The three stages of acceptance for carriers in the cloud

Carriers have some major issues when it comes to mental inertia.

They always put themselves at the centre of the universe and, especially in enterprise markets, they tend to be fixated on infrastructure rather than the applications i.e. the things that actually matter. This is a trait they share with their target customers, product-minded IT departments.

Some providers have tried buying clouds, some building, some just investing, and amongst the analysts there’s been plenty of talk about the broker model. However, the jury is still out on whether carriers can indeed find a suitable and profitable role in the new cloud world order.

I believe that if carriers can find enduring success it will depend on the acceptance of three basic, related truths.

1) Accept the commoditisation of IT

Throughout history all infrastructural technologies, from railways, to electricity, to telephony, have undergone the same process of transition from initial innovation, to product, through to commodity and utility provision.

Cloud computing is the latest phase in the relentless commoditisation of IT infrastructure. This is not news, but unfortunately the message is still not getting through to a telco industry steeped in dogma.

It’s important to keep in mind that as infrastructure becomes an inexpensive commodity utility service, all value shifts from hardware to software.

“Enterprise grade” is no longer synonymous with “the best”. From now on, whenever you read this in the context of hardware, simply replace it with “Suitable for Legacy/Unreliable Software“. That will help you to keep things in perspective.

If you’re actually trying to build cloud infrastructure, remember this: Using expensive purpose-built enterprise hardware ignores the trend of commoditisation and creates only a competitive disadvantage. When infrastructure becomes a commodity utility, you need to shift your focus onto software.

2) Accept that every conversation has to start with software.

It amazes me how almost every IT sales conversations starts with infrastructure, considering it has no inherent value. The applications that serve the business might get considered as an afterthought, if they’re lucky.

Developers who are clued-up are writing cloud applications today that surpasses the resilience and scalability that was previously achieved in hardware. Your enterprise grade infrastructure has no meaning here. Carriers will need to work out where the customer is on the application journey and make sure they understand it.

Ultimately success in cloud will depend on acquiring something that has so far eluded carriers; an ability to operate with a software-oriented mindset.

3) Accept that the customer is changing

Business Internet access is now fit for purpose in most mainstream applications. Meanwhile public commodity cloud has demolished barriers to entry for greenfield software development.

This has created an entirely new service-centric value network that is beginning to dismantle the product-centric world of Enterprise IT departments and the IT incumbents that serve them.

It’s common knowledge that developers everywhere are bypassing IT to get the resources they need from public cloud. Meanwhile the business users can now access better and faster applications and services outside the organisation, than from their internal IT dept.

Most productivity gains are coming from outside the business and this is not sustainable for Enterprise IT.  A strategy which targets only the traditional value chain or “stack” of Enterprise IT is akin to moving into a house that is scheduled for demolition.

Service providers still regard the IT dept as their sole customer. When the IT dept’s own customers (i.e the business) starts to look elsewhere, changing procurement patterns, carriers need to think about what the implications are for them.