GigaOM » Telcos

Cloud providers seek to become “arms dealers” to telco, carrier clouds

Barb Darrow — Thu, 09 May 2013 13:32:05 +0000

It’s clear that all the cloud providers really want old line telcos, carriers and hosting providers to embrace cloud technologies — they want the business.

The cloud technology providers are banking that these legacy players have tried to build their own cloud services and realized that it’s easier and more productive to base those services on a cloud expert’s technology. So they’re rolling out bundles and packages tailored for that constituency.

Case in point: On Wednesday Tier 3 announced the “Reseller Edition” of its Enterprise Cloud Services. The Bellevue, Wash.-based company built its own management, controls and services atop VMware vSsphere and packaged all that up for third-party providers from VARs to telcos.

And Thursday, Dell and OnApp announced joint offerings that are pre-tested to enable service providers, MSPs and telcos ro roll out cloud services as fast as possible.Last month, Rackspace pitched its own cloud infrastructure as a short cut for telcos, MSPS – the usual suspects — to build their own clouds.

Pivotal CEO Paul Maritz has repeatedly used wireless carriers as a key target market for the big data-oriented cloud platform his company is building.

So if carriers are gearing up to build clouds atop third-party IP, why is it happening now versus say, six or nine months ago? Tier 3 CEO Jared Wray thinks it’s because they see the market maturing. “Before recently it just wasn’t defined and there wasn’t a huge de facto open source initiative going on,” Wray said. Now, with OpenStack, in particular, that has happened.

“OpenStack has the fanfare and momentum, so the telcos see a defined, evolved ecosystem and it’s looking like they understand what the key components are,” Wray said. “The idea now is to use the colos and wires they already have and layer value added services atop all that.”

Wray attended last month’s OpenStack Summit to see for himself. As to whether Tier 3 will add OpenStack support he was noncommittal.

This is, of course, all very self-interested by these cloud providers to say. But there is evidence that hosting companies, data center providers and telcos really are getting pressure from their customers for the sorts of cloud services that come from Amazon Web Services and others, said Carl Brooks, cloud analyst at The 451 Group.

To be fair, not all the old line companies have given up on building their own technology for the cloud era. Thirty-year old MetaSwitch is open sourcing it’s new IMS core software to ease cloud development.

But whoever’s technology ends up in the mix, as raw connectivity and compute get ever more commoditized, the secret to profitability — and happy customers — is truly useful services and cloud seems the deployment model of choice.

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Guavus raises $30M to help telcos do big data at network speed

Derrick Harris — Thu, 10 Jan 2013 12:17:13 +0000

Guavus, a San Mateo, Calif.-based company focused on analyzing network- and other sensor-based data, has raised $30 million in financing from Investor Growth Capital and QuestMark Partners, along with Artiman Ventures, Sofinnova Ventures and Intel Capital. The new investment brings Guavus’s total financing to $78 million since launching in 2006, and comes at a time when mobile providers, especially, are fighting harder than ever to woo (and keep) skeptical customers.

In a world of streaming data and lots of it, Guavus’s strategy of analyze first, store later has been paying off. When I spoke with Guavus founder and CEO Anukool Lakhina in May, he said the company was already serving three of the top four mobile and wireline providers. They’re impressed with the platform’s ability to analyze data as it streams in off the network, meaning they can make insights closer to real time rather than waiting for data to write to a disk before querying it.

In the that old model, explained Lakhina — who used to work in the high-performance computing division at Sprint Labs (and who’ll be presenting at our Structure: Data conference in March) — companies would worry about storing the data first, but the queries never catch up to rate at which the data is flowing in. By analyzing the data as it inflows in off the network, carriers can do things like tell users their data usage in near real time or detect the source of traffic spikes. In the longer term, they could figure out customers’ activity around usage, or which apps (or types of phones) are responsible for the most data consumption, and try to build customized plans or pricing tiers.

And actually, Lakhina added, although Guavus is built to capture network data, ”most of our engagement takes place beyond the network.” By fusing that data with demographic and other user data, providers can do a good job segmenting customers groups around usage patterns.

