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IaaS: The Telco Tool for Business Growth

Tom Homer
11/20/2014

During the next few years, it is likely that your enterprise customers will be managing multiple cloud stacks across various departments and ultimately pursuing a mandate to integrate across cloud providers. In many cases, they will look to their established relationships for help with this "sourcing" challenge.

Many believe now is the time to move beyond a reactive response to business demand when considering IaaS (infrastructure-as-a-service) usage scenarios. Instead, customers should consider easy access to IaaS capabilities as a means to enable increased innovation, experimentation, and even the ability to "fail fast" and move on with minimal pain, reduced disruption, or risk to either business processes or IT operations.

A senior decision-maker's role is to be responsive to business requirements and although cost savings have been the primary driver of IaaS adoption, I expect to see innovation in IT to push ahead as the main motivator for deploying IaaS during the coming years. I believe that selecting a telco partner for IaaS will deliver these opportunities.

Challenges for telcos to understand
The same, commonplace, core challenges are faced 24x7 by CIOs in businesses all across the world. There is the need to consistently deploy applications, deliver business processes and deploy offshore solutions across multiple geographic locations. This also needs to be balanced with providing an exceptional end-user experience across the organization on a world-class, high-performance, low-latency global network.

When you factor in that CIOs have to do all of this and keep IT costs at a minimum, while continuing to use IT to innovate business practices, it could be suggested that they face an unenviable task.

This is where IaaS comes into play.

Many CIOs have recognized the benefits that IaaS can bring. While challenges remain, industry research has identified the cloud as a dependable means for delivering IT services and minimizing the cost structure often associated with on-premises deployments.

Naturally, however, there are concerns regarding perceived risks of using IaaS when considering moving across your company assets to a supplier. These include US government policy, data residency and privacy issues, through to data availability, latency and performance. While all are natural causes for concern, it is these very issues that organizations should instead use to evaluate various approaches and commercial IaaS offerings.

Why enterprises are considering IaaS
While concerns about moving company data and applications are understandable, there are many benefits to be had from doing so. Here are three of the big ones:

  • Facilitate increased innovation: IaaS is a cost effective, easy to access cloud-based computer resource that allows businesses greater flexibility to trial and test business functions and ideas. It allows companies to avoid the traditional risks associated with innovation, leading to growth.
  • Help reduce your costs: Crucially, the major benefit of IaaS is in its ability to reduce infrastructure costs, changing the cost structure from capex to opex. Not only is the IaaS service solution attractive from a cost structure and reduction perspective, but the increase in data center investments across the Asia-Pacific will fuel availability and demand for IaaS over the coming years. Doing this will see businesses move from unstructured and opportunistic IaaS usage to focus on more strategic initiatives.
  • Assist the reduction of the IT burden: With IaaS, businesses can quickly configure and provision applications or infrastructure and use advanced tools for service monitoring and management. This reduces the burden of infrastructure and application administration, and IT staff can focus more on differentiating the company strategically.

    What type of IaaS deployment can telcos offer?
    There are a few core criteria that enterprise customers should be considering when looking at making the move, including; the type of IaaS provider (i.e. global or local); the available network and infrastructure the solution is built upon; security; flexibility of the provider and the ability to grow; the level of control available; and collaboration between the IaaS provider and telco partners.

    In short, with so many things to consider it is important for service providers to know their customer and ensure the offering meets their infrastructure needs. Research by Forrester has carved the IaaS provider market into three distinct segments:

    1. Cloud-first providers
    2. Independent managed service providers (MSPs) that have evolved out of the traditional hosting space to deliver their own IaaS capabilities
    3. Cloud platform-based solutions, which include MSPs and other providers that base their offerings on a third-party vendor's cloud platform.

    Cloud-first providers were the clear early leaders in this market, based on a combination of IaaS capabilities, ease of access, and transparency. Telco-based IaaS providers also have the added advantage of owning and operating the infrastructure networks, ensuring the quality of communications services. They can also offer additional benefits and reduced risks for IaaS adoption. For example, many medium-sized and enterprise businesses already work with telcos, having established relationships for voice and other networking services.

