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Will AT&T Succeed in Cloud Computing?

Cloud computing is a big tent and there are a lot of interested parties. That includes telecom carriers with AT&T recently launching what it’s calling a utility computing service called AT&T Synaptic Hosting. The company describes it as a “next-generation utility computing service with managed networking, security and storage for businesses.” AT&T is the largest carrier in the US but also has a huge global footprint as an international carrier which it will likely leverage.

I’ll have a lot more to say about carriers getting into cloud computing in future blogs. But for now, to me this announcement just underscores the fact that IT and telecom convergence is alive and well. This means not only a convergence of technology but also of markets with telecom providers increasingly competing with IT suppliers and systems integrators to provide voice, unified communications, as well as raw compute-based and Web-based services.

Why is this happening? For one thing, carriers are moving to an IT-based model and the telecom central office of the future will be – guess what? – a data center. This means that they can outsource these capabilities not just for voice but for IT services as well. And if companies like Google and Yahoo can provide voice services, then turnabout is fair play. Telecom carriers already provide various hosted data services resident in their own privately owned and managed geographically distributed data centers.

Will carriers be successful at this? This is where it gets interesting.  As I talked about in a previous blog on telecom and virtualization, this isn’t an easy question to answer. Some clues: if cloud computing represents the fulfillment of Sun’s now slightly dusty but still viable slogan that “the network is the computer”, then the importance of the network in any cloud offering shouldn’t be overlooked.

In this sense, the fact that the carriers own and operate their own networks is a major trump card. They also have organizations which have longstanding commitments to SLAs and five-nines reliability. On the flip side, carriers have less expertise in computing as a target market and don’t understand the enterprise data center environment as well as cloud providers coming out of the IT space, especially newer trends such as Web 2.0. And finally as Mike Eaton, CEO of Cloudworks has pointed out,  their achilles heel could very well be customer service.

Let me know what you think about their chances of success.

Posted by Tom Valovic on 09/02/2008 at 12:49 PM


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