Next round of cloud battles to make all others look like a skirmish

Posted by Mike Vizard on May 12, 2016 9:56:25 AM

cloud_battles.jpgWhen public cloud computing first started to gain momentum, a wave of players jumped into the fray that arguably fell into two camps. On the one side there were IT infrastructure players such as Amazon Web Services, Microsoft, and Google. On the other side there were the carriers lead by Verizon and AT&T. Fast forward to today, and it’s clear that in terms of dominating the public cloud the infrastructure camp has pretty much thrashed the carriers.

As a result, the carriers these days are putting more emphasis on connecting private clouds to public ones using their networks. Carriers have also been more successful leveraging their traditional hosting capabilities to be a force to be reckoned with. Case in point is Desutsche Telecom, which a new report from Technology Business Research (TBR) identified as the top cloud carrier provider, followed by NTT Communications.

In every case the report notes that carriers have backed off the public cloud to focus on more lucrative opportunities. The issue that many of them will have to confront, though, is how long they can continue to do so without once again having to confront the collective might of public cloud service providers. After all, public cloud service providers are also providing private cloud services, and shifts in how networking services are being delivered play to their strengths.

The changing networking landscape

Instead of constructing networks made up of a wide array of appliances, the future of networking is being defined by x86 and commercial-grade processors. On top of these platforms, network function virtualization (NFV) software will be deployed that will replace the need for all those physical appliances. In that scenario, all any cloud service provider needs to provide network services is access to a dumb pipe. In fact, having already recognized this Google has been investing billions in building out Google Fiber to lessen its dependency on carriers. It’s only a matter of time before AWS and Microsoft follow suit with a similar approach to networking.

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None of this is lost on carriers that are furiously working on retooling their networks using open source software running on top of commodity infrastructure. As part of that process, the worlds of compute, storage, and networking are converging, so it’s also only a matter of time before the economics of IT infrastructure, referred to as 5G networking in telecommunications circles, change to the point where carriers can cost effectively deliver public cloud computing services.

In fact, as time goes on, the line between what a cloud service provider and a carrier are will blur to the point of being indistinguishable.

A fight to the end

It’s far too early to say who will ultimately win these cloud battles, though. Cloud service providers are generally much more agile than carriers, which is one reason why TBR says carriers will find competing in the cloud more difficult in the years ahead. But faced with other threats in the past, carriers have proven themselves to be remarkably resist.

If it wasn’t for the fact that the three largest cloud service providers are units of much larger companies, the carriers would probably be tempted to buy one of them. In the meantime, the carriers will just have to bide their time waiting for advances in IT infrastructure to mature to the point where they can compete on more even footing with the likes of AWS, Microsoft, and Google for both public and private cloud computing business.

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Photo Credit: The U.S. Armyvia Used under CC 2.0 License

Topics: Cloud Trends

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