The overlying theme at this year’s PTC conference - the rise of cloud services - is leading to a not-so-distant future where carriers can only remain relevant if they get into the data center and content delivery business.
That was the opening shot from Pacnet chief Bill Barney during the morning keynotes at PTC on Monday. Riffing off the conference theme of disruption, Barney pointed out that the stocks of telecoms companies, CDN providers and data center operators have been declining the past few years, while companies like Google and Facebook have quadrupled their market cap in the same time period.
The good news, he said, is that carriers can still turn the rise of cloud to their advantage. “These companies are using our networks, so how do we monetize that?”
Barney said the biggest industry sectors will be social networks, mobile, search and telecom carriers – but only if the latter can transform themselves to be integrated into that value chain.
“The data center guys, the CDN guys and the telecom guys will all be in the same business in ten years,” he predicted. “We have to change the way we operate if we want to be key players in all this, and we can work together to make sure that happens.”
Barney had support from fellow keynote speakers such as EdgeCast chairman and CEO Alex Kazerani, who said there was a major opportunity from the VAS side to target over-the-top companies. “We can create premium products and services for Internet players, particularly where they’re going into countries where they don’t have much presence yet.”
Richard Warley, CEO of KVH, said that the telecom sector “is in a much better position than it’s been in the last ten years to succeed” in part because it has not only the infrastructure but the business relationships to add value to the cloud.
Warley added that telcos need to future-proof their planning as they invest in their infrastructure going forward.
“You can’t predict the future when you have an entire generation of people growing up thinking of the internet in an entirely different way,” he said. “We need to create an environment where they can flourish. We have to think about how to enable and empower the really smart people with the next big idea.”
Interestingly, Amazon chief Jeff Bezos was cited by keynote panelists as a key example of how CEOs should think and innovate.
“When you look at what Jeff Bezos has done, he didn’t let Wall Street get him down with short-term profits,” said Steve Smith, CEO of Equinix.
Barney of Pacnet agreed. “Amazon is a good example of execution,” he said. “The idea that you can buy computer cycles with a credit card is amazing. CEOs will be looking at that.”