Verizon Takes On Amazon With SMB Cloud Offer

Verizon partners with Terremark to offer pay-as-you-go computing services aimed at SMBs, a market where Amazon has already made ground

September 14, 2010

3 Min Read
Verizon Takes On Amazon With SMB Cloud Offer

Verizon Enterprise Solutions is going head-to-head with Amazon Web Services Inc. , Rackspace , and other Web-based cloud computing providers with the launch today of a pay-as-you-go Computing as a Service (CaaS) offering aimed at small to mid-sized businesses (SMBs).

Verizon says the new service brings the best of its enterprise CaaS offerings -- it's based on VMware Inc. (NYSE: VMW), is fully redundant, and highly secure -- but has no contract terms or minimum commitments and can be ordered through a simple Web interface.

Although Verizon developed its own enterprise CaaS offering with VMWare, the carrier opted to work with Verizon Terremark , a cloud computing services provider, to offer its new CaaS service for SMBs. (See Verizon, VMware Create Cloud Services and Verizon Offers Cloud Lessons.)

"We are bringing to market a cloud computing service specifically designed for the needs of our small to mid-sized business customers," says Patrick Sullivan, director of mid-tier product marketing for Verizon. SMBs have the same needs for cloud computing as larger businesses -- they need to expand their computing capacity without investing capital in servers and hiring technical staff, but they are more cautious of committing to a term service.

Working with Terremark will enable Verizon to get into the market more quickly than if it had developed its own SMB offering from scratch, says Melanie Posey, research vice president for IDC .

"They had a choice -- get something into the market now, or wait to roll their own and take a chance that Amazon and others would take this market," Posey says. "Amazon is already out there with traction and market momentum, so Verizon has to get going right now."

Verizon contends it has some advantages over other Web-based cloud computing offerings, including: its use of the VMWare Hypervisor for redundancy and resilience; the deployment of load balancers for performance; Verizon's in-house security, including firewalls; the ability to create custom access lists for data; and the option to turn down cloud computing capabilities but not delete created content, allowing the customer to shift instead to a cloud-based storage offering.

SMBs may also be more comfortable working with Verizon, says Jeff Kaplan, managing director of consultancy THINKstrategies Inc.

"Some SMBs will be more comfortable buying CaaS from Verizon because of their established relationship with the company and greater confidence in the long-term viability of its services," Kaplan says.

That includes having established relationships with Verizon's customer services operations, where staff are trained to deal directly with customers on the phone, adds IDC's Posey. "That's not always the case with Web-based services," she suggests.

Verizon's SMB sales force will be bringing the product to its customers, telling them how they can click one button on the Verizon services Web page to purchase on-demand computing, Sullivan says.

The service is billed monthly, in hourly increments, based on credit card numbers entered and verified at the outset. After payment information has been secured and other security checks run to make sure the purchase is legit, an SMB can be up and running, configuring virtual servers, within 15 minutes, Sullivan says.

Pricing is as low as 3.7 cents per hour, with no minimum usage conditions or term plans, and all charges can be reviewed and accepted at the time the purchase is made.

Verizon's expectation is that SMB customers that start out using the pay-as-you-go plan could well graduate to other CaaS options in the Verizon portfolio, and even migrate their own applications onto Verizon's cloud platform.

Typical SMB applications for CaaS could include the development of Web-based services and the provision of supplementary computing resources to help such businesses as retailers or travel agents to cope with seasonal demand.

— Carol Wilson, Chief Editor, Events, Light Reading

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