Opinion: Carrier Competitors, Or Partners?


Verizon added Terremark to its capabilities. Time Warner added NaviSite. Software House International invested $20 million in a cloud services data center. These moves put Verizon, Time Warner and SHI squarely in the space currently dominated by Rackspace and Amazon Web Services -- servers and storage served up via the public cloud.

This series of strategic moves begs the following questions:

• If you’re selling servers and storage today, is it time to take stock of your current vendor partners?

• For traditional server and storage vendors (e.g., HP, IBM, NetApp, etc.), will current or further alignment with an infrastructure public cloud provider (e.g., Rackspace, Savvis, etc.) impact your choice?

It’s been more than a year since we completed a study of networking infrastructure VARs and found that more than 50 percent of you are either recommending or influencing carrier services.

Then last March, we framed up what we called the “Evolution of Technology Delivery” in a research piece and subsequent eBook named, “Can You See Through The Clouds?” (available for download on iped.com). Sixty-two percent of you indicated an expectation that telecommunication-wireless carrier/cable companies would provide IT computing capability to your customers by 2012. More than 44 percent indicated concern these new players would be competitors.

We see two clear paths. The first occurs when the telco-cable company sells cloud-based services via its direct-sales force to meet customer communications and IT needs. The IT offerings are often considered capabilities that, when sold, offer a “stickier” customer solution than a stand-alone broadband recurring sale. In this role, the telco-cable company is likely a competitor.

The second path occurs when the telco-cable company broadens its custom hosting capabilities by expanding offerings with a public cloud service provider. In the Verizon example, provided the Terremark reseller program remains as is, the telco-cable company is now a partner. In fact, it is more than that. It is a vendor partner. And for the small number of VARs “whitelabeling” or reselling Terremark cloud-based services today, you’ve already finished this thought:
Verizon will become your vendor.

For those of you not currently authorized as telco agents, Verizon via
the Terremark brand could be added to your line card. This is not because you’ve added broadband communications, but either because you choose to white-label server and storage capability as you enter the managed services market, or because you’ll resell server and storage capacity hosted in the cloud.

Many of you cited SHI as competitor. Should you add SHI to your servers and storage as a service vendor list? It will be interesting to see if SHI will consider using the channel (as does Amazon Web
Services, Rackspace and Terremark). The other very clear alternative is where SHI simply leverages its existing customer Rolodex and sells direct as an alternative to straight on-premise resale into a customer data center.

Cisco, IBM, EMC, Verizon-Terremark, SHI: Who are your server and storage vendors today? Several of you have mentioned you’re waiting for your traditional vendors to make a statement of direction.

We look forward to helping you see your way clear.

BACKTALK: Contact IPED General Manager Rauline Ochs via e-mail at rauline.ochs@ec.ubm.com.