Are public cloud services a dumb move for telcos?
- 21 March, 2016 04:14
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.