Telecom Trends in Cloud Computing

Ericsson, the leading Telecom vendor, has recently included Cloud Computing in its formula for Success:

Success = (device*innovation) + (cloud computing*innovation) + (mobile connectivity*innovation) + (application*innovation)

Our view at wedran.com Consulting is that Telecom operators and vendors that manage to reposition correctly to the cloud will be the most competitive. Those who fail might become “dumb pipes”, providing only connectivity.

IaaS leaders relevant for Telecom

What are the Market leaders within IaaS (Infrastructure as a Service)? The red dots are Tier-1 operators providing IaaS. The blue dot, Amazon, is the leading Visionary and the leading cloud provider.

Ericsson’s partnership with Akamai

In 2011 Ericsson announced an “Exclusive  partnership with Akamai”. (SonyEricsson had a cooperation with Akamai already in 2001.) The details of the exclusivity are unclear. However, Ericsson products will be prioritized and other vendors should therefore partner with other CDNs, preferably one of the vendors in the above Magic Quadrant.

Ericsson also announced that they are working on a Patented solution. Akamai and Ericsson are committed to bring to market joint products:

• Ericsson is building a machine-to-machine wholesale Cloud platform and will lease access to it i.e. provide an IaaS and/or SaaS solution.
  
• The solution will increase speed by offering a CDN, through Akamai. The target customers are network operators, content providers and high-traffic Customers like eCommerce sites, banking sites, premium content sites and B2B sites.
  
• Content will be delivered to any device at any time, at a faster speed. Mobile subscribers will have the same experience as on the fixed network.

Speed improvement with a CDN

Speed is the most important factor for end users and Speed is the major motivation for Ericsson choosing Akamai.  Akamai is a world leading CDN with 84000 servers and delivers 15-30% of all Web traffic. Akamai doubles the speed of many Services. The static data can be cached on more than 80000 servers located close to the users. The following case study from Akamai shows the speed improvement.

Recommendation to Telecom Operators and Vendors

Some operators see Cloud Computing and new services as a huge threat. They are currently losing money from users with smartphones using VoIP clients, Apps instead of SMS etc. Other operators see new possibilities and receive Revenues from new products.
Ericsson recommends a 3-step strategy for Operators:

1. Control e.g. deep packet inspection
   
2. Innovate new services beyond Phone and SMS
   
3. Move up the value chain.

We think that blocking traffic is no way to go forward. Operators should not control what services users can access. Operators should utilize Cloud IaaS and SaaS to decrease operational costs and then develop innovative services. Operators should start thinking more in the terms of IT and hire the right people if they aim to compete with traditional IT services and IT companies like Google, Microsoft and Apple.

Ericsson claims that “In telecommunications, cloud computing is essentially outsourcing information” .  Cloud Computing is a lot more than that, even in Telecom. It is possible to combine Akamai CDN (or other CDN) with Amazon Ec2, the leading cloud provider. Doing so, you will get an extremely scalable infrastructure where you can install any type of software, including Telecom Software.

The yellow servers are Akamai’s edge locations, close to the user That optimize static content such as HTML, Pictures and Video. The grey servers are Amazons edge servers that deliver Distributed Virtualized servers and are able to host most Software Systems. Together they provide extremely cost efficient, fast and scalable infrastructure and provide opportunity to build innovative services to huge amount of End users.

Transform IT from Cost to Revenue

Today, IT work is often equated with costs, e.g. development, operation, hardware, and maintenance. Cloud Services redistribute these costs, and other hidden costs, to more valued work, which will generate revenue.

Cloud Services enable companies to put time, focus, and resources on the right things. By outsourcing the operation to the Cloud, a companies IT resources no longer has to maintain servers and clients. Instead they are able to focus their time on activities that improve business and increase sales. The Cloud also releases resources to actively work with process improvements, support, and developing the flow of business models throughout the company. An efficient and correctly set-up business flow can generate large revenues in time.

A Corporation will have shorter Time to Market (TTM) with Cloud Services since the user can have a service or application uploaded, installed, and ready to be used in a couple of hours. The return will therefore also be swifter.

Developing a company in this manner increases both the Competitive Edge and Market Shares. Since the Cloud enables fast development and a quick redistribution of resources to the right type of labour, both large and small organizations can quickly gain new business areas.

Let others pay for your IT-systems

Getting started with Cloud Services does not take long at all. All systems are already installed and in operation by the supplier. All that is required is registration of a new client, configuration of the new account for your business, and, possibly, a transfer of data. A task that previously took months to complete, now only takes a few days.

