Geminare Blog

Thursday, Feb 03, 2011

Today’s Forecast for the Telecom Sector: Clouds, Clouds and More Clouds

 


In August, 2010, I blogged about Qwest’s entry into the Cloud being a signal that the Telecom sector was mobilizing, and that as they did, the Cloud would migrate from a computing option, into a mainstream technology and a driving business force.  Well, here we are in the first few days of February 2011 – the equivalent of about 5 Cloud years later (remember Internet years?), and the telco's have not only mobilized, they are armed and ready to attack the Cloud market from every corner of the planet.

 

And there is ample evidence of this from announcements made just in the last few days. 

 

  • Verizon Communications, the second-largest telecom operator in the US, disclosed plans to acquire IT infrastructure and cloud services provider Terremark, for $1.4 billion in cash.  The proposed acquisition of Terremarkis the largest purchase by Verizon since it acquired MCI in 2005 for $6.8 billion, and that alone is a pretty telling statement.  Companies don’t toss around this kind of coin unless they’re serious about grabbing a piece of a market that they know is critical to their overall strategic direction. 

 

  • Time Warner Cableannounced that it has acquired Navisite, a provider of enterprise-class hosting, managed application, messaging and you guessed it – Cloud  Services.  The $230 million acquisition brings an additional 10 data centers into the Time Warner family but most importantly “provides us [Time Warner] with a successful managed services business and a new, innovative managed cloud platform representing significant growth opportunities .. for small and medium sized business.” said Time Warner Cable Chairman and CEO Glenn Britt.

 

  • In Canada, a strong and significant build-out of pure Cloud-based programs and portfolios was announced today as MTS Allstream, Canada’s largest All-business Carrier staked its claim in the market with the launch of a Cloud Data Protection Portfolio including Cloud Replication Services, a fully-managed business continuity solution that aligns perfectly with the mid-market that the company serves.

 

And that’s just the news that’s public.  The really big stuff hasn’t even fully bubbled to the surface; but it will and soon.

 

Further reinforcement of this cloud-centric view came last week in the form of a conversation I had with a senior executive at a big-name global company that has a presence in every major market.  My contact owns the telecom sector worldwide, and had just returned from a two-week trip to Asia where he’d met with senior telecom leaders in Korea, Japan and China.  What was on their minds?  The Cloud.  And what was on my contact’s mind?  How his company can layer Cloud Services – especially business continuity (the #1 priority identified by the telco leaders) – onto its current offerings to enrich its telecom services suite.

 

We discussed what’s developing within the telecom sector in other parts of the world, and to quote my prospective business partner, “Every telco that I handle is either at the cloud architectural planning or proof-of-concept stage.” A very strong statement.


It is common knowledge that Telco’s tend to take a “wait and see” approach to technology, only moving when there is clear market acceptance and the ability to utilize their mass customer base.  With the amount of substantial activity occurring over the last year and clearly on the horizon for the upcoming year, its easy to make the statement that the telecom sector is red hot right now when it comes to the Cloud, and I fully expect it to stay that way in the immediate future.  

 

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