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Network Service Providers Can Compete and Win in the Cloud

August 17, 2011 - 2 Comments

If you’ve been following the research from Cisco’s Internet Business Solutions Group, you may have already seen the survey on Service Providers and their viability in the Cloud at the end of last year. Yesterday I was preparing for a customer briefing when this report came to mind and I thought it may be useful to summarize the high points if you haven’t read it yet.

The custom research found that Network Service Providers have an advantage when offering Cloud services if they use their unique assets to differentiate their services. Over-the-Top (OTT) players may have seen success in offering plain vanilla Infrastructure as a Service at large scale and low prices but the opportunity for supplying the high-end and high-value spectrum of Cloud services is still underway. You will probably agree with me that security is critical for any service these days. It is a challenge that requires proper design and planning and proper vigilance and quick responses are what differentiate the winners from the losers. Cloud is a large market in the midst of a transition and it will be fun to watch how everything plays out, I’m placing bets on the Service Providers to scoop up a valuable share of the ~$43 billion XaaS market by 2013.

For Service Providers offering Cloud services, the survey gives further insight on differentiation in a vast sea of Cloud offerings. When asked how much value certain aspects of differentiation gave Network Service Providers, the ability to offer End-to-End SLAs with control over the data center and the network ranked the highest. Collectively, we spend a lot of time talking about how important innovations in the data center are (and they are important) but a Cloud data center is useless without a network. This is why we’ve promoted our Unified Service Delivery solution time and time again. The combined view is foundationally necessary if you want an enterprise-grade Cloud solution performing to real-time expectations. Only Network Service Providers can offer and fulfill End-to-End SLAs.

Network DifferentiationClosely following End-to-End SLAs as a valued differentiator is the ability of Network Service Providers to provision infrastructure on-demand across the network and IT. These days success in the market can be determined by whether or not you beat your competition by hours and days instead of weeks. A Cloud provider needs to be able to offer services that are agile enough to deliver on time and not hinder progress. Additionally, being able to monitor deployments from creation to delivery to end-customer use gives Network Service Providers another advantage. Finally, we’ve talked about the need for Cloud deployments to be elastic. Inside a data center, a Cloud provider of any flavor should be able to ramp work up or down quickly, but only Network Service Providers have the ability to turn up the networking necessary to bring in and out the associated traffic creating resulting from the change in needs. A Cloud provider that can control the workload levels and priorities within a fine degree inside the data center but then only relies on best efforts delivery of the services between data center and end-user cannot match a Network Service Provider and meet the full SLAs talked about above.

The above table offers a snapshot of the rest of the value differentiation aspects.

But this is just one part of the survey and I pulled out what I saw as most relevant to highlight for this blog. I recommend you check out the rest of the report and get back to me if you want to talk further on what the research found.

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  1. Thanks for the article, Simon. I agree that security plays an important role in cloud adoption. CSPs are well positioned to address this because a) the CSP exists in a heavily regulated market and b)has most existing customers already use their services to deal with sensitive information (whether by phone, video, etc.). So there’s already trust formed with CSPs that can be used to encourage cloud adoption. One other critical factor that should not be forgotten is loss of control. We’ve found, to allay enterprises’ fears, CSPs should actually look to service visualization as an extension to end-to-end SLAs. This way customers can touch and feel the service in a similar fashion as if it were not based in the cloud. There’s a white paper on this topic which provides some great insight and shares some findings like those in the Cisco survey, if you’re interested in learning more:

  2. wow great insight, thank you very much for sharing.