One word – security – was a key element in cloud providers like AWS, Microsoft and IBM gaining a huge competitive advantage over Tier 1 telcos like Verizon, AT&T and CenturyLink, an analysis of the cloud services market suggested.
According to an Investor’s Business Daily article, the major telcos not only under-invested in data centers and other cloud infrastructure, but they failed to keep abreast of developments in the public cloud, particularly around security of data.
While Verizon and AT&T packaged their cloud services with virtual private networking and related services, a combination that allowed them to tout the inherent security of these types of services, providers like Amazon Web Services and Microsoft worked to increase businesses’ confidence in moving data to the public cloud.
"I think the telcos were caught by surprise as security in the public cloud dramatically improved," said Forrester Research analyst Dave Bartoletti in the IBD article.
It’s no secret that competition within the data center market also impacted the big U.S. telcos, as providers like Equinix, which provides both data centers and colocation, have moved into the fertile segment. Verizon and CenturyLink have put up for sale the data center providers – Terremark and Savvis, respectively – they acquired in the heyday of cloud service expansion.
Meanwhile, even as the Tier 1s appear to struggle, other established technology companies are continuing to make inroads in the cloud market. Case in point is IBM with its multi-billion dollar cloud play, which included the acquisition of Softlayer and building data centers – Big Blue has moved into contention with Google, Microsoft Azure and AWS in the past couple of years.
Both CenturyLink and Verizon are planning to either finalize a sale of data center assets, or make a firm decision about them, in the second half of 2016.
- see this IBD article