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Last Tuesday, research firm Ovum predicted that in 2011, "cloud services will move from early adopter to the early mainstream stage and will have an impact on key emerging telco services."

According to Ovum, telcos will emerge as key players in the enterprise-grade cloud computing market because of the scale of their ICT operations and their ability to offer end-to-end service level agreements (SLAs) for Infrastructure-as-a-Service (IaaS) offerings over secure managed networks.

"Early adopters" are referred to the telcos that are launching their first generation of cloud services offerings -- usually as an evolution of existing managed network services and long-term customer relationships. "This is often a result of the fact that telcos have needed to create virtualized cloud-style IT services for their own internal use, and it makes sense to leverage this investment to extend the scope of managed network services to include a broader range of IT services as well.

"These services tend initially to be somewhat 'hand crafted' for each customer, with each new deal creating further investment momentum for the development of cloud provisioning, management and operational infrastructure," said Steve Hodgkinson, research director, public sector, Australia and New Zealand, Ovum.

"Mainstream stage," on the other hand, is characterized by the creation of more fully mature cloud service offerings. These "mature cloud offerings" usually comprise the integration of the telco's marketing, sales and provisioning interfaces, the development of consulting and systems integration services (or alliances) to assist customers to move into the cloud.

Such "cloud offerings" also involve the creation of self service portals and a fully developed service catalog, service usage metering and billing applications, service management and SLA frameworks, security systems, the build-out of data center capacity and the creation of infrastructure facilities in a range of geographic locations to suit customer requirements, said Hodgkinson.

As cloud services advance from early adopter to early mainstream stage, the key emerging telco services are likely to offer fully integrated IT and telecoms services to enterprise customers. "Cloud computing provides the basis for telcos to defend themselves against the becoming of providers of low-value commoditized communications services, by offering the broader bundle of IaaS offerings necessary for an enterprise to rely on the cloud for mission critical applications," he added.

Hodgkinson advised, "telcos can differentiate themselves with their ability to manage both the computing back-end and the delivery network to assure the quality of cloud services right to the customer's browser using MPLS VPN connectivity."

While global telcos, such as AT&T, BT and Verizon Business, currently lead the charge on the investment in cloud services, and who naturally benefit from the scale of their investments globally in data centers and managed networks, said Hodginson, the potential of local telcos should not be underestimated, especially with the remarkable ability to scale.

"[Local telcos] are usually among the largest ICT organizations in their own country, which is important for scale. Cloud computing is a scale business -- bigger is better and biggest is best. Local telcos also have the benefit of focus on their local markets, operating within the legal jurisdictions of their country and storing data onshore," he explained. 

As long as the common perception "data is safer on-shore" -- particularly among government agencies -- prevails, local telcos will benefit from the alliance with global telcos to offer "seamless global operations." Such alliances are also expected to extend to other IT service providers, in the same way alliances exist for traditional telecoms services.