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Caution: One Cloud may hide another. Don't be distracted by IaaS, SaaS is where it's at.

RichardArthur| January 24, 2012 - last edited January 26, 2012
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The cloud computing opportunity that service providers have today goes far beyond Infrastructure as a Service that (IaaS) offers that have already been launched globally.     Gartner estimates that business process services represent $71.1 billion vs only $31 billion for IaaS.      According to “marketsandmarkets.com” SaaS is 73% of the cloud market – including players such as Google Mail, Yahoo Mail, Adobe Web connect and, presumably large enterprise players such as salesforce.

 

CautionOneCloudMayHideAnother.png

 

 

WHY SAAS

 

This is because business process services and SaaS bring much higher value to organizations then infrastructure as a service.   Compare for example the size of the IT Hardware market vs IT software and services today:  according to Forrester that ratio is 40/60.  Furthermore, imagine I am a telecom company that brings the line to the customer but does not provide the voice or data service?  (Yes these exist, but that’s a different discussion).    The point is that the value is in the toilet not the plumbing and that the higher value opportunity is available now for service providers and not just the SaaS providers themselves.

 

THE SERVICE PROVIDER OPPORTUNITY

 

The reason is that as the number of cloud services available to an organization grow, so does the complexity of managing those relationships.  So that, while today, specialist cloud vendors like Sales Force and Amazon, plus HP of course, can sell, for example, CRM and Virtual machines directly to organizations, once an organization has: CRM, Virtual Machines, Storage, E-mail, PC Security, platform services, collaboration and communications as a service the vendor relationships become complex to manage.  More importantly, the IT department or the company itself cannot allow the free for all that would ensue if each business line begins to procure its own cloud services (sometimes just with a couple of clicks and a credit card).  Procurement, security, compliance as well as performance and SLA requirements for business applications and processes could be put at risk.

 

THE CLOUD SERVICE BROKER

 

Thus intermediaries are required to “broker” the cloud services.  These brokers can provide the ability to discover, subscribe to, manage, use and ultimately, be billed for, cloud services.   Larger companies may decide to broker their own services for internal users or aggregate different broker’s offers, but SMBs will not accept the overheads inherent in that and will look to a service provider to do that for them.

 

Research from Gartner and Forrester has characterized the Cloud Service Broker functions, elsewhere characterized as an “Aggregation platform” and cloud service marketplace.     Forrester, for example, categorizes a cloud service broker as implementing basic cloud principles (standardization, self-serve, elastic, pay per use), as well as aggregation of service combinations, workload management, and dynamic sourcing. (Source: Forrester “Cloud Broker — A New Business Model Paradigm”; Sept 2011)     HP and other companies offer cloud service broker capability, from our side you can find out more at:  www.hp.com/go/cloudsystemsp.  

 

CONCLUSION

 

In conclusion, there is a massive opportunity for service providers of all kinds, both communications (telecom) and managed service providers (ie hosting, resellers etc), to broker cloud services for their customers.     So the advice is not to ignore the IaaS train, but to keep your eye on the bigger SaaS and business process as a service opportunity behind it.

 

Richard Arthur manages the CloudSystem Service Provider Program at HP

Tags: Cloud| Cloud Services| IaaS| SaaS| Service Provider View All (5)
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About the Author
  • Alain Decartes has over three decades experience working in the Telecommunication and IT Sector. Here he has had roles in a variety of sectors including the Value Added Service, Cloud Services and Apps Store market worldwide. He has strong skills in international sales, marketing and business development. Alain is HP Software’s worldwide Industry Solution Marketing Lead for the Communications, Media and Entertainment (CME) industry and sub-segments. In the past, Alain has held senior roles with Unisys, Comverse and Prodata Belgium. He is a popular speaker, moderator or chair at worldwide industry conferences. Alain has been a Board member at the International Association for Enhanced Voice Services. He has also won a number of Industry accolades including The Messaging Industry Association Special Recognition Award. Alain received a Civil Engineer in Telecommunications degree from the Faculté Polytechnique de Mons in Belgium.
  • Sigge Andreasson is Worldwide Solutions Marketing Manager for OSS Transformation, CMS at HP. Sigge has more than 25 years of experience in the telecom and software industries, and has held a number of different positions during his career with HP, spanning telecom engineering, pre-sales and marketing. Sigge holds a Master of Science degree in Electrical Engineering from Chalmers University of Technology, Sweden.
  • Julia Mason-Ochinero is WW CME Marketing Lead, HP Enterprise Marketing. In this role, Julia is responsible for driving dialog with CSPs on how they can transition to sustainable, profitable business models and enter into co-opetition with over-the-top (OTT) content providers who are changing this industry’s landscape. She joined HP in 2010 from Accel Partners (where she worked as a consultant.) Prior to Accel, Julia held marketing leadership positions with companies including Adobe, Nuance, OpenWave, Novell, Nuance Communications and RealNetworks. She began her career in Chicago working with organizations including AT Kearney, Andersen Consulting and Ameritech. She currently resides in Silicon Valley.
  • Marco has over 15 years’ experience working on strategy and innovation projects for major clients in the Telecom and Media Industries. He helps clients to improve their business performance through the adoption of strategically-driven technology solutions.
  • Marie-Sophie Masselot is bringing her thought leadership in business transformation in the telecom arena, thanks to her latest role as the marketing lead for the HP Solution Consulting Services practice worldwide. She is coming with a technical background as computer sciences engineer, having held different positions from software development through supply chain or sales support in telecom companies.
  • Marie-Paule Odini is a seasoned HP executive, bring over 25 years of telecom experience. She has deep expertise in both the networking and IT environments, bridging voice and data. Marie-Paule is the HP CTO for Europe, responsible for the Communication and Media Solution organization, focused on customer innovation and emerging trends. She leads the technology discussions for M2M, Analytics and Cloud. She seats on ETSI and other standard bodies. She is a frequent industry speaker and editor in professional magazines, blogs on HP Telecom IQ and tweets on CMS twitter account. Marie-Paule’s prior responsibilities include managing HP’s worldwide VoIP program, HP’s wireless LAN program, and HP’s Service Delivery program. Since joining HP in 1987, she has held positions in technical consulting, sales development and marketing in Europe and in the Americas. Those roles have focused on strategic and operational responsibility for Networking, IT and operations. Marie-Paule holds a master’s degree in Electrical Engineering from Utah State University and business education from INSEAD, Paris. Prior to joining HP, Marie-Paule spent five years with France-Telecom/Orange research and development labs, defining architecture and value-added services launch for corporate customers. She also worked with standard bodies and industry forums at that time. She enjoys skiing and outdoors in general.
  • Oded Ringer overlooks HP's worldwide marketing strategy for Actionable Customer Intelligence (ACI) solutions. With many years in the Telecom industry, at companies like Alcatel-Lucent and TTI-Telecom, Oded focuses on Go-To-Market strategies bringing together Products, Business, Operations, Sales and Marketing.
  • Richard Arthur has enjoyed the last two decades of the wild ride that has been the communications industry since deregulation. He is currently leading the Services and Solutions Marketing team in HP’s Communication and Media Solutions business unit. This role embraces transformative telecom solutions including telecom cloud services, outsourcing, solution lifecycle services, OSS/BSS and network platforms. Richard is also managing the CloudSystem Service Provider Program in HP.
  • Grace has initiated and implemented in last decade the first support contracts for large Telecom operators like France Telecom, Vodafone, BT...Today she is in charge of developping support services which are maturing with a shift from reactive break/fix models to more-proactive and enhanced offerings that add business value.
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