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Verizon Relocates Cloud Optimism

Carol Wilson

A week after a top executive admitted enterprise adoption of cloud computing has been slower than expected, Verizon issued a major report showing that enterprises are warming up to cloud and actually using cloud services for more of their internal applications. (See: Enterprises Not Rushing to Embrace Cloud.)

John Considine, CTO of Verizon Terremark, says those viewpoints aren't conflicting: Enterprise adoption of cloud didn't take off as quickly as expected but has now reached a tipping point, and should soon be accelerating.

One key reason for that optimism is that Verizon's "2013 State of the Enterprise Cloud Report" details a 100 percent increase in memory use and a 90 percent increase in storage use between January 2012 and June 2013. That's an indication that enterprises are moving more intensive applications into the cloud, and not just Web-based apps and R&D projects. The growth in the number of virtual machines (35 percent) is significantly smaller.

"We are seeing that customers are putting larger virtual machines into our environments," Considine tells us. "The big growth we have seen in terms of memory and storage shows they are putting more serious things into the cloud. Internal-facing applications such as ERP [enterprise resource planning] are starting to show up in the cloud."

Verizon will be telling this story both to CIOs and to CEOs, Considine adds, because IT folks need to see what their peers are doing, and corporate executives need to understand how their industries are moving to cloud. Both groups will be influenced by what competing firms can successfully undertake in the cloud.

"The benefits of cloud are immediate," Considine says, and those include reduced capex, faster provisioning of new resources as needed, and reduced cost and risk associated with in-house management of IT resources.

Considine admits that last point isn't a positive one for IT departments, and they may consider cloud a major job-killer. Verizon Terremark believes there is still IT work to be done in the virtualized world, but it is less focused on managing physical facilities -- stacking and racking servers, replacing power supplies, etc. -- and more focused on managing virtual facilities through software, including the performance of specific applications.

"Instead of looking at it as 'my job is going way,' we think IT people will have opportunities to move up a level," Considine says. "But there needs to be retraining."

— Carol Wilson, Editor-at-Large, Light Reading

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Carol Wilson
Carol Wilson,
User Rank: Blogger
8/30/2013 | 11:39:34 AM
Re: Verizon Relocates Cloud Optimism
That's something else that Verizon talks about -- it's taking longer to get enterprises moving on cloud but once they start to move and have succeses, they are faster to move more into the cloud. 

I think we are going to hear service providers in general talking up their cloud success stories because they think that success creates a higher comfort level for IT folks and may even put some competitive pressures on companies within some industries to adopt cloud in order to keep their IT costs in line while becoming more agile. 

C Chappell
C Chappell,
User Rank: Blogger
8/30/2013 | 5:47:11 AM
Re: Verizon Relocates Cloud Optimism
Another point a major European telco cloud provider makes is that sales cycles for enterprise cloud services are very long - up to two years - and that deals start very small, but once the services are in place, usage can ramp up very quickly. It's all about confidence. But it makes revenue and capacity planning difficult for the provider. 
C Chappell
C Chappell,
User Rank: Blogger
8/30/2013 | 5:43:25 AM
Verizon Relocates Cloud Optimism
Interesting about storage - it's certainly a service other operators are talking about - one European operator told me recently that it can't add disk space fast enough for all the data its customers want to throw at its cloud. The big data revolution and regulation means that nothing is getting thrown away - and if enterprises want a cheap (and country-specific) place to put it, they're attracted by telco cloud.
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