Taking aim at the cloud services opportunity

Sean Buckley, FierceTelecomAs enterprises and SMBs alike look for ways to offload their nonessential functions like email and storage by having a service provider host and manage them in their respective data centers, cloud services have been gaining a considerable amount of attention.

With this as the backdrop, service providers of all sizes and their IT partners have, not surprisingly, been eager to cash in on the growing cloud services market. 

While the idea of the cloud and cloud services may differ, there are three main service offerings:

  • Infrastructure as a service (IaaS): Service providers will deliver computer infrastructure such as platform virtualization environment as a service.
  • Platform as a service (PaaS): Driven by Web-based companies like Google with their App Engine, PaaS is the delivery of a computing platform and solution stack as a service.
  • Software as a service (SaaS): Pioneered by application-based provider like Salesforce.com, SaaS will license an application to customers for use as a service on demand.
ebook Cashing in on Cloud Services

FierceTelecom's new eBook, Cashing In On the Cloud Services Opportunity, explores the challenges providers face in this growing segment.

Each of these service elements can then be delivered to the enterprise in four basic forms: a shared community, public cloud, private cloud or a hybrid model that combines the best of both the public/private model.

Since most, if not all businesses, aren't going to hand over everything to the cloud right away, many industry pundits believe that the more likely scenario will, over time, be a hybrid one.

In response to the growing desire by their customers for cloud services, service providers have been cashing in on the cloud service arena through their own internal product development cycles, IT infrastructure partnerships and, of course, targeted acquisitions.

On the cloud services acquisition front, the acquisition drive has been lead by both Tier 1 U.S.-based ILECs like CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ) and Tier 2 carriers including Windstream (Nasdaq: WIN) and TDS Telecom (NYSE: TDS). These service providers have arguably been the most active in acquiring others to bolster their cloud portfolio.

Verizon fired the first big shot in the cloud acquisition race with a $1.4 billion deal for Terremark. Not long after Verizon, CenturyLink--having barely completed its acquisition of Qwest--is now in the process of acquiring Savvis Communications, which will become a wholly-owned subsidiary of the ILEC.

Tier 2 ILECs, namely Windstream and TDS Telecom, have been no less aggressive in bolstering their cloud and data center portfolios via acquisitions. Windstream bought Hosted Solutions, while TDS purchased VISI, TEAM and most recently OneNeck IT Services.

But no matter how big the service provider's offerings are, the adoption and drive of cloud services is going to take ongoing education to understand what the best solution for each of their respective customers.  

In FierceTelecom's new eBook, Cashing in on the Cloud Services Opportunity, we explore the trends, benefits and challenges service providers face in building a profitable cloud service business.--Sean

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