Ultimately, mobile providers and anyone else generating streams of data off their networks, while also serving customers, has to come around on the idea that they need to get more focused on that data. “Our customers are using data to optimize their businesses and delight customers,” Lakhina said, but that means breaking the legacy mold of capturing data, transporting it to a central location and then finally worrying about analyzing it. Rather, they have to “collect [data] once, then analyze many, many times” at every step along the way.

Feature image courtesy of Shutterstock user PunyaFamily.

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Where’s the money for telcos? Mobile broadband and cloud, says Ovum

David Meyer — Thu, 03 Jan 2013 18:17:26 +0000

How are the next few years looking for telcos? Not so hot overall, according to a new forecast from Ovum. That said, the analysts do highlight one or two silver linings – the main one, by far, being mobile broadband.

First, a look at the overall picture. Ovum estimates that telecom industry revenues for 2012 will have totalled more than $2 trillion, which is up marginally from 2011′s $1.96 trillion, and capital expenditures should also be up from $314 billion in 2011 to more than $330 billion last year. Not stellar – that revenue growth is two percent, down from seven in 2011 – and in fact, the analyst house is warning that growth may flatline over the next five years.

However, Ovum also reckons that there’s significant growth to be had in specific sectors. Number one for the operators is mobile broadband – here, Ovum predicts a very healthy 19.2 percent compound annual growth rate between now and 2016, generating $123 billion in incremental revenue during that period.

This is important stuff to bear in mind as it colors the behavior of telcos, particularly when it comes to subjects such as net neutrality. A top-level chart of those forecasts:

We already know full well that mobile broadband revenues are in the growth phase. However, as Chetan Sharma pointed out last year, this too shall pass, and operators really need to lay the groundwork for the next stage. A stage that should really entail so-called over-the-top services.

Here’s where Ovum sounds a pretty big warning, albeit a mixed one:

“Over-the-top services such as digital music and mobile gaming are not compelling revenue opportunities for telcos. However, they are important for strategic reasons.”

Those strategic reasons appear to be around capturing market share, rather than actually, you know, making more money. Do the telcos really stand a chance in competing with nimbler upstarts such as WhatsApp and giants such as Apple that dominate other parts of the industry? I’ve expressed my skepticism pretty clearly on that one a number of times.

Another interesting growth area, Ovum suggests, is that of telcos’ public cloud services. Check out this chart:

Software-as-a-service is the biggest opportunity – there, Ovum calculates $19 billion in revenues during 2012 and more than $40 billion in 2016. Remember that when we talk telco SaaS, we’re talking mostly enterprise-focused services such as unified communications, where the extra draw is the telco’s ability to provide private, secure access. Some service providers are also offering CRM applications and the like, often through partnerships.

Infrastructure-as-a-service and platform-as-a-service are smaller but growing faster. Overall, the analysts peg cloud as the fastest-growing new revenue opportunity for service providers, if smaller than mobile broadband. Exciting times, if the telcos manage to grab that opportunity.

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To scale, telcos must learn from the ops community

Stacey Higginbotham — Thu, 01 Nov 2012 16:35:38 +0000

There are as many small base stations out in the world as there are large base stations attached to cell phone towers, according to an Informa Telecoms & Media report released Wednesday. That doubles the number of equipment telcos must monitor and manage to help deliver a crystal clear signal on your cell phone, but it also creates a management nightmare and perhaps, an opportunity.

The report states that between October and November 2012, the number of small cells reached 6.1 million with macrocells worldwide totaling 5.9 million. Most of the small cells at 80 percent are inside people’s homes helping improve the cell signal inside the house. But others are in crowded venues like offices and stadiums where the smaller cells act as a backup and signal booster for larger cell towers nearby. Sprint by the way has deployed a million of those small cells–up from 250,000 in 2011.

For operators who now have up to four times as many base stations to manage, the network complexity can be daunting. Sure these small cells boost the quality of the subscriber experience but managing all of those end points comes at a cost. And who will pay it? Some operators charge users for their in-home femtocells, which can frustrate people who believe that the operator should provide quality coverage as part of the basic service.

