If this is the year of cloud computing as the next big thing in the convergence of networking and IT management, Verizon Business's new cloud-based Computing as a Service (CaaS) solution shows that telecom service providers have a serious play in developing IT-infrastructure as a service.
Verizon's service, which has been in development for the past two years and was announced a year ago, gives the provider another avenue to increase enterprise revenue and makes the statement that telecom service providers, with their network expertise, have a strong role to play in the emerging cloud services market.
"I think of cloud services as a high-concept that service providers are trying to get into -- something more of a pay as you go, pay-per-use service,' said Amy Larsen DeCarlo, principal analyst of IT Managed Services at Current Analysis.
This is an area where telecom service providers have a special place, as do hosting companies and systems integrators, because of their expertise, she added.
'This is a big deal. Of course there's a lot of hype about cloud computing, but this is real. This isn't just something Verizon renamed,' Larsen DeCarlo said. 'There are a lot of good pieces to this announcement, and the really important thing is that it really seems to be in demand. Over the long-term, it brings a lot of what service providers have been talking about forever into a real service, and it's going to make service providers real revenue.'
Verizon Business isn't touting CaaS as the solution for all enterprises. Instead, the providers appear to be targeting certain types of enterprise customers, whether in terms of size or specific IT needs.
Some of the useful purposes for the cloud service include using it for new development projects, major events, and mergers and migrations to shift IT resources quickly, Verizon said. The quick and flexible provisioning also suits retailers with seasonal demand, companies with annual benefit enrollment or sales promotions that drive temporarily spike traffic to web sites.
How much an enterprise is going to do with cloud computing is a pretty significant debate, according to Tom Nolle, president of CIMI Corp. 'Cloud services won't catch on the form most people talk about. It won't replace enterprise computing. But it will supplement enterprise computing.'
In CIMI enterprise surveys, Nolle said companies cited the need for backup, overflow infrastructure and special applications as the main reason enterprises would consider supplementing their IT infrastructure.
Storage as a Service
While Verizon's much-anticipated move is making a splash, it isn't the first provider to offer services that are more than bandwidth and hosting services. AT&T recently rolled out Synaptic Storage as a Service, where customers can log on and decide how much storage they need and where they need it.
'It's another recent example of cloud computing because storage is an IT service that can be offered in the cloud, just like processing capabilities,' Larsen DeCarlo said. AT&T and Verizon are going down remarkably similar paths and are in the lead as service providers in cloud services because they can also handle hosting, integration and security.
'We're at the beginning of the evolution of cloud computing services being offered by service providers, she said.