From hype to here

While cloud computing has existed for a number of years, the concepts and workings it espouses have become increasingly popular recently, leading to some misunderstanding of what is encompassed under the term. Its definition remains quite wide, though service providers and enterprises have started to make concrete steps towards utilising its core components

Cloud computing refers to the delivery of computer services over the Internet as an alternative to running software on a company’s own computers or network. One of its most articulated advantages is the transfer of CAPEX in networking investment to a variable OPEX-based solution in which enterprises typically only pay for what they need.

Emerging markets such as the Middle East offer significant potential for the uptake of cloud computing solutions given the relatively low amount of legacy infrastructure that exists, which makes the transition to centralised computing processes somewhat more straight forward.

“Unified communications is a techy thing, and quite difficult to get right,” says Steve Masters, general manager IP Infrastructure, Major Businesses, BT Global Services. “Enterprises are bogged down in legacy in many places, and this is not so in emerging markets, so there is great potential that exists there,” he adds.

The ‘pay as you go’ characteristic of cloud computing solutions permits service-based charging that allows enterprises and service providers to regulate their IT and networking spend. Cloud computing also often offers a quicker time to market as solutions can be developed centrally and then disseminated across networks and uploaded to individual terminals or computer systems.

“Cloud is a buzzword,” Masters comments. “BT has been offering cloud-type services for years. Our voice VPN for example, is one of our core offerings and has been in existence for 10 years.”

At the end of 2009, BT announced a collaborative effort with long-time partner Cisco Systems, unveiling a global hosted IP telephony service that allows businesses to bring converged voice, mobile and data services to every desktop in their organisation, using BT and Cisco’s cloud computing-based technologies.

The technology utilised is Cisco’s Hosted Unified Communications Services (HUCS) platform, and together with BT, cloud as well as on-site offerings are made available to customers.

“We try not to be prescriptive around the issue of cloud,” Masters says. “HUCS is a joint product, so both companies have to be successful and there has to be a large measure of flexibility when it comes to implementations.”

While the agility and variability of cloud has won many supporters, concerns have been raised over security in cloud computing environments, particularly with respect to compliance and regulatory matters. Regulatory and security authorities in the UAE, Saudi Arabia, India and Thailand, for example, have recently questioned Research In Motion’s off-shoring of servers and data centres utilised to transfer messages and other information between its hugely popular BlackBerry devices, and such concerns are likely to persist.

“It is right to be concerned about cloud fraud issues,” Masters confirms. “Some things won’t be easily overcome, but there are measures in place to combat security threats and ensure good governance.”

According to research house Ovum, increasing demand for cloud-based services is also driving a boom in the wholesale telecom market.

In a report, Ovum claims that wholesale telecom providers are set to benefit from growing consumer and business demand for cloud-based services, provided by a new breed of enterprise.

BT’s Steve Masters believes it is right to be concerned about cloud fraud issues though there are measures in place to combat security threats and ensure good governance

“A growing number of companies that serve businesses and consumers feed the demand for the cloud. They purchase telecom services on the scale of small-to-medium carriers from wholesale telecom carriers,” commented Paris Burstyn, report author and Ovum analyst.

“This means wholesalers are poised to experience a boom because as these intermediary companies experience increasing demand for their products and services, wholesale telecom suppliers have the opportunity to grow with them.”

Burstyn identifies that there are also new intermediary companies constantly emerging, such that as businesses and consumers demand a wider range of cloud services and become more reliant on them, new companies emerge to meet their needs.

According to Ericsson, there are two main reasons why network service providers should consider becoming engaged in cloud computing. The first is to reap the benefits of cloud computing for IT optimisation (lower costs, and more elasticity and speed). The second is to exploit new business opportunities.

As virtualisation and data-centre technologies and characteristics mature, some telecom applications will move into the cloud environment. Others will be delivered as Software as a Service (SaaS). This will provide the benefits of cloud technologies to operators. It will also improve vendors’ managed services offerings, which actually provide benefits that are similar to clouds to operators that do not want to invest in or run their own cloud solutions.

Ericsson goes further to state network service providers are well positioned to address many of the concerns that relate to cloud computing. Given the control they exercise over access transport networks, they can provide secure quality-of-service (QoS) connectivity to and from the data centres. Moreover, their customer-connectivity offerings can be very flexible (elastic) in terms of bandwidth.

Network service provider brands are more strongly connected with trust and security than most Internet brands. As opposed to large parts of the global Internet industry, the nature of the communication industry, with its locally regulated markets, has given rise to a strong local presence, providing a good foundation for addressing enterprises and consumers.