Why Verizon Needed a Cloud Reboot
Last week wasn't the first time Verizon took on Amazon in the cloud -- that actually happened three years ago, when Verizon launched an on-demand cloud service for small businesses designed to be as easy to deploy as Amazon Web Services (AWS). (See Verizon Takes On Amazon With SMB Cloud Offer.)
What Verizon Enterprise Solutions has just announced, however, was a surprising remake of its enterprise cloud offer into the new Verizon Cloud, addressing what the company has admitted are issues that slowed cloud adoption by the full range of potential business customers, from SMBs right up through to large enterprises. And this time around, the operator may well be putting itself in position to challenge Amazon Web Services Inc. . (See Enterprises Not Rushing to Embrace Cloud.)
I say the move was a bit surprising because Verizon has been selling cloud services since even before it acquired Terremark in early 2011, after which it became even more aggressive in the cloud services market, buying Cloudswitch and continuing to develop its portfolio. (See Verizon Taps Terremark for $1.4B and Verizon to Buy CloudSwitch.)
So this almost seems to be late in the game for a complete overhaul, yet that is what Verizon has done, though it describes it as a "re-invent" rather than overhaul.
So why the need to re-invent at this stage?
Because, as Troy Garrison, VP-Cloud Experience, tells me, Verizon was still losing business to AWS, and it was still seeing some of its enterprise customers reluctant to move certain apps/IT processes into the cloud because of ongoing uncertainties. By re-inventing its cloud services and adding a cloud storage product and predictable cloud computing results based on the level of performance chosen by the customer, Verizon is able to go head-to-head with AWS. And by adding software-defined networking (SDN) for flexible customer self-provisioning of network resources, Verizon hopes to differentiate itself substantially from the admitted pioneer and still dominant cloud player.
"The problem people have with cloud is not being able to predict performance of network and storage," Garrison says. "Our enterprise customers told us they couldn't put critical workloads out where they couldn't predict the performance. We are now guaranteeing that."
The SDN capabilities will allow Verizon's cloud customers to set up networks in "whatever IT scheme they want," Garrison adds. "We do not provision the network for them -- we allow them to do it themselves."
That's important because IT departments did not like being told they had to change their approach to buying network resources in order to buy cloud services, Garrison says.
Verizon is rolling out these new capabilities beginning in the fourth quarter of this year.
Another notable aspect of Verizon's re-invention of its cloud services is that it was done in-house. Verizon developed its own software that is running on Advanced Micro Devices Inc. (NYSE: AMD) chips and micro-servers. Garrison says that happened in part because Verizon couldn't find what it was looking for among its commercial suppliers. But he also admits the company wants to be in control of its cloud services and offers, and developing those capabilities in-house means Verizon isn't at the mercy of any other company's development schedules or processes.
Given the investment Verizon made in both Terremark and Cloudswitch, the in-house approach shouldn't be a surprise -- Verizon has acquired substantial expertise in this space. And clearly, given the essential role that cloud services are expected to play in Verizon's future, the company is enjoying the ability to control its own destiny.
Speaking of control, I'm wondering what the mobile cloud might look like, once Verizon is in full control of its wireless offshoot and in position to more tightly link its now-separate organizations.
— Carol Wilson, Editor-at-Large, Light Reading