Click here to close now.


Microservices Expo Authors: Elizabeth White, Yeshim Deniz, Mehdi Daoudi, Pat Romanski, Jason Bloomberg

Related Topics: @CloudExpo, Microservices Expo

@CloudExpo: Article

Cloud Computing: Opportunities for Communication Service Providers

Cloud computing offers CSPs a great opportunity to regain an important role in delivering services to consumers

Cloud Computing is an evolution of existing technologies to deliver services to end users. Communication service providers have an early adopter opportunity to compete with new entrants, increase their bottom line and play a dominant role in delivering cloud services.

Service providers have seen many so-called next- generation technology waves in the last 15 years. Cloud computing, which was seen as a new fad, has passed the initial test. Cloud computing is for real and not a vague idea anymore. It helps drive down costs for IT organizations by making infrastructure more distributed, more efficient and massively scalable. It's being accepted by enterprises of different sizes as a smarter way to deliver services. The worldwide cloud computing market is growing fast. According to IDC, it will be a $148.8B market by 2014, of which the public cloud alone would be about $55.5B. Communication service providers (CSPs) have made a significant investment in technology, people and processes. They have customer knowledge and relationships. Public cloud computing offers a unique opportunity to CSPs to defend their hosting business and grow significantly by focusing on a much larger market than what they can do today. This article focuses on some of the areas where CSPs have an advantage over others to take the lead market share in public cloud computing.

The Connected World
We live in a world where we expect everything to happen instantly and in real-time. It's a connected world, where people expect personalized information anytime, using any access device, delivered instantly. Everyone expects information to be processed in real time. The connected world is now moving to an agile world. The days of batch processing are numbered, if you want to meet the expectations of your users or customers. The computer and network infrastructure need to be ready to respond to this new connected or real-time world.

Communication service providers (CSPs) understand this better than any other industry. From the very early days of telephony, customers always expected a dial tone when they picked up the phone. CPSs know how to ensure a dial-tone each and every time. CSPs understand and appreciate what it takes to deliver information instantly anywhere every time. They are used to designing, implementing, running and managing infrastructure that is always on. Traditional voice services could be classified as cloud services.

Now it's beyond just the dial-tone. Today, the enterprise that can deliver instantly what a customer/user expects has a competitive advantage. It's important for businesses to make sure that applications, infrastructure and processes in the back end are able to meet this expectation. Businesses need to be agile to capture opportunities presented in this instant-on world.

Cloud Computing
To address these market pressures, CIOs are looking for simplified and flexible architecture. This is where cloud computing makes sense. According to the National Institute of Standards and Technology (NIST), cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort.

Today the focus is shifting to service and away from infrastructure components that are getting virtualized, standardized and commoditized. Virtualization utilizes resources better. But an architecture built on disparate components in a virtualized world adds more complexity. As a result, converged infrastructure, based on industry standards, is the foundation for agile service delivery with reduced time to provision additional resources. IT neither has the time nor the budget to integrate different components and own up to the risk of integration, resulting in increased time-to-market.

With virtualization, the application is not tied to the IT infrastructure, resulting in flexibility that's needed to meet the requirements of the real-time world. The service can be delivered from a data center or from the network or a combination of the two, as long as it makes business sense and can meet user's service-level expectations.

Cloud computing is a natural evolution due to the convergence of IT delivery and network.[1] With cloud computing, networking is part of the shared resources. It plays an important role in making everything work in an instant-on manner. It needs to be based on open industry standards, not proprietary protocols, more so now than ever, to provide the required agility and flexibility at reduced operational costs.

Opportunities for Service Providers
The telecom industry understands the value proposition, technical and operational transformation required as well as the opportunities that exist with cloud computing. CSPs have a lot of intelligence about their subscribers, their preferences, the services they consume, how and when they consume, etc., which help them add more value in a personalized service delivery. CSPs have billing and mediation platforms to charge customers based on usage. Combine all these with their brand and CSPs can play a dominant role and increase their top line revenue, if they proactively embrace public cloud computing.

Today, CSPs provide network connectivity to enterprise and SMB customers. Cloud service is a natural extension to what they are already providing:

  • Cloud computing makes a lot of business sense for the SMB market, which is expected to adopt it sooner than the enterprise market. SMB is a price-sensitive market and normally doesn't carry a lot of legacy application infrastructure. It's a market that is more likely to adapt to a standard cloud offering with little or no customization. On the contrary, enterprise customers would look for a more customized cloud offering. In a global study conducted by Forrester for HP, more than 65% of SMB customers expressed an interest in getting call center as well as unified communication services as cloud services from CSPs. [2] This opens up a great opportunity for CSPs to target that market segment and deliver packaged cloud services (Compute as a Service and Communication as a Service).
  • Market adoption of cloud services is best suited for CSPs. The study done by the IDC [3] shows that top cloud services accepted by the market are collaboration applications, web-based applications, information security and back-up or archiving services. These are the areas where CSPs have core strength and have been delivering them as standalone or dedicated services.

