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Is the Cloud Eating the World?

Jason Meyers

CHICAGO -- Light Reading's Big Telecom Event 2014 -- Heavy Reading senior analyst Caroline Chappell kicked off a panel on enterprise cloud services here at BTE by invoking a popular Marc Andreessen quip: "Software is eating the world."

"Even physical products have been designed and manufactured with the help of software, and now the most-used products on the planet are based on software," Chappell said. "That's driving this massive need for an agile infrastructure -- an infrastructure that's managed by software.”

That sentiment set the stage for a spirited discussion about the importance of cloud services -- in particular whether telecom network operators are best equipped to provide those services to enterprises.

The general consensus of the panelists was that the combination of network ownership, service delivery capability and customer familiarity do make telecom service providers the best cloud providers.

"There’s no doubt in my mind that telcos that have access to both network and cloud resources really have a leg up," said Nirav Modi, director of software innovations for Cyan Inc. "Customers are worried about their experience when they stream the movie or send a large file. Telcos can control that experience."

The panelist representing the voice of the cloud provider concurred that when it comes to the cloud, network ownership and the ability to manage cloud services is what gives service providers that edge over the Amazons of the world.

"Being a pure-play hosting provider is becoming less and less viable," says Chris Nicolini, senior vice president of data center operators for Windstream Communications Inc. (NYSE: WIN) "If you buy cloud services from Amazon you still have to manage them. We'll meet the customers wherever they want to be met."

Panelist Shauli Rozen, director of product strategy for Amdocs Ltd. (NYSE: DOX), supported the notion that network operators have the best insight into customers' cloud needs, adding that one of the things enterprises often want from their cloud providers is to hand off the hassle -- which is, after all, the idea behind the concept of managed services.

"CIOs want control over experience, but they don't want to know every nitty-gritty detail about the service," he said. "They want to have the carrier manage it for them."

Lane Patterson, vice president of cloud platform engineering for Symantec Corp. (Nasdaq: SYMC), was, not surprisingly, very focused on the security aspects of enterprise cloud services. "The key to the maturity of the cloud," he said, "is about earning trust -- about getting the trust of the CIO, and in some cases a broader compliance community."

Despite the agreement among panelists that service providers are in a good position to serve the enterprise with cloud services, Rozen of Amdocs said many of them still have to prove to the CIOs of the world their business focus.

"Most carriers still make their money from consumers -- selling voice and data to consumers," he said. "Making the shift to enterprise -- and being able to operate the cloud for enterprises -- is a huge challenge.

— Jason Meyers, Contributing Editor, Light Reading

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6/20/2014 | 6:43:27 AM
The Emperor's New Clothes
Reading the articles from BTE and other recent industry symposiums reminds me of the parable of the Emperor's New Clothes.  

Everyday vendors and trade consultants trot the Emperor out and assure him how beautiful his new outfit will look.  And everyone else goes along for fear of rubbing his highness the wrong way.

The reality is that cloud economics from the core at every layer are eating the balkanized edge access providers; aka ISPs, MNOs and MSOs.  The current trend is network densification out to the edge to support rapidly developing 4K VoD, 2-way HD video collaboration, seamless mobile BB, and the internet of things markets.

The horizontal, digital, packetized train left the station 30 years ago and few have woken up to the fact.  Edge access providers need to restructure rapidly and imbue a culture that wakes up everyday and asks, "how do we provide more for less to more people across more contexts?" 

Because that's what the core application and content providers (OTT) are doing.  And they have the benefit of a complete and holistic view of demand ex ante.  That's like pitting a mobile army with cannon and telescopes up against a fortified castle; in other words sitting ducks and ultimately indefensible.
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