infoTECH Feature

May 04, 2009

Service Providers Have Cloud Computing Opportunity

By Gary Kim
When asked, “Globally, which three companies do you believe are best positioned to serve your managed IT and communications needs?” the top three responses from survey respondents were AT&T, IBM and Verizon, says Yankee Group (News - Alert) analyst Jennifer Pigg.
 
That's a resounding vote of confidence considering it is firms such as Google, Amazon and Microsoft that get most of the attention in the cloud computing arena.
 
"Our survey of 500 small and medium enterprises in the U.S. yielded similar results," says Pigg. "AT&T and Verizon (News - Alert) placed first and second while Qwest and Sprint placed fifth and sixth."
 
That suggests an important service provider opportunity exists, especially if service providers can leverage the apparent goodwill by providing rock solid reliability and an easy-to-use customer front end.
 
But though the common impression is that cloud-based computing and storage infrastructure "must" be cheaper than in-house solutions, this does not always seem to be the case.
 
"When we asked our survey respondents why some functions were brought back in house, more than two thirds of the survey members responded with one of the following three reasons," says Pigg.
 
About 25 percent of respondents said it actually "proved more expensive to outsource than manage internally." Another 22 percent reported they expected to save money, but found they did not.
 
Also, quality of service was an issue for19 percent of business users who tried a cloud service and then moved those services back in house.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Stefania Viscusi
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