The computing resources and applications remained mostly in data centers. CSPs have focused primarily on managing and supporting networks connecting data centers. Typically, the computing resources are managed separately. If a customer looked for a single point of contact, CSPs, in most cases, worked as sub-contractors to large IT and SI companies.

  • In the world of cloud computing, this situation is changed to the advantage of CSPs because of the flexibility of putting compute resources either in the data center or network, wherever it made business sense. Cloud computing helps CSPs add more value by delivering more than just connectivity and network support. They can compete better with traditional IT service providers, thereby improving the top line.
  • CSPs are better positioned to provide web-based application services. Network assets are important assets of service providers that, in the world of cloud computing, can manage and deliver quality of service to users. This will not only allow service providers to differentiate themselves but will maximize the value of their investment in the network and create a new revenue stream.
  • As the network becomes an important part of the overall service, and when some computing resources reside outside data centers and in the network, traditional IT service providers and SI companies will work more closely with CSPs to commit SLAs to their customers. IT service providers will look for ways to jointly go-to- market with CSPs because they play a key role in delivering SLAs.
  • Events (natural disasters, sports events, elections, civil unrest, etc.) drive a burst of network and application traffic. It's cost-effective for organizations to handle such bursts of application usage or increased traffic to their sites using cloud computing. CSPs are in the best position to set it up very quickly for a short period of time and then tear it down.
  • Enterprise and SMB customers will also experience an occasional increase in their computing needs that can be easily met by CSPs with cloud computing with a pay-per-use model, which is more cost-effective compared to permanently investing in the infrastructure to meet occasional peaks. This reduces Capex as well as Opex for businesses.

According to Gartner, "By 2012, 20% of all business will own no IT assets." [4] As CSPs play a central role in delivering quality service to customers, they have an opportunity to be a services broker for customers. They can become the CIO of many businesses and deliver applications (services) from multiple sources.

  • CSPs can offer Infrastructure as a Service (IaaS) to defend their hosting customers. They can differentiate themselves from other providers by ensuring service quality and by bundling IT service with communication services. CSPs are less likely to win the battle in this area mainly on price. The next logical step for CSPs is to start offering Platform as a Service (PaaS). But they will be able to meet the required margin targets with Software as a Service (SaaS), bundling services and ensuring service levels.

  • Some service providers are considering building a repository for health care data (storage cloud) fed wirelessly from monitoring devices, labs and other sources. The health care cloud would give secure access to doctors, clinics, hospitals, insurance companies and pharmacists. This is just one example of an early adopter working with HP in Asia.

CSPs can be trusted providers of network connectivity to cloud services providers. As we move some computing resources from the data center to the network, the network becomes a gateway to store, retrieve, process and analyze information. This increases network traffic with cloud and drives more bandwidth.

  • With content delivery solutions (CDN), CSPs can speed up the delivery of Web and cloud applications to employees, partners and customers. Combined with policy solutions, CSPs can do it more intelligently, i.e., not speed up everything but understand the content and take into account user privileges and adjust the acceleration of traffic.

CSPs can aggregate different types of services and content and deliver them as and when requested through a self-service portal to customers with required level of quality and personalization on any access device. They can also let consumers store their content in the cloud and allow them to access it on any device.

The traditional hosting business growth for CSPs is tapering off. Cloud computing (IaaS and SaaS) not only offsets this decline but fuels the overall growth for CSPs.

CSPs will improve efficiency and reduce their internal IT costs by deploying cloud, thereby improving the top line. They will also realize a positive business case for internal cloud deployment when it's coupled with revenue-generating GTM programs.

Cloud computing offers CSPs a great opportunity to regain an important role in delivering services to consumers as well as SMB and enterprise customers. The questions remain: Who will take the early adopter advantage with cloud computing and who will try to be early followers?


