Multinationals increasing need for on-demand computing has enhanced telcos' status as cloud providers

As uptake of cloud computing services  by multinational corporations takes off, Ovum research indicates that the credibility of telcos as trusted providers in the space has increased significantly in the past year.

With ratings increasing from 37 per cent in 2010 to 49 per cent this year, telcos are now in third position behind traditional IT service providers/ integrators (61 per cent) and web-based service providers (58 per cent) when it comes to corporate trust for cloud implementations.

Evan Kirchheimer, practice leader for Enterprise Services at Ovum, said that telco providers’ control over the networks on which cloud services are offered gives them a “compelling advantage” over other cloud providers, as it allows them to offer end-to-end service level agreements (SLAs). “This allays many of the security concerns enterprises have expressed over use of the public internet to access cloud services and general security, data governance and loss of control,” he said.

According to Matt Key, managing director of enterprise for Cable and Wireless, trust in telcos is building because “the role of the network has changed fundamentally over the last three-to-five years; they have gone from being incidental to critical to the business.”

“Cloud technology is based on propositions telcos already offer: assets, network, scale, flexibility, agility,” says Key, adding that these  are well placed to leverage their experience in areas such as managed hosting and data services to offer other services in the cloud, including compute capacity.

Kirchheimer says that while people tend to think about cloud only from a software-as-a-service (SaaS) perspective, increasing interest in storage and computing power is contributing to a more prominent role for telcos. Citing examples such as computing-on-demand, the flexibility to add or remove services as needed and reduced capex costs, Kirchheimer says that telcos offer end-users the kind of governance and service level frameworks that businesses may be unable to guarantee for themselves internally. With Key stating that the role of the CIO has evolved to become one of business-centric enabler, it’s increasingly the case that high-cost IT functions are looking to streamline by moving capacity into the cloud where it can be switched on or off as needed.

“This is very much a demand-side development,” says Kirchheimer. “A lot of telcos are offering near real-time network provisioning services with computing-as-a-service because that’s what their clients are asking them about.” With multinationals increasingly looking to have on-demand compute capacity, Kirchheimer believes that  we’re going to see a lot of Tier 1 telcos and data centre specialists linking up with Tier 2 providers to form “cloud partnerships” offering services to businesses with global requirements

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