Regional Telcos as a Cloud Service Provider

Regional telecom companies are well positioned to bring cloud services to the region, if they can overcome key challenges, says Said Irfan of IDC

Tags: BandwidthCloud computingIDC Middle East and Africa
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Regional Telcos as a Cloud Service Provider There are challenges to cloud in the region, but operators are positioned to address them, says Irfan.
By  Said Irfan Published  June 24, 2010

Awareness of the cloud-computing concept - which offers better flexibility in planning for server capacity, more cost effective use of infrastructure resources, and higher utilization of bandwidth - is rapidly growing. As such, telecoms operators have started positioning themselves to capture this market opportunity as they seek to prevent domination by global and regional IT players.

The Middle East's telecoms operators are well positioned to benefit from the cloud computing revolution, as several hosting companies that are affiliated with them have been busy expanding their data centre infrastructure over recent years, becoming central to the carriers' strategy of creating growth platforms beyond the letter 'C' in the ICT industry. As network exchange owners, operators also benefit from better use of their bandwidth through server virtualization, enabling the improved assignment of capacity based on usage, which also suits clients' needs. Indeed, several operators have already moved further by establishing partnerships with software providers to furnish the applications delivered through the cloud, with key examples being separate deals agreed by Etisalat and du with Cordys in 2009, covering certain business process applications.

Such moves are also very likely to lead to increased local and international partnership and merger and acquisition (M&A) activities, as telcos look to create a new market value chain. The leading IT suppliers, including HP, IBM, and Microsoft, are in search of large and dependable channel partners that have reach into the midmarket and below. As the telcos build out their cloud services platforms, it is certain that we will see some very big ‘cloud' partnership deals announced between these IT giants and service providers during 2010.

Nonetheless, there are still hurdles that need to be overcome in convincing potential clients to move to a regional operator's cloud service as opposed to going to a global provider.

First, clients need to be convinced that their applications and data are kept secure and robust. Further, following several instances of cables being cut in the region over the past few years, efforts need to be made to build confidence in operators' redundancy and disaster recovery plans for their datacenters. Finally, the region's operators charge bandwidth at decidedly more expensive rates than what is provided internationally.

A few developments that operators could tout as measures to address these issues are as follows:

• The completion and operational launch of the IMEWE, EIG, and MENA cable systems in 2010 will provide better cable diversity. This will minimize the risk of traffic discontinuity should any cables connecting the region be damaged, and it will provide the added capacity necessary for justifying lower charges.

• Several operators have already taken measures to ensure redundancy by establishing access to data centres scattered across the region, either through subsidiary companies - as is the case with Etisalat's relationship with Mobily in Saudi Arabia - or by direct ownership, through establishing data centres in other countries outside of its home base as a few operators are considering doing.

2493 days ago

Yes justin i really agree with yours views and yes most of the companies cannot even access reliable internet services.

3265 days ago
Tech Info

Most companies cannot even access reliable internet services to date, let alone afford them. Telcos do not want to provide customers with SLAs either, or charge extortionate rates for such services. Tech Info ********* justin

3268 days ago
Chris Thomas

Have you guys no brains? Windows 8 is going to be a cloud OS as per the report that is on my desk Most security software companies like Norton and Avast are working to make their softwares cloud based. Google is going to release a cloud Desktop OS Most software is going the cloud route All this requires a heavy bandwidth at reasonable rates I think the ISP's in Middle East need to slash their rates and increase their speed by more than 100 % if the government want their people to use a computer with Windows 8. Actually, for people like you and me it doesn't matter even if the broadband is costly but it affects the average consumers.

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