What “The Real-Time Cloud” means to Telcos and Enterprises

There’s an emerging category called the “Real-Time Cloud.”  Put simply it’s a high-performance cloud infrastructure that supports real-time services and APIs for any internet connected device.  The change that is about to make this category become very interesting is the rapid adoption of LTE-based devices in many markets, for example in South Korea LTE devices are growing at 141% per month, and will hit 10M subscriptions by the end of 2012.  LTE means broadband internet access is finally ubiquitous, rather than being available in islands of WiFi at home and in the office, with the sub-broadband congested 3G network used only where necessary in between.  The real-time cloud means these devices become practical extensions for all enterprise services.  To deliver services to all internet connected devices requires both the enterprise and/or the telco to adopt a real-time cloud and use technologies such as HTML5, Node.js, and NoSQL data stores.  In this article I’m using the recently announced partnership between Joyent and Voxeo Labs to exemplify what the real-time cloud means.

The real-time cloud is different from the web-centric clouds we know today.  In essence it is:

  • Mobile and web centric, supporting any internet connected device;
  • Real-time performance through application virtualization, for example Joyent‘s SmartOS avoids the waste in server virtualization;
  • Supports real-time APIs and frameworks, here the integration of Voxeo Labs’ cloud communication frameworks and APIs with say the operator’s IMS infrastructure saves back haul capacity, removes round trip delay with web APIs, and finally gets some service innovation happening on the core service; and
  • Supports simple development for fast, scalable, event-driven network applications that run across distributed devices.

The focus of this article is to examine what the real-time cloud means to enterprises and telcos.  Put simply a telco can offer a real-time cloud to its enterprise customers to support all their traditional platforms and services as well as new communication enabled business processes, thus retaining communication services revenues and expanding IT related revenues, a $1.4T market as discussed below.

For Telcos the real-time cloud is both a threat and opportunity.  The principle threat is enterprise services can increasingly go Over The Top, as discussed in this previous article. Globally enterprises will spend $650 billion in 2012 across all telecom services.  This doesn’t include enterprise hardware, software and professional services; include that and we’re closer to $1.4 trillion across Information and Communications Technology (ICT).  There’s much revenue to be made in disrupting the enterprise ICT market, as all enterprises large and small are seeking ways to lower the cost of what they spend on ICT while improving performance.  The real-time cloud enables the convergence of cloud based business processes and cloud communication services: prices drop for traditionally expensive items like call centers and IVRs; functions or customizations that were prohibitively expensive become a matter of point and click to configure; business processes become slicker; advertising campaigns become more measurable, effective and integrated with the rest of the business for better lead capture; and real-time communications becomes integrated into your website, enterprise applications and business processes rather than trapped in an expensive silo.

Operators can and are harnessing the capabilities of the real-time cloud.  For example, Telefonica are partnering with Joyent and resell Joyent‘s real-time cloud services; and its leadership in Node.js to make it easy for enterprises to build and migrate applications into the Telefonica cloud.  Telefonica are taking a multi-channel model, using their local presence and extensive SI (System Integrator) and VAR (Value Added Reseller) networks to drive cloud adoption in their countries of operation.  They are also bundling their services with other OTT services to meet specific customer needs.  The keys to Telefonica’s success are a pragmatic strategy of partnering with the technology leaders, and focusing on using the local market leadership to embed Telefonica’s services and network into enterprises.  Similarly Deutsche Telekom is partnering with Voxeo Labs and through its T-Systems IT services arm delivers a range of real-time API enabled business solutions using for example the Telekom Tropo API.

For the enterprise the opportunities range from real-time analytics, communication enabled business processes in the cloud, integration of web and BYOD (Bring Your Own Device) for enterprise apps, with all the usual cloud benefits of pay for what you use, disruptive pricing, removing integration costs, an integrated security framework, and do it yourself.   As a simple example, many enterprises are implementing an enterprise social network.  Think of it like a mini version of Linkedin, where you can see news, profiles, questions, and search for relevant expertise with your organization.  With the real-time cloud, voice, video and all devices are connected through the enterprise social network.  Say a customer integration project is having problems with a particular legacy platform; the project manager can search the enterprise’s social network to see if anyone else in the company has worked on that particular legacy platform.  If they find such a person they could message her to see if she is available to talk, and then click to call. As the call progresses, they could message and then conference in the project’s architect to discuss and solve the problem–all through the CEBP tool, to whatever device the participants in that communication prefer, be it a browser, IP phone, desk phone, mobile device, or VoIP client.

In our increasingly software defined world, technology change continues to accelerate.  Creating both opportunity and disruption.  The Real-Time Cloud is the next step in the evolution of the internet, and presents significant opportunities and disruptions for enterprises and telcos alike.  The key is to understand its impact, identify the immediate opportunities, and implement a flexible partner based approach to get to market fast and adapt as telcos and enterprises understand what real-time cloud-enabled ICT services deliver in practice.  For an operator its a real time cloud platform with pre-integrated real-time APIs integrated with their IMS and legacy networks that can be used out of the box. Rather than today’s starting point of OpenStack that is web-optimized and then realizing much work is required to meet the needs of real-time ICT services.  Misquoting Sir Isaac Newton, ‘Stand on the shoulders of giants, you see further!’