Cloud Services: Carriers Want Cloud Control


Telcos and cable companies are betting big on cloud services. From jaw-dropping acquisitions to mountainous investments, traditional carriers are putting their money where their mouths are and aggressively shouldering their way into the cloud computing space.

For telcos, it just makes sense. As Verizon says, the company already has the network in place, why not add cloud services on top of it? With that endgame in mind, telcos have put the channel squarely in their sights, looking to partner with solution providers that will add their own services on top of the telco-offered infrastructure and services.

For example, Verizon, which scooped up Miami-based cloud infrastructure darling Terremark in a $1.4 billion acquisition deal earlier this year, plans to do a large percentage of its cloud business through partners, said Kerry Bailey, Verizon’s Terremark group president.

“Our view is that 40 percent of our business will come through channels and we expect to drive that higher,” Bailey said.

Verizon isn’t alone. AT&T has said it flagged $1 billion to spend on cloud and mobile services this year. Elsewhere, Time Warner Cable recently shook off its cable-only shackles with the acquisition of cloud provider NaviSite, a $220 million deal that gives the cable company an established weapon with which to attack the cloud.

Telecom giant CenturyLink also threw its hat into the cloud ring, with the $2.5 billion stock and cash acquisition of cloud provider Savvis, which closed this month.

Blake Wetzel, CenturyLink vice president of the Business Partners Program, said the cloud is a major target and it plans to bring the channel along for the ride.

For CenturyLink, partners play the crucial role of service providers as consultants and delivering services such as co-location and other offerings that target the application and services layer. The partner takes the ball and runs with it, creating revenue opportunities.

“They’re working with the customers to bring the solutions together,” Wetzel said, adding CenturyLink anticipates cloud computing to have a CAGR of $50 billion by 2013. “It is the major growth component we see.”

While some solution providers worry that telcos and cable companies could become a competitive force in the cutthroat cloud computing game, the potential partnership and revenue opportunities outweigh the concern.

“When Verizon bought [Terremark] my first question was, ‘What will this change?’ ” said Larry Gentry, president of Scottsdale, Ariz.-based Custom Storage, a Terremark partner. “In the last few months, I’ve seen no changes. They rely on partners to bring in opportunities. I don’t see Verizon as a competitor.”

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