The Canadian carrier’s forward-looking plans bespeak a potential for cloud computing globally that could dwarf the market projected for 2010. In fact, the long-term prospects suggest cloud computing could eventually have a disruptive impact on a wide range of ancillary markets tied to network services, including the markets for enterprise and consumer CPE and mobile devices.
In June, TELUS announced that it is deploying Cisco’s Unified Service Delivery platform to complement its existing gear, which includes Cisco’s Nexus 2000, 5000 and 7000 switching platforms in its data centers. The combination means that TELUS now has a single network fabric spanning its Ethernet, IP and storage.
“We’ve created a major, advanced level of functionality of on-demand and managed services within our data center networking infrastructure to leverage for our managed IT solutions,” says Shawn Myron, TELUS’ director of managed IT solutions.
“The ability to provision services in a more on-demand fashion lines up with our strategy around investment in cloud computing and services.”
Industry wide, cloud computing’s customers tend to be big enterprises with big variations in their computing needs, such as a retailer that does 60 percent of its business from Thanksgiving to New Years. TELUS is targeting those, but it sees a lot of opportunities in the SMB space, too.
“We’ve gone as small as 10-20 seats leveraging our data center services,” Myron says. “It’s changing. Small businesses are looking at cloud computing as a way to reduce the TCO (total cost of ownership) of their entire infrastructure stack.”
Whatever the customer size, TELUS also likes the ability to provision services faster and more cost effectively.
“Being able to offer just about any type of network-centric service as a service rather than as a discrete box providing a service has reduced our provisioning [time] from days to hours,” Myron says.
Cisco touts Unified Service Delivery as a solution for “the delivery of consumer and business applications to any place and device.” That goes beyond the perception – based on deployments thus far – of cloud as being primarily limited to the enterprise domain.
For example, Cisco sees operators such as TELUS using Unified Service Delivery for consumer-facing services such as IPTV.
“Some of the IPTV applications are extremely server-intense, compute-intense and storage-intense,” says Mark Kummer, service provider vice president at Cisco Canada. “To be able to use this data center application and the service delivery network as the platform for that absolutely makes sense. We’ve got a number of service providers that we’re talking to about that right now.”
For service providers, another motivation is that IPTV is another revenue source to help pay off their enormous investments in next-gen networks. And in many cases, those networks were deployed partly with video in mind.
“The demands on those networks are growing daily, and video probably is the single biggest thing driving that,” Kummer says. “There’s a fourfold increase every year. So they’re having to invest a lot in their IP next-generation networks to be able to use that to deliver cloud services.”
Mobile is another example of how the cloud market is expanding. On the enterprise side, Juniper Research predicts more than 130 million customers and annual revenue of nearly $9.5 billion.
“We haven’t announced anything, but that’s definitely something we’re currently examining,” Myron says. “We’ve done some stuff as it relates to SaaS (software as a service) for unified communications and extending that to smartphones.”
Mobile cloud is an obvious fit for enterprises with a lot of mobile workers, as well as verticals – health care is one, Myron says – where there’s a lot of thin-client computing.
Thin is in in more places than one. At this year’s Mobile World Congress (MWC), some speakers argued that as mobile cloud services proliferate, there’s less need for smartphones that pack 1 GHz processors and hundreds of megabytes of memory – features that drive up their retail price and operator subsidy.
“It’s insane to run a Gigahertz CPU in your pocket,” Misha Nossik, SIMtone’s executive vice president and chief strategy officer, said at MWC. “I want slower, cheaper phones, but I want to use this massive computing power and a fat pipe to the cloud.”
In theory, that strategy would enable a wider, richer range of services that could be rolled out faster and to more customers because with most of the smarts residing in the cloud, wireless carriers and their business partners wouldn’t be limited by the capabilities of the installed base of handsets. Nor would consumers, because, although their devices would be less powerful, they’d still enjoy advanced apps and services thanks to the cloud.
In this scenario, the wireless carrier’s network plays an important role, reducing the chances that the operator will be marginalized as a dumb pipe. This vision also was a major reason for Cisco’s $2.9-billion acquisition of Starent Networks in late 2009.
“As cloud-based applications go to mobile devices, the packet network behind that is going to be so important if you want to bill customers for applications and understand what’s going on in your network,” Kummer says.
Cisco believes a similar evolution eventually will play out in the home, too, and is looking to capitalize on it with its “third wave” strategy. In that scenario, devices such as DVRs/PVRs would be less common, but as with the mobile cloud, thin devices still would be able to deliver sophisticated services.
“I think more and more of that experience is going to be delivered from the cloud rather than by a hard disk in house,” Kummer says. “I think the same is with the mobile handheld: It’s going to get smaller and smaller with less functionality.”