More cells, more technologies bring more complexity

But the problem will only get worse as more cells and more technologies are added to the network, and that’s why operators must look to their data center operations to understand how to scale out their networks at commodity server prices — not telco gear prices. For example, data center operators ranging from Google to Facebook have relentlessly focused on their infrastructure to eke out optimal performance at the lowest cost. Part of that is because their cost of goods sold (i.e. ads) are dependent on how much it costs to show a user a page.

But as demand for data creeps up and if carriers want to maximize profits while continuing to invest, their current equipment and the way they manage it must change. It must become easier to put in the field (no more deploying engineers and spending a couple of weeks to adjust new base stations) and more automated. Vendors such as Alcatel Lucent and Nokia Siemens Networks are trying to offer equipment that’s more flexible and can be deployed easily. Items such as Alcatel-Lucent’s LightRadio gear is an effort to make deployment easier. Gear from Intucell seeks to use self optimizing networks to make the network coverage more adaptive and automated.

And the same Informa report indicates that some operators are trying to build services that offer network access over small cells without the operator having to own the underlying assets. They call is Small Cells as a Service, or SCaaS, because of course they do. Virgin Media, Colt Telecom, Cloudberry Mobile and ClearSky are all testing products with a SCaaS model in mind.

Needed: Better and more programmability

Other than rethinking gear and introducing new business models borrowed from the cloud, telcos should also think about bringing more programmability into their core networks and operations. The software-defined networking craze in the data center could yield just as impressive benefits for carriers if they can bring themselves to adopt gear that uses commodity parts and relies more on the telco engineers as opposed to buying a box that Cisco or Juniper programmers tweak for them.

A mindset shift has to occur in the telecommunications world, but many are thinking about it both on the operator and on the vendor side. But as the complexity of networks increase most carriers know they have to do something.

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The rise of M2M security challenges

Tue, 11 Sep 2012 15:49:35 +0000

There will be over 700 million cellular-enabled machine-to-machine (M2M) device adoption and system deployments in the U.S. by 2017. As the volume of M2M devices and associated data increases, so too will the probability of hackers and malware writers targeting these systems to exploit networks, steal data, hijack systems, and compromise workflows. Security specialists recognize the potential risks and are already developing technologies and methodologies for hardening M2M systems from attack. This report examines some common M2M attack vectors and provides solutions for safeguarding against them.

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Takeaways from mobile’s second quarter

Wed, 18 Jul 2012 06:55:19 +0000

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Opportunities with Communications-as-a-Service

davemichels — Mon, 25 Jun 2012 06:55:02 +0000

Communications-as-a-Service (CaaS) technology brings together business applications, the Internet and the world’s public-switched telephone network (PSTN) to provide businesses with new ways of enabling communication. The cloud-based technology delivers telephony infrastructure as a web service: scalable capacity, instantly available, with usage-based invoicing. This report will examine some basics of CaaS technology, including its benefits and drawbacks, and its importance when it comes to the new generation of API developers. Finally, it profiles two of the largest CaaS providers, Voxeo and Twilio, and offers considerations for employing those companies’ solutions.

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Cloud computing infrastructure: 2012 and beyond

Wed, 20 Jun 2012 06:55:39 +0000

Cloud computing continues to change and shape the technology industry, and these days discussions are about more than simply reorganizing the IT department. New developments in chip and hardware architectures, finding greener data centers, regulatory concerns and simplifying data analytics are all discussions currently circling through the industry. For this report, GigaOM Pro has gathered six of its analysts to discuss these topics and others in current cloud market. Here we present several areas to consider when thinking about your business in the cloud.

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Over the top in 2012: trends and technologies to watch

Thu, 14 Jun 2012 06:55:23 +0000

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Key technologies for the smart city

Wed, 28 Mar 2012 06:55:30 +0000

As more and more people move to urban areas there is an escalating need for the smart city, where technology, sustainability, citizen well-being and economic development integrate. Currently five key technology sectors are enabling the smart city: smart grids, smart transport, smart water and waste management, smart building systems, and the enabling ICT platforms for the smart city. This report examines each and provides recommendations to those key players — IT companies, telcos, utilities and real estate developers — that wish to benefit and harness those technologies.

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