Early this week, Ovum's telcoms analyst released a report indicating that major telcos will become strong cloud computing players. Among them were AT&T, BT, Orange Business Services and Verizon Business.

According to Peter Hall, report author and principal analyst at Ovum, these telcos have made considerable progress in the arena in just over a year. Thus in terms of services, they now have widely acknowledged credibility in the cloud computing field and can now compete with established players from the IT industry. 

“The major telcos have a long heritage in providing managed data center services and hosting and have combined this with their networking and security expertise to meet the needs of customers for cloud computing services," Hall said.

Evolving telco's role

Hall said, all of the players reviewed in the report see cloud computing as leveraging their core competencies and Orange has coined the term ‘IT operator’ to reflect its new role in IT services by analogy with its traditional role as a network operator.

"While AT&T, BT, Orange Business Services and Verizon Business are in the region after the MNC market, local telcos are more interested in the SME market." -- Claudio Castelli, Ovum

"We believe that the global and major regional telcos will become strong players across the full spectrum of cloud computing services including Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS), he said.

“But it’s still early days and telcos that have not yet developed a cloud computing strategy should not feel that they have missed the boat as the market is still embryonic and many end users are still cautious about cloud computing. However, we expect to see interest pick up quite rapidly over the next two to three years, so the time is right for many telcos to be developing a strategy and roadmap for their entry to the market,” Hall added.

Global vs. local telcos

So how do local telcos fare when compared to global ones in the cloud computing services market? Are they after different market segments or will they compete head-to-head for local enterprise customers? In terms of cloud computing, how much progress have local telcos made so far? Claudio Castelli, Ovum's senior analyst, takes a closer look of cloud service providers in the APAC region.

Asia Cloud Forum: In terms of cloud computing, what “considerable progress” (according to Peter Hall) have you observed in AT&T, BT, Orange Business Services and Verizon Business?

Claudio Castelli: Many telcos have offered web conferencing and other communications-based SaaS solutions for some years, and some have also offered a SaaS model for business applications -- generally for SMEs. 

Examples include SingTel's Marketplace and Telstra's T-Suite -- online platforms for delivering business applications on demand. They are aimed at SMEs and include applications in areas such as accounting, human resources, and CRM.

Only more recently have telcos started to approach larger organizations with their cloud computing services in a coordinated fashion. We see an increasing number of MNCs taking cloud computing for greenfield applications and taking the opportunity to test and validate the model before deploying it more broadly.