By Adan Pope

Communications service providers beat expectations last year by communicating to their Enterprise customers that they would be players in cloud computing, beyond the dumb-pipe role that had been carved out for them by others in the supply chain. Many successfully navigated the hype by, in part, articulating the value of their investments in network infrastructure and service creation environments. Some sent the message to the market that cloud would become a core piece of their overall strategy and roadmaps. But by its very nature, cloud is a volume play as much as it is a value play. The economies of scale demand high volumes of transactions, which require lots and lots of customers to move some, or all, of their computing to the cloud, especially large consumers of IT services. That means that the fading hype must quickly give way to the practical realities of implementing cloud services, before the momentum behind cloud scatters into the winds.

We might start with the term “cloud” itself. It doesn’t inspire confidence – certainly not the confidence that an Enterprise customer needs. Clouds are still reminiscent of the early Clip Art days where the PSTN vaguely occupied an amorphous engineering diagram. In its new iteration, the name cloud hides the fact that these services are hosted or virtual offers. The big difference from traditional hosted services is the nature in which consumers interact with them. In the past, a hosted billing service would take call records and churn out bills in a large warehouse, mail them out to customers, and that was that. Today, the interaction with the hosted service is via the Internet, and therefore the major factor going forward is the link between the hosted environment and the network connection. Where these two are tightly coupled places some of the traditional communication service providers in the ideal place to capitalize on the mobile data access trend.

Availibility is a major challenge, as today a company can touch the hardware they use to run the company; it’s in the building. Moving that hardware to an unseen location creates a formidable burden of proof and assurance on the cloud service provider. Today’s typical cloud offers 99.9% availability, which translates to about 10 minutes of downtime per week. Telecommunications providers routinely offer 99.999% (or “five-9’s”) availability, or the equivalent of 6 seconds of downtime per week. Where cloud consumers fit on that curve depends on who they are (residential customers backing up family photos versus a financial institution managing billions in assets). For many corporate customers, ten minutes might be acceptable at the right price point, but cloud outages make for great headlines, which, in turn, raise the bar on establishing trust and increase the skills needed to run a stable service.