PoP goes the Google: how the pandemic has boosted the ‘cloud rush’

IBM data centre © Flickr/cc-licence/Bob Mical

IBM data centre © Flickr/cc-licence/Bob Mical

  • Thanks partly to Covid-19, enterprises are now serious about the cloud
  • And those who would provide the services are elbowing a spot for themselves in the value chain
  • The sharpest elbows at the moment belong to the big three public cloud providers: Google, Microsoft and AWS

The cloud is hot. You knew that. But here’s some extra detail: thousands of corporates, large and small, all around the world, are looking into a business abyss with 20 per cent revenue shortfalls and more this year, and are saying to each other “never again!” 

“We’re going to rejig our business models and our technology to make sure we don’t suffer a rerun.”

Telstra today published a new white paper identifying the technological challenges and the industry outlook post-COVID-19. The idea is to scope out the problem and to provide insights on how to recalibrate IT strategies, it says. 

The key insight from the survey is that the pandemic has accelerated digital transformation and redefined its meaning from its pre-COVID-19 state. It shows  that networks underpin technology to support the distributed and nomadic workforce - and are key.

As a result 93% of businesses (one of the highest percentages you will ever see in a survey like this), “state they have changed their IT priorities either incrementally, significantly, or dramatically,” says the report “Businesses are updating their overall IT strategy, with the top priority for respondents across all regions to set up policies for their remote workforce. This includes areas such as ensuring employees can connect securely and access their applications and data.

Dustin Kehoe, Services Director from GlobalData which produced the report, said, “It was interesting to see the overwhelmingly positive response for video conferencing. While the technology has always been available, we are seeing a generational shift in perception from pre-and post-COVID-19 eras.”

Given all this it’s clear that the broad IT industry had better be willing and able to get their customers cloudified.

According to analyst Caroline Chappel, Research Director for the Digital Infrastructure Strategies programme at  Analysys Mason, what’s emerging is a value chain with its important power positions now in the process of being properly defined.

“The colonisation of the cloudstack piece which a year ago we thought was going to go to some startups plus VMware and Red Hat, has very quickly transformed because of the need to get to market fast,” says Caroline. “As a result it is  being colonised by the public cloud providers, as the announcements of the last couple of weeks have shown.” They already have their cloud stacks and each has its own following of cloud developers (possibly the most important factor),” she says. 

Reaching thousands of edges

“Operators can easily build their optical networks out between data centres to support cloud network growth, says Caroline. “But the more interesting story happens at a higher level. Enterprises will need to deploy applications at many thousands of edges round the world, so if operators want to stay in the game they need to service enterprises at scale. Trouble is, not even a huge company will be prepared to go and stitch together deals with dozens of operators around the world, so the logic is that optical connect becomes a wholesale play for operators and the connections are put into place at scale by the big cloud provider partners.

A lot of the operators are multi-sourcing their cloud providers,” says Caroline. And why not . The more cloud providers gathered together on a telco’s colo footprint (all with their own app enablement layer and faithful following of applications providers) the better the opportunity for telcos to get involved in the value chain.”

The multi-sourcing approach is always a good de-risking strategy and it has the added advantage of  avoiding any one company or tech flavour becoming over-dominant. 

“It’s really all about the developers -  it will be who has the best customer relationships that will win,” says Caroline.

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