In preparation for the expected growth in demand from enterprises for cloud and other hosted services, AT&T added to its European footprint today with the opening of its second Internet Data Center in London. (See AT&T Opens London Data Center.)

The move, part of the carrier's US$1 billion investment in its global capabilities, has, according to the carrier, been designed to "support high-density computing" that will allow customers to put their faith in hosted and cloud-based services. (But the carrier isn't saying how much it invested in the new London center.) (See AT&T's $1B Repeat and AT&T Shifting Capex to App Support.)

Steve Caniano, VP, Hosting and Cloud Services, at AT&T, says managed services –- particularly SAP AG and Oracle Corp. ERP (enterprise resource planning) applications -– are growing in popularity, along with managed messaging and the carrier's Synaptic Hosting service.

And enterprises are warming to cloud services too, says Caniano. "In the past year there's been a shift from the exploratory stage to the trial and use case stage. The 'if' has been removed -- now it's about 'how' to use the cloud," says the AT&T man.

Demand differs from customer to customer, but there aren't any companies jumping in with both feet just yet. "I don't see anyone doing a forklift shift to the cloud – there's no compelling reason to do that," he says. Instead, they are adopting cloud services when new decisions about technology or business practices are made. "It's when customers introduce a new application or refresh a technology -- those are the decision points."

Of course, AT&T is just one of a number of service providers battling for the hearts and wallets of enterprise users when it comes to the purchase of networking, hosting, and cloud services in Europe. (See Orange, Cisco, et al. Forge Cloud Alliance, Colt Reaches for Clouds , Interoute Extends MPLS to the Office, Cloud Formation at Verizon Business, Orange Unveils Cloud Formation, and BT, Microsoft Get Cloudy .)

So is the intensifying competition squeezing AT&T's margins in Europe? Caniano says there's no sign of any price pressure at the moment. "In Europe it's stable. There are a number of rivals, and most deals are competitively bid, but the business is healthy -- we wouldn't have come into this market if we didn't think it was healthy."

— Ray Le Maistre, International Managing Editor, Light Reading