Evaluating The Impact of Cloud Computing In The Telecommunications World Mobile Cloud Computing Asia Singapore July 14 – 15, 2010 1 Ahmad Nadeem Syed [email protected]
Jan 16, 2015
Evaluating The Impact of Cloud Computing In The Telecommunications
World
Mobile Cloud Computing Asia
Singapore
July 14 – 15, 2010
1
Ahmad Nadeem Syed
The Discussion Points
2
A Brief overview of Cloud Computing
The Broadband Divide
Are the Telcos Natural Choice for Cloud Computing?
Conclusion
Cloud Computing – A Confusion or Reality?
3
There are diversified opinions about definition of cloud computing:
• Larry Ellision, Oracle’s CEO does’t understand “what we would do differently in the light of Cloud Computing other than change the wordings of some of our ads”
• Richard Stallman, of Free Software Foundation founder thinks “It’s a stupidity it’s a marketing hype campaign.”
• Andy Isherwood, HP’s Vice President of European Software says“ Two people say the same thing about it [cloud]. There are multiple definitions out there of “the cloud”
A Broad Definition
4
Cloud computing is a way of computing, via the
Internet, that broadly shares computer resources instead of using software or storage on a local PC
Main Categories of Cloud Computing
5
Infrastructure as a Service
PaaS
Platform as a ServiceSoftware as a Service
SaaS"Software as a Service (SaaS)" deliver software as service over the Internet,
eliminating the need to install and run the application on the customer's own computers and simplifying maintenance and support.
6
Googlee-mail servicecalendar, document editorSpreadsheet Etc.
Salesforce.comCRM software on-demand Sales cloud: containing accounts, contacts, leads, quotes, etc Service cloud. contains a customer portal,
knowledge base, analytics, etc.
Zohoe-mail service, document editor, spreadsheetpresentation toolInvoicingreporting, applicant tracking.
PaaS
"Platform as a Service (PaaS)" deliver a computing platform and/or solution stack as a service, often consuming cloud infrastructure and
sustaining cloud applications. It facilitates deployment of applications without the cost and complexity of buying and managing the underlying
hardware and software layers
7
Googlea framework to allow building software in Python or Java that is automatically distributed and scaled as necessary on the cloud.
MicrosoftAzure platform, provides Visual Studio programmers the ability to build software for the cloud
- the operating system as an online service- SQL Azure, a fully relational cloud database solution.
Force.comForce.com is a development platform that allows users to build business applications in the cloud.
IaaS
Infrastructure :Cloud infrastructure services or "Infrastructure as a Service (IaaS)" delivers computer infrastructure, typically a platform
virtualization environment, as a service. Rather than purchasing servers, software, data center space or network equipment, clients
instead buy those resources as a fully outsourced service.
8
Amazonwith its Elastic Compute Cloud (EC2). Renting this capacity to others through the internet
Rackspacerenting out space in their racks, providing managed hosting and dedicated servers through Inernet
GoGridvirtual machines to be rented by the hour, but they also offer dedicated servers for specific tasks that tend to be slow on virtual machines, such as databases.
Cloud Computing – Drivers and Enabling Factors
Customer needs● Capex savings - SMEs being the main target market● Any where any time - Individual’s requirement
Prerequisites● Readiness for use of IT applications● Availability of high speed Internet● Affordability from Individual’s perspective● Education
Role of Telcos● Service provider● Access provider
9
From Digital Divide to Broadband Divide
Cloud computing penetration is dependent upon level of Broadband penetration in a given market
Market Segmentation
● Developed markets
● Developing (Emerging) markets
● Under developed markets
Current Market Status
● Use of Internet based services is growing in developedmarkets at high rate
● There is very limited market for such services in developing /underdeveloped economies
10
From Digital Divide to Broadband DivideExcerpts from UNCTAD Report
● The digital divide between developed and developingeconomies is wide and growing in terms of Internetbroadband access
● There is a huge gap in terms of broadband speed within the two Developed and Underdeveloped market segments
● A person in developed country is on average at least 200times more likely to enjoy high-speed access to the internet than someone in a least developed country
● Broadband Price Divide: The cost of using fixed broadband is highest in low income countries. Average fixed broadband price at purchasing power parity in 2008 was:- Developed countries $ 28- Developing countries $ 289
11Source: UNCTAD Information Economy Report 2009
Underdeveloped Countries are Bandwidth Starved – UNCTAD Report Excerpts
● Despite positive Internet developments in many countries, its use is progressing slowly in certain regions.
● The developing countries are facing insufficient demand due to
- high prices
- inadequate infrastructure
● The lack of demand contributes to
- low levels of investment and
- high prices due to high cost of international connectivity
● Another barrier to greater Internet take-up is
- low levels of education
- Limited supply of web content in local languages
12Source: UNCTAD Information Economy Report 2009
There is Direct co-relationship Between Level of Purchasing Power, Education and Internet Usage
Purchasing Power
Internet Usage
Education
13
Purchasing Power & Education
Main Drivers of Internet Usage
14
-
20
40
60
80
100
93 99 99 99 99
71 61 50 48
36 29
%
Literacy
-
10.0
20.0
30.0
40.0
50.0
60.0 50.3 46.4
38.8 35.2 34.1
6.0 3.1 2.6 1.6 0.9 0.7
US
$(0
00
) /
Cap
ita
(PP
P)
GDP/Capita (PPP)
-
50,000
100,000
150,000
200,000
250,000
300,000
217,355 234,621
243,898 282,145 274,724
9,442 4,469 950 312 5 42 No
. of
Sub
s (0
00
)
Broadband Subs / 1 Billion Population
Countries with Higher Purchasing Power and Higher literacy have higher Internet usage
Source: ITU ICT Indicators and CIA fact sheet
Market Share of Economies
15
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
>25000 10001 -25000
5001 -10000
1001 -5000
<1000 NA
96.42%
2.56% 0.28% 0.75% 0.00% 0.00%
% D
SL s
ub
s
GDP $ Per Capita (PPP)
GDP $ per Capita/DSL Subs
26% 41% 4% .10%14%14%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
>25000 10001 -25000
5001 -10000
1001 -5000
<1000 NA
24.78%22.94%
24.18%
27.21%
0.86% 0.03%
% M
obile
Subs
GDP Per Capita (PPP)Sources: CIA Fact sheet & ITU CIT indicators
GDP per Capita /Mobile Phone Subs
Mobile Penetration
56% 14% 20%40%
● Countries Having GDP/Capita over $ 25 K have 25% of mobile Subs●mobile phone market there is saturated●Countries having GDP/Capita $ 5 – 10 K have 51% of mobile Subs●The mobile phone penetration there is around 50% there
● Countries Having GDP/Capita over $ 25 K have 96% of DSL subs ●Such countries have only 14% of the world population●Countries having GDP/Capita less than $25 K have only 4% of the DSL Subs● Such countries constitute about 86% of the world population
Telcos and Cloud Computing
16
Telco’s – Apparently Natural Choice?
