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European operators outgunned in cloud infrastructure

SMBs are demanding cloud services from their communications providers

European telecom operators risk being sidelined in the global cloud computing market by aggressive North American and Asian operators spending billions on an international presence.

Research from Informa’s Telecom Cloud Monitor reveals that European operators accounted for only seven per cent of the $13.5bn that services providers spent on cloud assets in 2011. North American and Asian operators accounted for 90 per cent, or $12bn of the total.

Camille Mendler, principal analyst at Informa, believes uncertainty around European security and privacy laws, coupled with continuing economic weakness, are responsible for stalling investment. However, the European Commission aims to define a common legal framework for cloud computing in 2012. And European operators are supporting local innovation, with half the cloud services launched in 2011 relying on European cloud technology vendors.

“European operators are being outgunned in cloud infrastructure,” said Mendler, “Although they are working to stimulate local demand, their investment strategy remains cautious.”

“It’s urgent to defuse concerns about cloud computing in Europe to drive market development. European operators are major players in this endeavour with their trusted brands and sales outlets,” Mendler added.

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Informa’s research highlights fundamental differences among the 127 operators worldwide currently selling cloud services. European operators are focusing on launching services at home, while North American operators are acquiring client bases and assets at home and abroad and Asian operators are pursuing a blended strategy of infrastructure investment and service launch nationally and internationally. Meanwhile, Latin American, Middle Eastern and African operators are building up domestic infrastructure and competences.

In 2011, the top five telecom cloud investors were AT&T, Centurylink, NTT, Telstra, Verizon and Windstream. Leading European operators investing in the cloud were Deutsche Telekom, Orange, Portugal Telecom and Telefónica.


One comment

  1. Robert Cathey 18/01/2012 @ 8:58 pm

    James:

    Spot on. Would love to introduce you to the guys at Cloudscaling, who are working on this exact problem with several large carriers.

    Robert

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