Keeping Cloud moving

It’s been a year for serious cloud investments and networking specialist Cisco has closed out 2012 with a $1.2bn outlay on privately held cloud management company Meraki.

James Middleton

December 19, 2012

4 Min Read
Keeping Cloud moving

It’s been a year for serious cloud investments and networking specialist Cisco has closed out 2012 with a $1.2bn outlay on privately held cloud management company Meraki.

Having missed the 3G boat, Cisco is attempting to make an impression in the telco space by using its IP expertise to cash in on the migration to endto- end IP architecture brought in with LTE. At the same time, however, specialist telecom equipment providers are developing their own ‘Cisco killer’ switching infrastructure.

The acquisition of Meraki complements Cisco’s offerings with software that enables enterprises to centrally manage their network infrastructure from the cloud. Meraki’s technology offers wifi, switching, security and mobile device management that can be centrally directed, supporting BYOD, guest networking, application control, WAN optimisation, application firewall and advanced networking services.

The enterprise market represents a sizeable opportunity for many players in the ecosystem, with Orange recently agreeing to use CDN service provider Akamai’s Aura Network Solutions to address the growing needs of the enterprise sector for improved content delivery.

Orange Business Services, the operator’s enterprise division, will market its offerings initially in France and will address the exponential increase in web-based traffic, in particular HD video and e-commerce services.

Over in the UK meanwhile, citing its previous infrastructure as being expensive to run and time consuming to maintain, Orange Digital has moved its operations to Amazon’s cloud, where it is better able to support spikes in traffic and capacity and reduce costs by £2m over a three-year period.

Through mergers and acquisitions, Orange Digital, which manages the online portals for Everything Everywhere, inherited a legacy physical infrastructure that was no longer adequate to meet the needs of the company and its clients. Moreover, the firm’s traffic profile is variable in nature, which resulted in an oversized infrastructure 90 per cent of the time. “Our infrastructure was expensive to run and time consuming to maintain,” said Neil Jennings, lead enterprise architect, at Orange Digital.

“In addition, we had many EE micro sites and applications that needed rapid and temporary hosting. We were also in a period of expansion, and with traffic on our Orange and mobile home pages climbing to four billion requests monthly, we became limited by our fixed infrastructure.” To scale up a physical infrastructure would present a massive upfront cost and a long time to market for deployment, he added, so the firm sought alternative solutions.

The software architecture team at the firm therefore looked at alternatives to their existing infrastructure, including evaluating cloud service providers like Amazon Web Services. Rival operation, Telefónica Digital, a long time proponent of cloud services for internal and external usage, is also bolstering its global public cloud service with a toolkit that offers users greater control and provisioning of virtual servers.

These ‘Instant Servers’ allow customers to configure the size of their virtual server in terms of RAM memory, CPU and hard drive as well as choose the Operating System (SmartOS, Ubuntu, CentOS, Windows Server, Fedora and Debian) the virtual server runs on, from a single interface. All the hardware resides in Telefónica’s enterprise-grade data centres and is connected to the carrier’s fibre optic network, coupled with an SLA of 99.996 per cent per year and a turbo-charge boost of computing power by up to 400 per cent in real time to handle spikes in demand.

The company is hoping to target thousands of businesses that require a cloud services platform that is easily scalable, with low latency and totally trustworthy—common promises in the cloud services space.

In fact, Informa Telecoms & Media recently warned that the biggest problem with cloud offerings at present is a lack of differentiation.

Camille Mendler, principal analyst and head of enterprise verticals at Informa Telecoms & Media, called for new segmentation methods among operators customer bases in order to give them the tools to capitalise on contextual opportunities. Mendler believes there is a significant opportunity for players to sell cloud services in the ‘long tail’, the blue collar market and micro-businesses.

“Small is beautiful. Looking at the small enterprise opportunity is where much value will be found,” she said. But to date, Mendler claims carriers have focused on a very linear model, based on how many connections they can sell into a single group or customer on a ‘one size fits all’ basis.

“So far it’s a counting game,” said Mendler. “But the marketplace is more crowded in a digital world and everybody is changing business model. So a plain vanilla offering for enterprises of all sizes is not good enough.” In both emerging and developed economies, micro and small businesses are the biggest denominator. These users may not be in an office, because their office is their mobile device, and so they need to be targeted with specific services for those on the move.

Most cloud-based as-a-service offerings are targeted at white collar workers in an office environment, but tailored solutions for smaller businesses can generate good revenues, even if they form part of the “informal” economy. “The informal economy has such a huge impact, especially in emerging markets. They might not be paying taxes to the government but they may still buy services from you,” Mendler said.

Read more about:


About the Author(s)

James Middleton

James Middleton is managing editor of | Follow him @telecomsjames

Get the latest news straight to your inbox.
Register for the newsletter here.

You May Also Like