How telcos could conquer the cloud

Telecommunications providers could play an important and lucrative role in the burgeoning world of cloud computing by combining their natural advantages as network operators with a new wave of technological innovation. But as they are already behind in this race, they'll need to move much faster than their current approach to technology evolution allows.

The opportunity represented by cloud-based services (essentially network-based platforms provided as a service from a data center, though looser definitions include hosted offerings and software as a service) is potentially immense because, for starters, it increases the value of carrier networks in multiple ways and creates new roles (and revenues) for telecom service providers. At minimum, clouds will greatly increase network traffic and utilization and thus transport revenues. And in physically delivering cloud-based services, telecom carriers have an opportunity to extract two revenue streams from the same function, charging end users for a given level of service quality and, at the other end, charging cloud-based providers for service quality, too – an arrangement similar to that often discussed in the context of content delivery networks.

However, telcos could do much more than that thanks to some inherent advantages, according to Tom Nolle, president of CIMI, a consultancy. Their IP infrastructure could lend itself well to cloud services, at least compared to enterprise infrastructure. The highly componentized nature of telco operations software for the better part of the last decade gels well with cloud services because each software component can be treated like a hosted application, which yields parallels in processing and performance, he said. Meanwhile, emerging telco technologies such as IP multimedia subsystems (IMS) and next-generation networks (NGN) service architectures are developing into logical service components that could also fit comfortably in cloud environments.

"A service provider using cloud computing could build a supply-side architecture that matched up with the current application and service-logic trends emerging independently," Nolle said. "It's like a combination of two perfect storms."

However, to play a bigger role in the cloud, telecom service providers will need better technology than the stuff they settle for today.

The problem with equipment vendors

Router oligarchs Cisco Systems and Juniper Networks both made big splashes this year by announcing plans for data center evolution that would help usher in the cloud services era. Juniper -- having previously offloaded its router's control planes to discrete servers and, more recently, added virtualization capabilities in its networking gear that echo the same trend in servers -- announced in February it was working on a "flat, lossless" data-center fabric, code-named Stratus, designed to scale to thousands of 10-gigabit-per-second Ethernet ports and drastically reduce latency in data center networks. The next month, Cisco – to greater fanfare – announced plans to integrate networking, storage and computing in a common platform. Juniper didn't say when Stratus would be ready, though analysts have predicted its emergence late next year. Cisco expects to start shipping its new offering by June.