Today, the biggest technology trend is ‘cloud computing’, and the Indian operators are also lapping it up. However, many believe they have a lot of catching up to do. Operators are fast realizing the importance of cloud computing, and the tangible benefit it will bring to their revenue.
“One cannot overlook the fact that telecommunications providers are latecomers to the cloud computing market. In order to avoid getting left behind, telecommunications providers should step on the gas, and evolve quickly into being cloud computing service providers,” says Animesh K Sahay, head of telecom business, India and SAARC, Juniper Networks.
Recently Reliance also launched its cloud computing solution; and according to the vendors, there has been an interest from other service providers as well.”We believe the market will move from $16 bn to $42 bn by 2012. Actually cloud computing is a necessity for an operator in today’s environment. It is a business imperative, and operators will have to move towards seamless integration of data. It will also give new revenue streams to an operator,” says Karan Datar, CEO, WebEx.
Many believe that the operators are best placed to offer cloud based services. They increase the value of carrier networks in multiple ways, and create new roles and revenues for service providers. Clouds will go a long way in increasing network traffic and utilization, and consequently transport revenues.
“Telcos are best placed to offer cloud based services, as they have the underlying infrastructure of network connectivity and data centers available to them. Moreover, the sheer scale of operation enables them to offer cloud based services to multiple clients,” says Simon Robin, head, managed services, Tata Communications.
There are many tangible benefits associated with cloud computing for telcos. “Other than being consumers of cloud based services for internal use, telecom operators can also have provision for cloud infrastructure as a service for their customers. We see a lot of potential for cloud based services for all companies, which require high compute power for short intervals of time; or for application service providers who need to run test & development for their customers. Some of the other benefits are faster deployment time, flexibility, tangible cost advantages, and lower management cost,” adds Robin of Tata Communications.
The company has already invested in cloud based services. “Tata Communications has understood the advantages of cloud based services quite early, and has done the desired investments to roll out the different flavors of cloud services. The virtualization service has already been rolled out, and public cloud based services are being launched,” informs Robin.
|The Cloud Vantage|
Reliance has recently launched Reliance cloud computing services, which is basically a hosted infrastructure service for its customers, based on the Microsoft platforms. The company will provide enterprises and SMBs in India access to a variety of enterprise scale IT solutions, applications, and services on the pay-as-you-go model.
“Reliance Data Center will deliver access to enterprise-class scalable, secure, and reliable hosted IT infrastructure to help large, mid-sized, and SMB companies leverage cloud computing technologies to drive business benefits. This is part of our long- term vision to continuously provide the latest and the best technology to our customers, so that they always enjoy a business edge against their competitors,” says George Varghese, president and head, enterprise business, Reliance Communications.
One of the key drivers of adopting cloud computing is cost. Currently, rolling out an IT infrastructure to support a company can be very prohibitive financially, especially for smaller companies. And IT infrastructure is not just the cost of acquiring the software. The company would also need to employ people with the right skills, people need to be trained, maintaining and upgrading the software, additional servers to host applications, the list goes on. On the other hand, cloud computing provides a very accessible and affordable means of tapping on these resources of the cloud providers by paying a much lower fee. However, there is also the danger that an organization may end up paying more for cloud services, because they tend to be treated as opex, and it is easy to exceed the cost expectation after they are all added up.
In order to avoid being left behind, telecom providers should step on the gas, and evolve quickly into being cloud computing service providers
Animesh K Sahay, head of telecom business, India and SAARC, Juniper Networks
Telcos are best placed to offer cloud based services, as they have the underlying infrastructure of network connectivity and data centers available to them
Simon Robin, head, managed services, Tata Communications
According to the Indian economic survey 2009, it has been envisaged that the number of broadband and Internet subscribers would reach 20 mn and 40 mn respectively by 2010. With the increasing demand for a reliable and faster network, cloud computing will help in improving the network, and caters to the growing needs of users.
Not surprisingly, sensing the demand, cloud computing is also one of the focus areas for vendors. Most vendors believe that the demand for cloud computing solutions is likely to explode in the future.
One of the significant advantages of cloud computing for telcos is that they can enjoy two revenue streams. “Cloud computing presents a significant opportunity for network service providers who are ready to grasp it. By physically delivering cloud based services, telecom providers can enjoy two revenue streams-one is the revenue from the end-user, and the other is the revenue from becoming cloud based providers,” says Sahay from Juniper Networks.
There are strong opportunities for service providers, who have already mastered the complexity of operating large data centers. They are better positioned to pre-empt markets for cloud computing, if they can utilize the existing service infrastructure and management systems. Telecom companies can grasp these opportunities by leveraging their inherent market advantages in having an IP infrastructure and operating capacity, that goes far beyond those of the other IT service providers.
Telecom providers can play a very crucial role in combining their existing network infrastructure with a new wave technology like cloud computing. Analysts believe that the need of the hour for these providers is to buck up, as they are already being left behind in the race.
The biggest concern of organizations in adopting cloud computing is data confidentiality and auditability, which have topped the list of primary obstacles according to a recent survey of over 1,100 Indian business technology professionals.
“While data confidentiality and auditability (24.5%) topped the list of primary obstacles for the use of cloud computing technologies, performance unpredictability (20.1%) appeared to be another key factor dampening adoption levels,” says the report. Data transfer bottlenecks (17.5%) and data lock-in were next on the list of factors as reported by respondents. However, clearly the advantages outweigh the disadvantages.
Regarding challenges that vendors are facing, Karan Datar of Cisco says, “Telcos are vertically integrated, and cloud computing has a different business model. The ecosystem and infrastructure requirements are different. Another challenge is educating the end-user about cloud computing. However, service providers are very positive about it, and many of them are evaluating this.”
Going forward, the service providers will start using more and more of cloud to increase their revenue. It is a case of better late than never.
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