A New Class of Cloud: The Carrier Cloud

Carriers were not on the bleeding edge of the cloud services trend, but they are uniquely positioned with their network capabilities and strong relationships with existing customers that they can leverage to succeed in the cloud services market.

"Carriers are among the most trusted businesses out there, and they can compete with anyone," said David Frattura, senior director of strategy, cloud solutions, at Alcatel-Lucent. "They already have a lot of what it takes. The can leverage their business service experience, their wide area networks and their existing customer relationships to attach new services to relationships that are already fundamentally strong. In that sense, this is not a new market for them."

Eventually, as they adopt cloud computing architectures and practices to better serve both their customers and their own internal organizational needs, the concept of the carrier cloud will take on a whole new, expansive meaning. The movement toward a carrier cloud may have begun in the business services unit of most service providers, but it could quickly roll out across entire carrier organizations to affect every group within the company and every service the carrier provides.

"For carriers, the cloud is both a driver of internal transformation and an external revenue resource," Frattura said. Cloud efficiencies can be applied to both sides of the service delivery process and across multiple service types. For example, the residential services unit of the telco can use localized transport from a distributed cloud to more efficiently deliver services such as video-on-demand movies. Meanwhile, the mobile unit of the carrier can use the cloud to support better roaming experiences for users engaged by content applications and Web browsing.

Extending the carrier cloud throughout an entire carrier organization also can help carriers become more attractive business partners, particularly for content companies and Internet firms. A carrier with a well-developed cloud infrastructure, for example, can ensure a content partner that its content will be delivered in the most efficient, reliable and affordable manner to users, resulting in higher profit margins for both partners.

Also, as Net Neutrality continues to be an issue of concern in the Internet sector, cloud adoption puts carriers in a better position to realize greater value from their networks, and have fewer concerns about how heavy usage might affect their networks. Content companies, in turn, will feel more confident about partnering with them.

"If carriers can use the cloud to create a better platform for content companies, the better it will be for the end users," Frattura said. "The carrier cloud can become the place for all of your tablet PC and smartphone applications to reside if you lose your device. In the future, you can envision the carrier cloud becoming more like an app store."

Caroline Chappell, independent analyst at Heavy Reading, said it may take a long time for carriers to completely revamp their approach, but that it is possible. "Recognizing that the network is becoming a commodity platform is a start," she said. "It is long way from where they are today to that kind of ideal, but they are beginning to see the value of making this effort."

Camille Mendler, principal analyst at Informa Telecoms & Media, added that if carriers have not started their cloud-driven transformations, it is important that they recognize that time is of the essence. "The public Internet-based cloud companies are getting better every day. Some of them, for instance, have started to recognize the need to provide direct access to the cloud. To compete, carriers need to get started on making their processes and applications more liquid."

If they can successfully complete the transformation to the carrier cloud, the evolution might even allow carriers to re-invent themselves and their brands: They may own and operate networks, but the business they will be in will be all about creating positive usage experiences.