Telstra re-ups with cloud 'broker' Jamcracker

Australian telco Telstra this week said it has renewed its contract with cloud services brokerage enablement company Jamcracker. Telstra “white labels” T-Suite, Jamcracker’s Services Delivery Network (JSDN), to manage its online apps marketplace.

According to research house Gartner, the cloud services brokerage market will be worth in excess of $100 billion by 2015 and 40 percent of cloud services will be delivered through brokers, or aggregators. The logic behind cloud brokers is compelling. By offering a common portal, companies such as Jamcracker can provide a single point of entry for the array of disparate cloud services that companies will deploy across the enterprise. This means a single sign-on for users; it means that regulatory issues – data location and access – are easier to manage; and it means that administration, billing, security and policy enforcement and management is managed from one place.

Telstra, according to vice president of marketing and business development at Jamcracker, Steve Crawford, was an early adopter of the concept. “They implemented the solution before the term service brokerage had even been adopted.” The reason that the contract was extended was simply that it was a huge success, according to Kate Mackenzie, Telstra’s CMO, with annualized cloud sales from the marketplace growing more than threefold.

Currently Telstra offers a couple of dozen products and services from its wholesale catalog, including big brand names such as Microsoft 365, which drives the campaign to attract small medium businesses (SMBs).

The trick, according to Crawford, revolves around a new take on established wisdom: bundle services and customers will be more loyal. Bundles in the cloud work the same way and Telstra’s research suggests that broadband customers who buy cloud services this way are 65% more likely to renew their contract. The company is also seeing a great uptake in cross-selling opportunities within its marketplace.

Crawford is amused by the fact that the perception has always been that telcos are not good at offering value added services. “This is proof that they are and that it works,” he says. People who work for companies are customers in their own right and this offering is causing 20% of non customers to churn to Telstra on the back of the experience. Essentially, the portal means that users can access a range of services, without IT being the ‘key holder’.”

Crawford says that Jamcracker was early enough into the market, starting life as an application service provider, that they are able to advise telco customers on ‘go to market’ strategies. “Don’t aim too high, too early,” Crawford advises, “provide, say, a business starter kit, with email, hosting and security. Don’t try and jump from there to offering salesforce.com the following week. Customers need to build trust and familiarity slowly. It is also important to understand that offering cloud services is not the same as hosting third party applications. The first step in many cases is for them to apply this model to old thinking and then use the momentum it creates to transform the business model.”

This is an evolving technology, says Crawford and as Rich Nespola, chairman and CEO of TMNG, recently pointed out “frankly, when it comes to the cloud the rules have not been written yet.” (CP: How much does it really cost to run a telco cloud? - http://connectedplanetonline.com/bss_oss/news/how-much-does-it-really-cost-to-run-a-telco-cloud-1017/).

Asked to comment on the state of the cloud generally and particularly where the weaknesses lie at the moment, Crawford believes that the flaws are only perceived ones. The reality is that the cloud experts are almost certainly better at managing security and regulatory issues than small companies. “Like any new technology, this perception will change and customers will come to trust cloud providers. After all, companies and customers alike think nothing of taking money from under their own beds and getting a bank to keep it safe under theirs. That took time, too.”