  1. Mike Candsfield, F. (2010, June 16). Telecom's Central Role in Cloud Computing. Retrieved June 20, 2011, from Forrester.
  2. Forrester for HP. (n.d.). Communication as a Service for Midsize Businesses. Retrieved June 20, 2011, from
  3. IDC. (2009, September 29). Cloud Computing 2010, An IDC Update, IDC Executive Telebriefing. Retrieved June 20, 2011, from
  4. Gartner. (2010, Jan 13). Retrieved June 20, 2011, from Gartner Newsroom.

More Stories By Kapil Raval

Kapil Raval is an experienced technology solutions consultant with nearly 20 years of experience in the telecom industry. He thinks ‘the business’ and focuses on linking business challenges to technology solutions. He currently works for HP and drives strategic solutions in the telecom vertical.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.

@MicroservicesExpo Stories
Cloud computing is unquestionably one of the driving forces of DevOps, as the automation of operations transforms enterprise software development. DevOps, however, is more than a technology trend, as it represents a move toward silo-busting, self-organizing horizontal teams that drive business velocity. At the same time, enterprise Digital Transformation represents an upheaval across the enterprise, as customer preferences and behavior drive enterprise technology decisions. This transformation ...
SYS-CON Events announced today that Catchpoint, a global leader in monitoring, and testing the performance of online applications, has been named "Silver Sponsor" of DevOps Summit New York, which will take place on June 7-9, 2016 at the Javits Center in New York City. Catchpoint radically transforms the way businesses manage, monitor, and test the performance of online applications. Truly understand and improve user experience with clear visibility into complex, distributed online systems.Founde...
The annual holiday shopping season, which started on Thanksgiving weekend and runs through the end of December, is undoubtedly the most crucial time of the year for many eCommerce websites, with sales from this period having a dramatic effect on the year-end bottom line. Web performance – or, the overall speed and availability of a website or mobile site – is an issue year-round, but it takes on increased importance during the holidays. Ironically, it is at this time of year that networks and i...
Most of the IoT Gateway scenarios involve collecting data from machines/processing and pushing data upstream to cloud for further analytics. The gateway hardware varies from Raspberry Pi to Industrial PCs. The document states the process of allowing deploying polyglot data pipelining software with the clear notion of supporting immutability. In his session at @ThingsExpo, Shashank Jain, a development architect for SAP Labs, discussed the objective, which is to automate the IoT deployment proces...
Countless business models have spawned from the IaaS industry – resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his general session at 17th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, an IBM Company, broke down what we have to work with, discussed the benefits and pitfalls and how we can best use them ...
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true ...
It's been a busy time for tech's ongoing infatuation with containers. Amazon just announced EC2 Container Registry to simply container management. The new Azure container service taps into Microsoft's partnership with Docker and Mesosphere. You know when there's a standard for containers on the table there's money on the table, too. Everyone is talking containers because they reduce a ton of development-related challenges and make it much easier to move across production and testing environm...
DevOps is an organizational and cultural rethink of how software-driven organizations can become organizations at velocity – agile enough to innovate and fast enough to deal with any change that comes their way. Information technology is a central enabler of DevOps, but today’s better-faster-cheaper technology is not the whole story, as tools are only as good as the people wielding them. The more fundamental story here is the organizational and cultural transformation necessary to take full adv...
ThoughtWorks has issued the latest Technology Radar, an assessment of trends significantly impacting software development and business strategy. The Technology Radar sets out the current changes in software development - things in motion to pay attention to based upon ThoughtWorks' day-to-day work and experience solving their clients' toughest challenges. "With the threat landscape still evolving, our latest edition of Technology Radar continues to focus on security and innovative approaches,...
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound...
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & E-Discovery of your data - whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise.
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, San...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNu...
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
You may have heard about the pets vs. cattle discussion – a reference to the way application servers are deployed in the cloud native world. If an application server goes down it can simply be dropped from the mix and a new server added in its place. The practice so far has mostly been applied to application deployments. Management software on the other hand is treated in a very special manner. Dedicated resources are set aside to run the management software components and several alerting syst...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Naturally, new and exciting technologies and trends like software defined networking, the Internet of Things and the cloud tend to get the lion’s share of attention these days, including when it comes to security. However, it’s important to never forget that at the center of it all is still the enterprise network. And as evidenced by the ever-expanding landslide of data breaches that could have been prevented or at least their impact lessened by better practicing network security basics, it’s ...
Put the word continuous in front of many things and we help define DevOps: continuous delivery, continuous testing, continuous assessment, and there is more. The next BriefingsDirect DevOps thought leadership discussion explores the concept of continuous processes around the development and deployment of applications and systems. Put the word continuous in front of many things and we help define DevOps: continuous delivery, continuous testing, continuous assessment, and there is more.