● Infrastructure available for SMEs (e.g. they are experienced in managing massive amounts of data having own data centers)
● Own subscriber base
● Opportunity for additional revenue stream by
- Charging end users for a given level of service quality
- Charging cloud-based providers
17
Telco’s – Apparently Natural Choice?
● The Telco’s success in cloud computing as competitor to IT Service providers depends upon
- Right market conditions
- SME’s preparedness
● The pre-requisites for success of mobile cloud computing are
- High speed internet (3G) availability
- Affordability
- Time to cost relationship
18
Possible Suite of IT Services by Telcos
19
0% 20% 40% 60% 80% 100%
Cloud Services IaaS , SaaS
Deploying and managing enterprise …
IT infrastructure solutions , virtulization
Client and desktop management support
Hosting, web, infrastructure and colobration …
Design, management and maintain …
Network and point security
Network services, consulting and integration
Connectivity (voice and data needs)
Telco’s Trump card
Traditional weakness in IT
Key datacenter battleground
Traditional strengths
Core Business
Source: IDC Telecom Perception Survey April 2010
Telco’s Preparedness - Varying Opinions
● Leading global and regional telcos have developed and
launched their own cloud computing services, including
infrastructure-as-a-service (IaaS) - (Ovum)
● Telco’s visibility in the market is very low . Only a very small
number of telcos have so far shown commitment in this
market according to some analysts.
● Sales uptake for IaaS is likely to be slow for at least the next
two or three years – (Ovum)
● It may take two or three years for telcos to establish credibility
in this market, so early market entry will have its benefits in
the longer term
20
Some Forecasts about Mobile Cloud Computing
● ABI Research forecasts that mobile cloud computing
subscribers be over 998 million in 2014
● Mark Beccue says : “By 2014, mobile cloud computing will
become the leading mobile application development and
deployment strategy, displacing today’s native and
downloadable mobile applications
● Mobile phones will overtake PCs as the most common Web
access device worldwide by 2013
● Ovum research indicates that cloud computing is currently
low on the agenda of most CIOs/IT managers, This means that
sales uptake for IaaS is likely to be slow for at least the next
two or three years”21
Issues for Telcos as Cloud Computing Service Provider
● Telcos will face all the following issues which other cloud computing
service providers could be facing:
- Security standards
- Reliability - Outage & Performance standards
- Portability
In Addition● Competition both from Mobile operators and cloud computing
service providers
● The cost for telcos to jump into cloud computing could be significant
as they need to upgrade their operational networks and data centres
● Telecom equipment is currently connectivity oriented and vendors
are lagging behind in the race to drive cloud-enabling technology for
telcos
● High cost of bandwidth - Presumable cost savings may be off-set by
high cost of bandwidth
22
Issues for Mobile Cloud Computing
● Outage - 3G coverage is non-existent and spotty even in
most developed markets
● The networks are generally loaded
● The bandwidth access could be insufficient
● Loss of control – (Multiple points of failures)
● Competition from peer telcos and IT service providers
(Such as email which remains the largest application)
23
Issues for Mobile Cloud Computing
● Issues in developing/underdeveloped economies
- Lack of speedy mobile Internet access
- Affordability – Access + Cost of smart phone
- Availability of cheap alternates
● Handset Impediments
- Smart phone high cost
- Battery life
- Keyboard limitation
- Small screen vs large screen
24
Some Facts About Two Markets
25
Description Developed Economies
Developing/Underdeveloped economies
Voice Market Saturated Lot to cover
Overall ARPU $ 40 - $ 50 As low as $ 2.5
Data ARPU $ 15 in US Negligible
Data Share 10% – 20% Less than 1%
Internet & Internet based Application Usage High Low
Major objective New Avenues Struggle for survival
Time lag for data services (say for 3G) Since early2000
8 – 10 years behind
(India, for example has only recently auctioned 3G licenses, Pakistan is yet to follow)
Source: Number from Cheetan Sharma Consulting
Conclusion
● Cloud computing by itself is in infancy stage
● Sustainability of success of Cloud Computing is yet to be proven even in developed economies
● Voice is and will remain the prime service both for developed and developing /underdeveloped markets for quite some time
● Developing /underdeveloped markets are not ready yet
● In terms of time for developing/underdeveloped economies
- Digital divide has taken about 10-15 years to narrow
- The broad band divide is already 8-10 years wide
● Level of Broadband penetration will determine fate of Cloud Computing in a given market 26
Ahmad Nadeem Syed
Research Analyst & Regulatory Economist