Capacity Europe 2011: How to Position Your Cloud Offering

Jim Poole

By Jim Poole

Three top-level executives in the carrier industry entered the fray at Capacity Europe 2011 to debate the role of carriers in cloud computing. When the two Welshmen and one Frenchman had got over their initial glee at having a panel free of Englishmen (rugby puns galore), the discussion fell back on topic.

Each panelist shared their plans to put their businesses at the forefront of the emerging cloud market. The members of the panel were:

  • Francois Eloy, Executive Vice President, COLT Technology Services
  • Gareth Williams, CEO, Interoute
  • Carl Roberts, Group Vice President, Verizon Global Wholesale
  • The panel moderator, Atlantic-ACMs CEO Judy Reed Smith, set the stage with some facts and figures that led to her saying, “We like to think that the 2012-2015 era will be the take-off point.” This was a scenario that all three execs on the panel agreed with, having seen the trends confirmed in their own sales and customer data.So cloud is taking off, how will these carriers take their slice of the market?

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    The views are interesting in part because of the different scale of the companies involved. From Verizon, a global multi-industry player to the much smaller European-focused Interoute, with Colt lying somewhere between the two.

    The three panelists were unanimous in suggesting Cloud presents an unparalleled opportunity to deliver added value services and in doing so break the trend of delivering more traffic for less revenue that is such a concern for the industry.

    Eloy felt that a carrier – with the market in its current state – was comparable to a utility company, providing reliable access to a commodity with little margin. He believes that cloud computing can change this as customers demand computing resources or network capacity for short fixed terms to manage a particular project or cope with heavy demand. Ultimately this would mean that the networks that can offer the most flexibility and profit the most from it will dominate.

    Roberts took a different view by suggesting that for Colt, the ability to offer security was a fundamental part of securing cloud customers – to the extent that he described Colt’s purchase of security firm Cybertrust as “possibly the best acquisition we’ve ever made.”

    Williams was keen to ditch the hype in explaining Interoute’s approach to cloud, saying he felt the term was in danger of “meaning almost nothing” as so many different parties try to put their spin on the latest hot IT trend. Good then, that his explanation was uncluttered and to the point: “We have always defined cloud as virtualized services – from voice to video, and now it’s coming into computing. We offer services from infrastructure right up to virtualization, that’s it, that’s our story.”

    Interoute win around 55% of their business in the pan-european enterprise space, and Williams believes that in serving this market, trust is crucial: “Everything is going to be on the basis of trust – our goal is to build an environment for customers starting by virtualising their network, moving in to virtualising their voice, their video. Probably the last asset you get hold of is their computing.”

    It’s well known that one of the key barriers to cloud adoption is security, as Colt’s own survey (amongst many similar surveys) suggests. So no surprise really that security and trust are mentioned by carriers looking to position their cloud services. Still two different approaches, one through acquiring big names in security, the other through building trust with enterprises incrementally. Mr. Eloy would also no doubt not hesitate to underline the security credentials of his company’s own offering, but interesting that his first thought was on delivering unrivalled levels of flexibility through cloud.

    The three panelists are in essence a microcosm of an industry showing very promising signs of differentiation and positioning with regards to cloud – good barometers of a healthy marketplace emerging. It’s widely accepted that cloud is going to take off and soon: the carrier industry is certainly making a compelling case that it is well positioned to dominate this hugely promising market.