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Operators face challenge of cloud services
18 May 2010
Management World 2010: Cloud services are a huge opportunity for telecoms operators, the TMForum conference heard, but they are also a disruptive force
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[TMForum]
[Management World]
[AT&T]
[Deutsche Bank]
[France Telecom]
Enterprise customers see cloud computing as a way of avoiding being locked in to technologies, and operators face losing control of linking their customers to content — yet telecoms operators see cloud services as a way of being more than providers of dumb pipes.
A panel session on the first day of the TMForum’s Management World conference in Nice illustrated perfectly the way the telecoms industry sees cloud computing, or cloud services, as a huge opportunity — but also as a disruptive force that is a huge risk to established business models.
“We’re in an arms race for the technology,” said Sean Kelley, group CIO at Deutsche Bank, at the conference session. He believes that enterprise customers see that one of the advantages of cloud are “to avoid lock-in to underlying technology”.
Thierry Zylerberg, executive VP at France Telecom, said: “Service providers will be major actors in this new world of cloud. Service providers are trying to be more than physical pipes.”
A key relationship is trust, said Zylerberg — something echoed by another panellist, futurologist Gerd Leonhard: “The less physical stuff you offer the more it’s about trust,” he said.
Security is a big concern of the enterprise buyer, said Kelley — especially for a bank with fiduciary responsibility and with laws governing where it keeps its data. “We have to be able to contain data in country boundaries,” he said at the Nice conference.
It is too early to see the business models for cloud services, admitted Zylerberg. “We haven’t really see the fully fledged implementations.” However this is starting to change: France Telecom has won a significant contract to store medical imaging for the Paris region, using cloud technology.
“We will be hosting an enormous amount of data. The issue of security and trust is very important. We will need to put in place a lot of safety and security measures. You will see regulations, national or regional, to protect the data of customers.”
Kelly and Leonhard both likened the emerging cloud market to the energy market. “Data is the new oil,” said Leonhard. Kelley forecast that “there will be futures trading in computing, to hedge your cloud market”.
But cloud services will be taken up in a number of markets over the next five years, including finance, education, health and entertainment, said Leonard, and will create opportunities for services where there are currently none — for example banking in emerging markets. “But we will need new business models. You can’t just transfer them. A bank in the cloud is not like an online bank.”
Separately from the Management World panel, AT&T’s cloud evangelist Joe Weinman told Global Telecoms Business at the conference that the company is starting to offer cloud services on a wholesale basis to other telecoms operators.
He believes that the opportunity for cloud computing is in association with an existing corporate data centre, providing capacity for peaks in demand. “For virtually any enterprise in virtually any industry a hybrid solution makes sense,” he said. The cost will be significantly lower than the alternative — of providing extra capacity within the existing corporate data centre.
“The beauty and wonder of statistical multiplexing shows this,” he said — smoothing peaks in demand across a number of users. “Everyone has different peaks. If you share capacity the peaks don’t match and the average unit cost goes way down. A large global provider like AT&T has the benefit of statistical multiplexing.” GTB
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