Monday, August 29, 2016

AWS, Other Cloud Computing Leaders Best Telcos in U.S. Market

With NTT as the exception that proves the rule, tier-one telcos have not been able to outcompete the application and commerce providers that, oh by the way, have decided to monetize their cloud computing assets.

The “bundled services” strategy Verizon and AT&T attempted, melding cloud services with private internet networks, security, data storage and service guarantees, has failed to gain traction, compared to Amazon Web Services, Microsoft, IBM and Alphabet (Google).

Some would argue that the market changed. Though colocation remains a distinct segment within the broader “data center services” market, the cloud computing market arguably has changed because the original concerns about security have faded.

In substantial part, those buyer perceptions changed because the leading app cloud computing services were able to create security mechanisms strong enough to allay the original fears.

In other words, a buyer would often have closen AWS for cloud computing, unless convinced security was not sufficient. If AWS could prove that fear was unjustified, then it was going to make sense for customers to buy from AWS, rather than other suppliers without AWS moxie.

The other issue is that AWS and other leading cloud computing companies arguably were quicker to build ecosystems around their cloud offers, as well as making it easier for developers to create new features, services and apps in a cloud context.

Some will draw larger conclusions from those developments. Some will say that, once again, tier-one telcos have proven they are not adept at innovating. There is historically much truth to that argument.

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