Telcos Aggressively Entering The IaaS Market In Asia Pacific

Demand for infrastructure-as-a-service (IaaS) continues to grow strongly in Asia Pacific. In fact, our Forrsights Budgets and Priorities Tracker Survey, Q2 2012 found that 43% of Asia Pacific organizations had prioritized IaaS as an IT strategy, up from 33% in 2011.

This presents an opportunity for both established cloud service providers like Amazon Web Services (AWS) and Rackspace and new entrants such as telcos to offer IaaS to enterprises in the region.

While telcos have not typically been an obvious choice for enterprises considering IaaS in the region, they have introduced capabilities over the past 12 months that compete head-on with AWS and Rackspace — from entry-level “rent a virtual server” offerings to fully hosted and managed IaaS. As outlined in my “Telcos Are Lining Up Broad IaaS Offerings For Asia Pacific Enterprises” report, players in this space include AT&T, BT, NTT Communications, Orange Business Services (OBS), SingTel, Tata Communications, Telstra, and Verizon.

What does this mean for sourcing and vendor management professionals?

  • Carrier-grade networks can deliver improved redundancy and security. To compete with the likes of AWS and Google and draw customers, telcos have smartly coupled IaaS with their own carrier-grade networks in Asia. Telcos’ clear advantage is that they can offer all levels of IaaS, from entry-level offerings like Tata Communications’ InstaCompute and NTT Communications’ Cloudn to higher-end ones like NTT Communications’ Enterprise Cloud and Verizon’s offering, and back up these solutions with existing infrastructure that includes well-defined nodes, in-country data centers, and network redundancy and security.
  • Telcos understand local regulations. The regional and global telcos discussed in my report have all been present in Asia for many years; some, like SingTel, have recently won government cloud contracts. Telcos understand both Asia’s tightly regulated industries and global regulatory environments. As such, they can help enterprises navigate complex compliance and risk regulations on multiple levels. NTT Communications, for example, holds a local certification for providing services to the Japanese financial sector.

Telcos, while facing challenges in expanding beyond their home markets (see the “IT Industry Disruptions Fuel Renewed Asia Pacific Market Growth” report), should make the sourcing list for IaaS in the region, if they haven’t already. Would you agree?