It has been five years since the launch of Apple iTunes and the world of cloud services has benefited greatly from it. That is not to say that iTunes has been accepted by everyone, but as familiarity with cloud-based apps and micro purchases has increased, so too have the opportunities for business-based cloud services. There are many examples both large and small of cloud service providers offering IT services, applications and business support solutions. Microsoft, Google, Intuit and Amazon are probably the best known. However, there are many others supporting SMBs and enterprises such as Cisco, SoftLayer/IBM, Savvis, Docusign, etc.
Cloud services are taking off because millions of SMBs, SOHOs and entrepreneurs globally find that subscribing to such services provide them with sophisticated capabilities and analytical tools at a low cost with fairly easy to learn and operate user interfaces. This is only possible because the adoption rate of cloud computing has created the necessary demand and revenue growth to support the investments cloud computing service providers need to create and innovate desirable applications and services.
Gartner projected that in 2012 global revenue from cloud services was $110 billion with a CAGR of 17.7 percent from 2011 to 2016. Global revenues are expected to grow from $76 billion in 2010 to $210 billion by 2016. It is this revenue and growth that funds the innovation associated with cloud computing and services. However, this also places a demand upon the service provider to develop reliable applications and engineer robust network infrastructures. Getting a business customer to entrust significant business-critical elements of their operations to a third party is difficult, and it is imperative that they not be disappointed. Amazon and Intuit cloud failures have received significant press. However, recent studies have shown that security, data loss and hardware failures account for the majority of service interruptions, indicating that additional investment in managing and resolving those issues is required. Interestingly, natural disasters, insider fraud and account hijacking were the least most noted reasons for a service interruption.
ANPI, the RLECs and most legacy service providers understand the importance of service availability and clear cut SLAs. However, as new entrants begin offering services, they may not place the same priority on such issues. It is an important differentiator that should be given due consideration.
David Byrd is chief marketing officer and executive vice president of channel sales for
. He previously spent five years as vice president of marketing and sales for Broadvox and before that was vice president of channels and alliances for Eftia and Telcordia.