Telcos Cautiously Consider Enterprise PaaS
Certainly enterprises are looking at outsourcing to the (public) cloud to reduce operational costs, but interacting with public cloud providers such as Amazon.com Inc. (Nasdaq: AMZN) requires a level of technical competence that many enterprises – especially the vast majority of companies that are not "born on the cloud" – lack. Colt, Dimension Data , GoGrid Cloud Hosting , Savvis (Nasdaq: SVVS) and a host of other service providers are stepping in to fill this gap, helping enterprise customers migrate onto standardized, virtualized and "elastic" infrastructure along the lines of Amazon AWS, but with a superior service wrap and more integration with the enterprise's non-"cloudified" platforms. They are even providing enterprise customers with pay-as-you-go access to hosted, standard applications.
But currently missing from most cloud service providers' strategies is what to do about migrating enterprise application development to the cloud. Most enterprises have some level of software development function to differentiate their products and services, their operational effectiveness and/or their degree of customer intimacy, whether they employ professional developers and/or harness the expertise of tech-savvy "citizen developers."
A combination of the economic times and new business challenges – application backlogs that are rising faster than ever, and the need to respond to the digital "app" era and IT consumerization (mobile, social networking, big data) – are driving mainstream enterprises to look at moving whatever software development function they have to the cloud. Cloud-based development environments offer opportunities for greater productivity through higher levels of task automation and collaboration, as well as promising access to new types of development tools and models needed for a next generation of native cloud-based enterprise applications.
In fact, at the TM Forum's Management World in Dublin in 2011, several financial institution members from the TM Forum's Enterprise Cloud Leadership Council pleaded with telcos to provide them with development platforms in the cloud that would allow them to experiment with up-and-coming programming languages and middleware. Telcos remained unmoved – or possibly uncomprehending. As the latest Heavy Reading Service Provider IT Insider, "Enterprise PaaS: What's In It for Telcos?," points out: In the past year, AT&T Inc. (NYSE: T) stands out as one of the very few cloud service providers from a telco background that has launched a platform as a service (PaaS), although this is initially targeting "citizen developers" creating business productivity applications.
Perhaps this lack of activity around PaaS is not surprising. After all, enterprise PaaS is a large, messy, fragmented and controversial area. Application development technologies are in flux. The pace of change in target devices, let alone business requirements, is relentless, and telcos have enough on their plate rolling out other services in the cloud stack, such as IaaS and SaaS. Yet as Internet company after Internet company has shown, an agile ability to create software is critical to enterprise competitiveness today. If telcos overlook the strategic nature of the PaaS, they could be making a costly mistake. Google (Nasdaq: GOOG) and, more recently, Amazon have brought out their own PaaS, demonstrating these companies' understanding that where the next generation of cloud-based apps are developed will have a strong influence on where they eventually run. Cloud technology providers VMware Inc. (NYSE: VMW), Red Hat Inc. (NYSE: RHT), Microsoft Corp. (Nasdaq: MSFT) and IBM Corp. (NYSE: IBM) also see the PaaS as a means of cementing their relationships with enterprise customers.
Enterprise PaaS: What's In It for Telcos? acknowledges that telcos face formidable competition in the PaaS market, but also huge opportunity. Just as with other cloud services, telcos can exploit their considerable "carrier cloud" advantages to provide enterprise "test and dev" functions with a robust, trustworthy infrastructure that will encourage them to move more development and operational applications to the cloud over time. The report discusses the pros and cons of building, buying and partnering for PaaS, but whatever the strategy, telcos shouldn't leave it too late. Otherwise they risk demand for related cloud services draining away to competitors.
— Caroline Chappell, Analyst, Heavy Reading Service Provider IT Insider
Enterprise PaaS: What's In It for Telcos?, a 36-page report in PDF format, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Service Provider IT Insider, priced at $1,595. Individual reports are available for $900.