Light Reading
Cloud services are in demand in Asia/Pacific, but the telcos are still finding their feet in the market.

Asia's Telcos Still Figuring Out Their Cloud Moves

Robert Clark
News Analysis
Robert Clark
6/3/2014
50%
50%

The cloud is taking off in Asia-Pacific in a big way, but the region's telcos are still figuring out how to profit from it.

IDC's annual survey of regional enterprises has found that the move to the cloud is accelerating. About 60% of businesses are using two or more cloud services, and just 2% are not using the cloud at all, plummeting from 39% a year ago.

It's a dramatic change in 12 months, but despite the market size -- forecast to be worth US$15 billion by 2017 -- it's not a straightforward business for telcos to crack.

According to Ovum figures, not one telco ranks among the top 10 cloud providers worldwide, and the Asian experience is no different.

Gint Atkinson, network strategy vice president for Tokyo-based data center operator KVH Co., says telcos are still too focused on cost per bit and have too much complexity to deal with.

When KVH provisions a service for a customer, "every little touch and turn of the knob is attached to a service order," he said at a recent NetEvents Asia-Pac conference. By contrast, the web-scale operators "get to just cut right through all of that complexity. And they don't need to sell connectivity, they just sell the whole thing to their customers."

Telcos are still "doing a lot of things that slow things down," he said. "We can't keep on operating this way. We've got to go agile. We need to restructure the service packages and then out of that we can change the architecture of the systems to be much more simplified."

Jon Vestal, vice president, product architecture, at Pacnet , agrees. (See Pacnet Turns On SDN in APAC, US.)

"The whole point of an agile model is fail fast," said Vestal. That compares with the traditional practice of operators to carry on for a couple of years before deciding "Oh, I made a mistake, you throw it away and start all over again," he added.

Kevin Buckingham, Asia general manager for BT Compute, part of BT Global Services , said cloud adoption has been slower in Asia/Pacific than in Europe, where it was "easier to sell a service."

He said telcos were not a "pure cloud play," but he sees opportunities for operators to compete with web-scale players by helping businesses move to the cloud.

Customers are coming to BT asking to transfer their existing infrastructure "server by server" to the cloud.

"It doesn't work like that," Buckingham said. "You've got to have a strategy. You've got to work with your customer to understand where they're going in the next one, three, five or even ten years so that you can help them build that strategy. We have cloud and professional services -- we don't separate the two. Professional services, I think, is the sweet spot for telcos."

KVH's Atkinson said operators shouldn't "play on Amazon's and Google's terms." Telcos and the big cloud players offered different products and services, and telcos' networks are still a critical differentiator. "Operators must keep their infrastructure updated," he added.

The positive is that customers have higher expectations from their telecom providers. "They ask us for five 9s performance. But when Amazon goes down for hours at a time they suck it up. So that tells me the market is very unstable with respect to produce and service definitions, there are different expectations."

The downside is the telcos have to manage those expectations. "Customers are paying for a bigger bundle of service mix. They bought connectivity at five nines, [so] they want database at close to five nines. They want one more package. So definitely if the telcos are going to go into that space, not only do they have to get really good at the product and service side of it, but they have to learn to manage the customer expectations and get their offerings to fit in with the customer's needs and to get recognition when it's deserved."

But the impact of the web-scale players can be challenging, as the experience of Thai broadband services operator United Information Highway (UIH) suggests.

Passakorn Hongsyok, director of network planning and design at UIH, said one of its biggest customers, a bank, had decided to move its email system to the Google cloud. "We had been servicing this customer for the last, say, five years. We had hooked up all their 1,000 over branches throughout the country. But now they're telling us, 'we want to use our enterprise applications on the cloud service.' That was a big story for us internally. And once the bank started doing this, people in the same vertical industry will try to follow suit. And of course people started saying, 'if even a bank does that, why can't we do it?'"

The only response for a service provider is to adapt, he says. "So we have to go out and talk to the cloud people, not just Google, but we have got to be on Amazon, one of the biggest players, and on Microsoft Azure."

— Robert Clark, contributing editor, special to Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (4) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
Cablevision's New WiFi Try – Freewheeling Enough?
Mari Silbey, Independent Technology Editor, 1/26/2015
Overture Builds on NFV Foundation
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/27/2015
LightSpeed Looks to Plug the Gigabit Gap
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/23/2015
Parks Predicts HBO OTT Success
Mari Silbey, Independent Technology Editor, 1/23/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Weekly Executive Interview
Join us live for Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, Universal, Intel and Microsoft, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he has to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.