity
The cloud market in Asia, in particular, is ready for telcos to take advantage of the growth opportunities available. Last year alone, the Asia Pacific region as a whole spent close to US$10 billion on cloud infrastructure. Many predict that Asia Pacific will become the leading cloud market, in terms of revenue and traffic volume generated, within the next three to five years. The Asia Cloud Computing Association estimates that 54 per cent of Asian markets have already adopted the cloud or plan to do so. The potential for growth and expansion is tremendous in this market and, for telcos looking to expand their business portfolios, the opportunity is abundant; the number of telcos competing for this market will likely escalate within the next two to three years. Telcos must remember that the Asian landscape is large and incredibly diverse, for example figures from the Asia Cloud Computing Association show that enterprise cloud adoption is 42 per cent in Singapore, whilst in China it is only 22 per cent and Malaysia just 12 per cent. The Chinese market offers strong opportunities with 40 per cent of enterprises intending to adopt cloud computing. With such a diverse market, there is a need to bear in mind the specialised considerations of the Asia market against the global nature of cloud.
Serious cloud contenders
Although there remain significant hurdles in the introduction of cloud capabilities, the need of businesses to look at more elastic business models means there will be continued growth in cloud services demand. Telcos that are accustomed to managing a blend of their own and partner solutions in their networks and data centres will be in a good position to deliver end-to-end managed solutions spanning the network, communication and IT services, ultimately enabling the business customer to focus on what matters most – their businesses.
