Little Fluffy Clouds - Part 1

Today, any hosted service is described as belonging in the cloud. We are told that cloud services are both an opportunity and a threat to the telecoms industry. On the one hand, cloud services enable telcos to increase the range of services and applications that they offer to their clients. On the other, the advent of cloud technology allows so-called “over the top” providers to offer services that compete with those from the telcos. This has opened up a lively debate that touches on a number of areas, from value added services, to data protection and preservation and to the touchy area of net neutrality.

Many of our clients are actively involved in this area, although only a couple of years ago we were using a slightly different nomenclature – remember “anything as a service”? As such, we plan to explore the theme of clouds over the next few months as it’s sure to remain an interesting – and sometimes confusing topic.

Of course, it helps to define what we mean by a cloud-based service. For our purposes, we think there is a clear boundary to be drawn and it’s illustrated by the case of classical value added services. While the term cloud services is often used to refer to the storage and processing power that is available across internet connections, it has also begun to be used to encompass more traditional hosted services. What was once Centrex has become IP Centrex, then Voice as a Service and now it’s another cloud service. It’s the same with many other hosted solutions – Fax and Conferencing are just two examples. Are all value added services suddenly cloud services? Well yes and no. It depends on where you draw the line.

We think the line is the boundary of the telco network. As soon as that is broken and services interact via IP, then we may more accurately term the application a cloud service. Of course, that’s an arbitrary judgement, but it seems reasonable for now. Simple text messaging may live in the network, but it’s not generally an IP service, although of course it will be one day. For now, in our taxonomy, let’s leave it as a classical VAS. And, it really is a telco service, as classical messaging platforms don’t typically interact with things that live outside of telco networks. But, combine messaging with IM, group chat capabilities, and a network-based address book and you definitely have a cloud-based communications service. In fact, you have something that sounds a lot like RCS!

So, it seems that many traditional, telco VAS offers are evolving towards what we might today generically term cloud-based services. This is interesting, as it strongly suggests a nexus between the traditional (telco) service offer and the non-traditional, exclusively cloud-based offer from the OTT community, which is a happy coincidence, as we will be speaking on a panel on this topic at the IMS World Forum in April. But more of that anon. We think that there is a significant opportunity for telcos to offer capabilities to complement capabilities that exist in the non-telco cloud and vice versa and we will explore this in more detail next time.

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