Menu
​Are public cloud services a dumb move for telcos?

​Are public cloud services a dumb move for telcos?

Is a “dumb” cloud as dangerous to a telco’s financial health as a dumb pipe?

Is a “dumb” cloud as dangerous to a telco’s financial health as a dumb pipe?

Research Analyst firm Ovum asked this question back in 2011 as service providers CenturyLink, Time Warner Cable, and Verizon started buying cloud computing assets in order to diversify their commoditised connectivity-centric service portfolios.

In those heady days, many telcos believed they could joust with Amazon Web Services and its peers on the same playing field.

AWS’s elegant value proposition of massively scalable generic computing power delivered instantly over a public cloud sounded much like telcos’ industrialised delivery model for connectivity services.

Five years later, CenturyLink and Verizon, among others, have announced plans to restructure or shed various cloud-related assets.

“Over time, many telcos have found that their cloud infrastructure choices were too rigid and expensive to allow them to even join a race to the bottom in public cloud services with AWS, let alone to win it,” says Camille Mendler, Research Analyst, Ovum.

“For its part, over half a decade AWS has reduced its prices for various public cloud services at least 30 times, but it also continues to introduce new services and improvements while expanding the vast scale of its activities around the world.”

Yet the dumb cloud debate has never been snuffed out, and as Mendler explains, Deutsche Telekom has fired it up again - it has now officially launched the Open Telekom Cloud with technology partner Huawei, inaugurating a major European public cloud infrastructure to rival AWS.

“Technology vendors can have a role in changing market dynamics, especially if they are willing to share risks and rewards with telcos,” Mendler adds.

But have other market conditions really changed?

In 2011, Ovum made three key recommendations to telcos:

Stop aping Amazon:

Ovum claimed that telcos should emphasise their ability to deliver and support multi-device and multi-platform cloud service delivery.

Today, hybrid cloud services spanning private and public environments are a leading telco proposition.

Start boasting:

Ovum claimed that telcos should stress their enormous investment and skills in security and service-level management and market integrated, end-to-end cloud SLAs.
Today, cloud outages and concern over the US Patriot Act have raised scrutiny of the security and privacy credentials held by telcos such as DT. End-to-end SLAs, meanwhile, still need work, although DT’s related Ngena alliance focusing on virtualised network services is firmly moving in this direction.
Support communities:
Ovum claimed that telcos should stop focusing on generic cloud services and instead construct unique areas of differentiation and margin stability.
The jury is still out about the success of telcos and sovereign clouds - France’s Numergy and Cloudwatt initiatives illustrate the challenges.
But some vertical industry propositions are now on offer (notably in health) and, importantly, telcos such as DT, Telefonica, and others have the on-the-ground capacity to consult and advise local enterprises, something that cloud natives lack.
Yet they remain more successful in nurturing external communities of cloud innovators.
“What’s conclusive is that for telcos to compete purely on cost is foolhardy,” Mendler adds. “Selling public cloud services ain’t dumb, but for telcos it certainly isn’t easy.”

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags ovumAWSCloudTelcoData Centre

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments