Tuesday, April 10, 2012

Telcos will dominate the clouds tomorrow?

The Telcos are saying  they are the right incarnation to make the cloud trusted and ubiquitous.  Telecoms Cloud Services Summit will take place in two weeks, 23-25 April 2012 in Berlin

According to Heavy Reading  only 13% of the enterprise IT is committed to cloud in 2013 leaving a plenty 87% traditionally spent IT budget to be disrupted by the cloud.

Amazon Web Services, RackSpace, OpenStack, Citrix, Eucalyptus, KVM, VMware and other gods of the cloud are not complete solutions. In a recent twiter exchange illuminaries like Lydia Leong (Gartner),  Randy Bias (CloudScaling) and George Reese (enStratus) agreed that the IaaS platform is only 10% mature.

This is my blog on this incompleteness, underlying the future opportunities.

"The cloud is not the cloud without the network." Those were the words of NTT America CTO Doug Junkins at Cloud Connect conference in Santa Clara, CA.  I said the same thing in this blog Why Include the Network Virtualization to the Cloud . As the Telcos own the networks, this is a beginning of an idea that will change both the Enterprise IT and Telcos for ever.

The Ericsson discussion paper The Telecom Cloud Opportunity acts as a Telco 2.0 Manifesto
Ericsson envisions a Networked Society, a world of 50 billion connected devices, by the end of this decade – and cloud computing, along with mobility and ubiquitous broadband, is playing an instrumental role in its creation.

Telecom operators have recognized it as a source of new revenues, with global investments in cloud services projected to more than double from an estimated US$55 billion in 2011 to almost US$130  billion annually by 2015.

By leveraging existing network-based features and their expertise in managed services, telecom operators enjoy many unique advantages over other cloud providers. The explosive growth of mobile access into the cloud also plays strongly to operators’ strengths. Ericsson sees three major roles through which telecom operators can align themselves in the cloud value chain:
  • Managing cloud connectivity,
  • Delivering cloud-based capabilities, 
  • Leveraging network assets to enhance cloud offerings.
In addition, telecom operators ...  can also choose to simultaneously  commercialise those cloud applications to open up opportunities in traditional markets such as outsourced billing for over-the-top (OTT) players, or as a vehicle to enter emerging segments like cloud-based machine-to-machine (M2M) platforms for vertical industries. Operators must consider cloud computing as an integral part of their strategies. 
This is beautiful to read and it will happen. But the technology usable by a telco needs to go a long way

Today most cloud IaaS interfaces look similar to AT&T Cloud Architect Create My Cloud


Data Center
Quantity
Cores
RAM (GB)
Storage (GB) 2
Additional Storage (GB)3
Operating System
OS Specific Add-On

Hourly:  $0.100
Monthly: $50.00









This embodies the idea of a how a buyer on line acquires infrastructure. Most buyers have no idea which data center to choose (perhaps closest,? or larger capacity), how many cores, what storage to get, and so on. Also, if I select something (say 20 16 x 2.0 cores). The price is  $15,800 per hour or $10,220 per month.  How do I know whether I did not buy an oversize cloud? Should I need more resources, do I ask for them manually or the cloud is autonomic?

If a Telco takes over the cloud business , they must make the access to clouds (public, private) in a more more intuitive. Perhaps AT&T message with a price per hour 50% higher than a price per month, is "forget about cloud, let's talk about hosting." Prices of  fifteen grand per 10 hours are not manageable via web with credit cards. The AT&T hourly prices not an incentive to buy, au contraire they are a deterrent to buy, because at this stage in life they are not able to provide fast enough clouds for a duration of one day only

The cloud IaaS offerings today  are  processors, memory, storage while the cost   of the bare iron is peanuts compared to cost of networking.  Network virtualization (about 60% of the cost of the cloud) can expose as billable, premium services like (1) secure socket layer (SSL), (2) packet inspection,  (3) quality of service (QoS), traffic prioritization or data encryption. The network revenues can double and triple the cloud revenues

I suggest pre-configured clouds,  labelled like in  the fashion industry S, M, L XL, XXL . Or clouds optimized for Big Data analytics  or for SAP Oracle enterprise apps. Clouds for Games and Personal Clouds. Etc.

To develop these products I would use modern product management methodologies,-  see Working Backwards in Product Management - based on the post Steve Jobs era.

Addison Snell, the CEO of Intersect360 Research has tweeted: "You can have the best technology, but without skilled people it probably won't work out for you."

This is the largest hurdle the large Telco companies have to overcome. They have to attract and retain creative people and make them decision makers.

As I wrote elsewhere in this blog:
 There is an extraordinary connection between entrepreneurship in creativity!  The bottom line, creative must come out of some tolerable chaos.  The creation involves contraction of the known corporate and HR dominated world, to make room for a new, imperfect oasis of apparent misfits that will generate creativity so we all can be all what we can be.
Large companies - and Telco were large companies who re-invented themselves - thrived on prestige plus  a false sense of security. They learned their lesson that "prestige is just fossilized inspiration". (Paul Graham). Telecom cloud creation involves a new breed of executives a-la-Steve-Jobs (1) the ability to spot adequate cloud technologies, made by founders who never knew how a telecom provider works, (2)  to orchestrate these technologies in order to (3) deliver cloud services as easy to use as building a car on the web, offering always the option "let us find it for you".
Ease of use and ease of billing plus affordability is name of the game


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