The Multi-Tenancy concept reduces IT-costs tremendously, since several companies will share the most expensive aspects like system development, operation, and maintenance. Traditionally, companies invest in hardware and software to increase productivity and reduce administrative costs. The tightened competition and the price pressure have resulted in more and more IT-systems, which in turn render bigger costs. A transition to the Cloud is therefore the next necessity to grow and remain competitive.

Read more about the advantages of Cloud Services in the next post...

Press the button for Global Growth

Cloud Services enable Global Growth because the systems are built for Scalability. Those companies, big and small, that successfully manage to reposition themselves in the Cloud will become the most Competitive and thereby have the potential to become Market Leaders.

The Scalability is significantly improved through Cloud Services. As businesses grow and change, Cloud Services can be configured to fit your business need at this precise moment. Traditionally, it was necessary to assign expensive IT and Management Consultant to analyse and adjust the organization's IT-Systems as the business changed. With Cloud Services, all you have to do is to 'turn-up' the capacity, the number of users and/or the access to additional functions.

Security is also improved. The underlying systems are carefully monitored by security experts, who quickly implement security measures to all customers simultaneously. Cloud Systems also have a built-in Redundancy, which contributes to the increase in Reliability. This guarantees safety in case of power failure or server crash. Therefore, Cloud Services are especially suited to secure a Business Continuity.

Cloud Services are an Environmentally Friendly Alternative, since capacity and consumption is supplied from one location to all users, and server capacity is utilized to the max. This can be compared to using public transportation instead of driving a car.

Become inspired by the below informational video from USA's CIO, who explains how the government of USA has transitioned to Cloud Services, and the advantages that can be obtained.



Read more on the Amazon Cloud AWS in the previous post.

wedran AB in Stockholm, Sweden delivers consulting services such as Consultation, Pre-Studies, requirement Analysis, Project Management, Migration, Implementation, Customer Adaptations, Integration, Education, and Support. Contact Us for a presentation regarding benefits for your company, demonstrations, and consultation.

Amazon AWS (EC2, S3, CloudFront)

Amazon AWS (EC2, S3, CloudFront) is a Market leading supplier of IaaS. You can rent Servers, Server Capacity, and Data Storage. The benefits with this solution are, among others, that it is a Quick and Cost Efficient way to acquire a Scalable Infrastructure.

Data Storage on Amazon S3 has exploded during 2010 (se graph), i.e. a great number of companies have already migrated their data to the Cloud.



Amazon Web Services (AWS) is a service family of different Cloud Services where the most important are Amazon EC2, Amazon S3, and Amazon CloudFront.

Amazon EC2 (Elastic Compute Cloud)
This service allows creation, start, and maintenance of virtual servers (Windows Server, Linux etc), through one web interface. The servers can thereafter be used for many different applications, from public websites to phone switches. The name "Elastic" comes from the fact that it is easy to adjust server capacity during e.g. conjunction and traffic peaks. The cost for the service is also elastic, i.e. you only pay for the capacity that is needed, for example for the time that the servers are running and for the amount of data transferred.

Amazon S3 (Simple Storage Service)
This service concerns only data storage in the Cloud.
It can be used for several purposes:

• Internal file storage and document sharing
• Secure Backup and Archiving in the Cloud
• Web server to store static web content such as HTML pages, images, videos, documents, JavaScript, and CSS
• CDN (Content Delivery Network) in combination with CloudFront with the purpose to optimize response and download time.

Once again the price models are flexible, i.e. you pay for the amount of data stored and transferred. Prices are usually perceived as low.

Amazon S3 (Simple Storage Service)
This is a service to optimize response and download times on high-traffic global systems and websites. This is achieved through replication of the data from S3, EC2 or another server, to Amazon's great network of servers that are spread out throughout the world. For the end-users this entails a quick response time and a pleasant user experience, regardless of where in the world you are. Thereby, Amazon CloudFront offers the possibility for Global Growth. Once again, there is no fixed subscription fee, rather payment only for the quantity of data transferred.

Read about Facebook as the leading PaaS platform in the next Post...

wedran AB in Stockholm, Sweden delivers consulting services such as Consultation, Pre-Studies, requirement Analysis, Project Management, Migration, Implementation, Customer Adaptations, Integration, Education, and Support. Contact Us for a presentation regarding benefits for your company, demonstrations, and Free-of-Charge consultation.