    If improved redundancy and security is top of the customer's list, then carrier-grade networks will be the way forward. Telcos have smartly coupled IaaS with their own networks in Asia and their clear advantage is that they can offer all levels of IaaS, from entry-level through to higher-end offerings, backed up with well-defined nodes, in-country data centers, and network redundancy and security. Telcos also understand local regulations and can help enterprises navigate complex compliance and risk regulations on multiple levels.

    Looking ahead
    It is clear to see that the growth of IaaS is creating opportunities for telcos and as the market grows this will only become more significant. There are challenges and complexities for service providers offering infrastructure-as-a-service though and it is not as simple as simply opening a new data center and connecting the first customer. Different enterprise customers have different needs and it is important that these needs are understood. Having said all of this, operating a world-class network will, of course, always be a big advantage.

    — Tom Homer, Head of EMEA and the Americas Enterprise, Telstra Global

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    sam masud
    sam masud
    11/21/2014 | 2:23:13 PM
    Re: Yes, but...
    Agree that telco sounds archaic, and perhaps it's time the industry (LR could lead the way here) came up with a taxonomy for the different types of service providers. And while telco sounds outdated, it still denotes that the company had its roots in POTS world and actually owns its own wires. On the other hand, another company might be just be a long-haul carrier of various services. Futher, to muck things up, the term CSP does not really tell what that company does, since CSP could refer to a telco, cable company or wireless company or MVNO.
    siaras-walsh
    siaras-walsh
    11/21/2014 | 12:15:38 PM
    Yes, but...
    I wholeheartedly agree with Tom but would add the following important points.

    1. Expunge the word "telco" from your vocabulary. The term, short for "telephone company," is hopelessly archaic, harkening back to en era when the principal business of companies like Telstra was providing dial tone. Even "carrier" (short for "regulated common carrier") is dated. Better terms are "network service provider" or simple "service provider".

    2. More important, in addition to providing their own IaaS products, coupled with integrated, on-demand network connectivity, service providers typically have the reach to provide direct (i.e., secure, reliable, bandwidth-specific) connectivity directly into public clouds such as Amazon Web Services (AWS). The allows them to become, in essence, "meta clouds" that offer the best of all worlds. In other words, it's not an either-or situation.

    3. Although Tom doesn't mention it, surely high up on his list of priorities for Telstra and its enterprise customers, is independence from underlying hardware, both in the data center and the network. One of the greatest benefits of cloud is the fact that underlying compute and storage hardware is abstracted away. In order to fulfill Telstra's vision, the same should be true on the network side.

    Yes, telcos service providers have a lot to offer enterprises with regard to IaaS but they need to think even more broadly.
    DHagar
    DHagar
    11/20/2014 | 9:55:41 PM
    Re: International Operators are on this
    Ray, good examples - very interesting.

    I definitely see it as a sign of the future.  I am working with IBM and see them as a leader as well - they are creating some great service models.
    jabailo
    jabailo
    11/20/2014 | 12:29:20 PM
    The Telco...is the Business!
    The way things are going...I wonder if all the business of the future needs is just an idea!

    What can a Telco with SDN and Cloud do for a man with an idea?

    Well, if all the parts are hooked up, once I come up with the concept, it should:

    1) Find me funding, capital

    2) Set up a business structure, legally

    3) Set up an information platform if my product is 2-D and set up manufacturing if my product is 3-D

    4) Build my virtual network for customers to order, for fulfillment, for shipping.  Virutally I should be able to spin up "An Amazon" in a few minutes.

    5) Collect payment with a MasterCard API, etc.

     It's like the "instant website" that many ISP/Hosts provide, taken tothe nTh level.

     
    Ray@LR
    [email protected]
    11/20/2014 | 10:04:54 AM
    International operators are on this
    Here's another operator pitching telco IaaS

    http://www.du.ae/Files/du-White-Paper-The-Business-Case-for-Cloud-IaaS-(Apr-13)-web.pdf

    And another

    http://www.ntt.com/aboutus_e/news/data/20140728.html

    And others too of course -- but the telcos have a way to go before enterprises look to them first, it seems...\

     

    IBM Named Top IaaS Provider

    http://www.informationweek.com/cloud/infrastructure-as-a-service/ibm-named-top-iaas-provider/d/d-id/1252792

     

     

     

     
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