How Service Providers Can Capitalize on the Enterprise Cloud Market

Next Generation Communications Blog

How Service Providers Can Capitalize on the Enterprise Cloud Market

By Beecher Tuttle

With the demand for cloud services expanding rapidly, service providers are in a unique position to exploit new markets and generate new revenue, in addition to benefiting from the significant capital expenditure (CAPEX) and operating expenditure (OPEX) savings associated with a cloud infrastructure.

However, to fully capitalize on this market opportunity, service providers need to develop an accurate sense of current and future market conditions as well as enterprise attitudes and perceptions of the cloud.

In an effort to provide a more granular look at these conditions and attitudes  Alcatel-Lucent (ALU) recently conducted a global study, “Soaring into the Cloud,” involving nearly 4,000 IT decision makers (ITDMs) from medium, large and multi-national companies.

ALU researchers found that 78 percent of companies are currently employing at least one cloud-based application, with organizations in tech, professional services and manufacturing/defense leading the way. Healthcare, government and education enterprises rely less on the cloud, but not by any significant margin.

Looking forward, nearly 45 percent of ITDMs said that they anticipate leveraging more cloud services within the next three years. Finance and insurance companies are expected to be largest adopters.

However, the perception of inferior security still seems to exist with just 34 percent of companies entrusting their mission-critical applications to the cloud.

When looking regionally, India and the U.S. are the biggest adopters of the cloud. France and the U.K., meanwhile, are the two most reluctant nations included in the study.

Areas for Improvement

Although the overall response to the cloud was positive, respondents noted a few areas of concern where improvements are necessary. As the chart below shows, the chief demand is for solutions that offer a higher level of performance, including greater security, response time and end-to-end availability. ITDMs are also looking for solutions that provide improved data security.

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Implications for Service Providers

Researchers discovered that service providers are well positioned to take advantage of the booming enterprise cloud market. Respondents noted that they don't necessarily need to partner with a current leader in cloud technologies, but rather are looking for a trusted provider that can offer secure solutions for mission-critical applications.

More importantly, enterprises acknowledged that they are willing to pay for quality. Carrier-grade solutions were found to be four times more attractive of less robust solutions and capable of producing ten times the revenue.

"To fully capitalize on this opportunity, service providers must provide a cloud solution that can support complex network topologies, offers a bandwidth and latency guarantee, as well as encrypted storage options," says Alcatel-Lucent. "The ideal solution should also enable user-configured redundancy options, and rapid virtual machine instantiation."

Alcatel-Lucent-Lucent’s CloudBand portfolio is comprised of two key elements:

  • The CloudBand Management System, which delivers orchestration and optimization of services between the communications network and the cloud.
  • The CloudBand Node, which provides the computing, storage and networking hardware and associated software to host a wide range of cloud services.

The entire portfolio enables service providers to capitalize on enterprises growing move to cloud-based solutions.

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