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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags CloudTelcoovumAWS

Featured

Slideshows

Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
EDGE 2019: Channel forges new partnerships during evening networking

EDGE 2019: Channel forges new partnerships during evening networking

Partners, vendors and distributors reconnected during a number of social gatherings during EDGE 2019. The first evening saw the channel congregate for a welcome party at the Hamilton Island yacht club, while the main poolside proved to be the perfect stop for a barbecue on the final night.

EDGE 2019: Channel forges new partnerships during evening networking
Show Comments