Cloud challenge

Cloud computing holds enormous potential for telecom operators, but how can they profit from the nascent industry?

Tags: BT GroupCloud computingOrange group (www.orange.com)
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Cloud challenge Steve Masters sees huge potential for cloud computing in MEA.
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By  Roger Field , Nithyasree Trivikram Published  January 10, 2011

Cloud computing has generated more than its share of hype in the past year. But despite this, it is clear that telecom operators stand to benefit from the industry, which is tipped to be worth some $149 billion by 2014.

CommsMEA spoke to Steve Masters, head of convergence at BT Group, and Rudolf Sarah, regional cloud director, EMEA, Orange, about the challenges and potential of the nascent industry.

CommsMEA: What are the current trends in cloud computing?

Steve Masters: There is too much hype about cloud computing, and very little amount of real delivery happening in the market. There are areas that are in need of cloud computing solutions as a quick fix today, but the tangible solutions for them are quite limited. In cloud computing, there are certain benchmarks in the industry. For example, salesforce.com is a classic benchmark for the applications delivered as a cloud service. I think all of the independent software vendors (ISVs) are looking at offering their services from the cloud.

Rudolf Sarah: I started on cloud in 2009 in Europe. I have seen the development in Europe, and I have also watched it in the US. It tends to follow a similar path across every market. Cloud starts with a buzz in the market, so you reach a critical mass of advertising and buzz words tossed around by systems integrators, software vendors and wholesalers talking about cloud, and it generates attention from customers. The Middle East was at that point about six months ago.

During the crisis everything got frozen. This is a key part of what happened in the Middle East, especially the GCC area. The companies were in survival mode. They were cost-cutting, not investing. As the crisis came to an end, these companies suddenly started to hear about software as a service and cloud computing, which had been grabbing attention in the US, Europe and parts of Asia.

CommsMEA: What are the challenges faced by telcos in cloud?

Steve Masters: Most organisations will see cloud as a blend of being hosted as well as a site-based service for the next three to five years. The initial barrier for telcos will be that there is going to be a lot of hype in the market, and secondly, the challenge will be delivering the cloud services in terms of quality of the infrastructure.

At BT, we position the cloud as a hosted service, while we also have the site based service. Our proposal to the customer is that we are not going to be perceptive about site or cloud based services as we strongly believe that different organisations will have different requirements for reach.

All of the independent software vendors (ISVs) that are talking about cloud talk about delivering it in a ‘dirty’ environment, or what I call the Internet. They never actually consider the fact that most large organisations have got the quality of service. Here, the ISVs should be looking into connecting their software as a service (SaaS) offerings or cloud offerings with a telco partner like us, which will allow us to deliver it on a clean infrastructure, guaranteeing the performance rather than leaving it to the performance of the internet.

To educate people on this subject, we have a partnership with Oracle. Oracle in the UK and MEA has recognised that very fact and connected into our infrastructure, hosting their services for certain elements of their software, so that we can deliver it over the environment.

Unfortunately, what might happen is that customers will start to consume cloud applications from ISVs and the performance will not be maintained. Hence, there is the need to reverse engineer quality of service into that environment to guarantee performance.

Rudolf Sarah: Companies in this region faced the same issues that we have seen across all markets, which is ‘how can I trust my partner?’ This is business critical data for companies – we are talking CRM, HR management, financial applications. Suddenly, they have the idea that all of their core data, which really is the transactional value of a company, being sent outside to something that is called ‘the cloud’, that happens to be in data centres spread around the globe, and they are asking this simple question – how can I trust anybody with my data, what is going to happen to it and how do I get it back.

CommsMEA: Do you think companies in the MEA region will trust third parties with their information?

Rudolf Sarah: When you engage in that conversation, you realise you have to trust people in order to use IT. Even if it is internal people in your company, you have to trust them with your data. The fact is you are just pushing the trust to another provider that happens to be a third party provider. Trust has been the same in all managed services and if you look across the industries and you look at all the industries that have transformed themselves, you always come back to that question – who am I going to trust?

When you take water out of your tap at home, you don’t think about how you can trust the water provider, you trust him because of the long-standing relationship. They commit to some service level agreements and legal regulations and the trust just happens over time.

CommsMEA: Which services currently play a major role in the cloud computing space?

Steve Masters: Infrastructure as a Service (IaaS) always has to come first as we need the infrastructure to be in place. Software as a Service (SaaS) comes next because typically it is the business application which is the core.

Let’s say, you are expanding into Dubai into a completely new organisation. The first thing you need is the infrastructure. You can deliver it on the Internet, but you would want to guarantee the level of service you are giving to the organisation. The next thing will be business or communications service depending on the type of organisation. In fact, from our perspective, both are equally important as you need to have the business applications as well as the communications applications.

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