DT Ups Cloud Challenge to Google, Amazon

Deutsche Telekom has launched a new infrastructure-as-a-service (IaaS) offering on Cisco's cloud platform and says it plans to compete "more fiercely" against web-scale giants like Google and Amazon in the market for public cloud services.

The announcement comes several months after the German incumbent announced a public cloud partnership with China's Huawei Technologies Co. Ltd. and touted its security, systems integration and consulting capabilities over those of Google (Nasdaq: GOOG) and Amazon.com Inc. (Nasdaq: AMZN). (See DT Takes Cloud Fight to Google, Amazon.)

Deutsche Telekom AG (NYSE: DT) has also indicated it plans to compete on pricing against the web-scale giants: Its latest offering will be available from €0.05 ($0.05) per hour, without minimum purchase requirements and contract periods, with additional storage costing from €0.02 ($0.02) per gigabyte.

The operator's plans contrast with those of the UK's BT Group plc (NYSE: BT; London: BTA), which has previously downplayed its ability to compete against the web giants in this area.

"I don't see us trying to take on Amazon," said Neil Sutton, BT's vice president of global strategic alliances, during a recent conversation with Light Reading. "Unless you have global hyperscale, I'm not sure how profitable it would be." (See BT to Unveil New Cloud Partners by Christmas.)

Deutsche Telekom is set to hold a 12% stake in BT, making it the company's biggest single shareholder, following the UK incumbent's £12.5 billion ($18.8 billion) takeover of EE , a UK mobile operator that is currently a joint venture between Deutsche Telekom and France's Orange (NYSE: FTE). (See BT Locks Down £12.5B EE Takeover Deal.)

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However, Deutsche Telekom reckons its systems integration and consulting capabilities may give it an additional advantage over Google and Amazon, and it has also been promoting its security credentials in this market.

With data centers based in Germany, and subject to the country's stringent data protection laws, Deutsche Telekom believes it can guarantee organizations a level of security and data protection that US cloud providers cannot.

Covata, a data security business, has been unveiled as the first customer of the new IaaS offering, having already been involved in a pilot of the service, while unified communications player Unify has also expressed interest in it.

Deutsche Telekom says that software-as-a-service and platform-as-a-service offerings based on the Cisco Systems Inc. (Nasdaq: CSCO) technology will follow in early 2016.

The company's aim is to double annual revenues from cloud services between now and the end of 2018. It claims to have enjoyed double-digit growth in cloud revenues last year.

Existing customers of its cloud offerings include Shell, Daimler and Thyssen-Krupp, while German software giant SAP AG (NYSE/Frankfurt: SAP) is another major cloud partner.

— Iain Morris, , News Editor, Light Reading