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Telco names Cloud as Megatrend in Telco industry

Posted on Thursday, December 03, 2009 | 3 Comments

Optus CEO, Paul O’Sullivan, has named Cloud as one of the four Megatrends in the telecommunications industry.

The statement came during a speech to members and guests at the Committee for the Economic Development of Australia (CEDA) CEO Vision Series on the 1st of December. The full text of the speech is available.

The four megatrends listed were:

  1. Explosion in bandwidth. Example was given in Optus, where mobile device speed is now 20 times faster than in 2005 and where in the last 2 years backhaul capacity has increased 6 fold.
  2. The increasing processing power of handheld or smart devices and the associated revolution in how information is presented on touch screens.
  3. Government policy around the world focussing on upgrading national fixed line networks to create 21st century high speed broadband highways. Already Sweden, Finland, Japan, Korea, the Netherlands, Singapore and New Zealand have committed to drive NBN rollouts. NBN's can take people from their current 12MBPS to 100MBPS and ultimately 1GBPS.
  4. What the IT industry has christened as "The Cloud". The previous 3 megatrends combine to drive something that "is shifting the whole approach to delivering communications This exponential explosion in bandwidth allied with much smarter devices, means that we will all be able to access intelligent computer applications hosted centrally – in large data centres - wherever we are."
I think it's significant for Cloud, under whatever definition, to be listed as an outcome of the proceeding three megatrends. These are not statements by some nutty blogger, or ideas about interesting shifts in IT, this is the CEO of a major carrier listing "megatrends". I suspect "megatrends" are not thought of lightly and thrown around by CEOs without good reason and analysis (well lets hope not).

Some take away items on this are:
  • The network is a key element. My definition of Cloud as "Elastic Network Services" highlights that and over the last 12 months the 3 pillars have held up very well. Its right for Network, in all its forms (Private, Internet and Mobile) to be a key element.
  • The Mobile space is something to keep an eye on. Whenever I present on Cloud I always mention mobile access as part of the network access as a long term future element. My example is my sixteen year old son who would inject his iPhone into his DNA if possible. When he enters the work force in 5 years time he is going to demand to use mobile technology as his access device to personal and corporate services at the same time. In 5 years time the processing power and bandwidth available on a mobile device will be more than the branch office worker at a desktop computer had just five years ago.
  • VMware may just be onto something with their whole mobile virtualisation vision with MVP. Most people I speak to on MVP just don't get it, but I think its because they are not looking far enough ahead. We are after all talking about the three to five years here. When you take the elements I have been describing and the "megatrend" of mobile device capabilities MVP has real legs. If you want to see the incubator of this look at the Netbook market.
The last word is probably best taken from the speech, where on Cloud O'Sullivan stated.
The impact of [Cloud] will exceed what the creation of the mobile phone did for us.
Some food for thought.


P.S. This is worth a disclaimer that I do work in the Cloud space and that the company I work for is a wholly owned subsidiary of Optus. Of course my access to Paul O'Sullivan (POS) and access to what he thinks really goes no further than being able to look him up on the internal staff directory. I also bet he does not read my blog. I read this on the Internet just like everyone else.


  1. Anonymous12:11 am


    I will comment anon. I am sure that will not detract from my comments.

    Mobile device speed and access may have increased exponentially over the years, but that is primarily due to the demand from mobile handsets for that bandwith. The introduction of mobile handsets that use more Internet bandwidth have driven that growth, not the providers capacity to accomodate that growth. A great example is the US where Internet attached devices that have exclusive access to a particular provider have bought that network to its knees. The capability of carriers to meet that requirement has been proven to be lacking.

    This leads on to [cloud]. As much as vendors are ready for [cloud], carriers (especially in AU) are in no way ready for it.

    What is [cloud]? It is a rehashed version of ASP which failed so dismally at the end of 90's? Is it co-location of services which is now being in-sourced because it failed so dismally? It is simply hosting of services which failed so dismally and is now the bastion of people who want to host simple web services?

    Where is the econmomic driver for organisations to take up what is effectively a "hosting provider" that provides no value add for storing their applications and data, and provides no Serivce Levels on the the protection and storage of that data?

    [Cloud] is a hard sell. Unless there is more of a sell than just a hosted service, I can see this sort of stuff just going the way of ASP.

  2. Hey Anon, thanks for commenting.

    Certainly agree on the fact that is the mobile handsets which are pushing the bandwidth rather than the other way around. I don't think you will find many who will argue with that.

    On the Cloud being just a further failed attempt at the failed ASP model, umm. There are some significant differences. You state no Service Levels, but that is not always the case, you state no value add, but that is not always the case. Cloud is certainly more than the "host[ing] of simple web services".


  3. Anonymous3:37 am


    It's a bit late on the reply - apologies.

    Regardless of the handset issue which face carries all over the world, there is still the fundamental unanswered question of what [cloud] really is. I note that you didn't answer that from a tecnological or strategic point of view in your answer.

    There are proponents of [cloud] and its benefits, but there are very few (or none) that have actually lucidated about what it is, its purpose, and where it fits into the IT ecosystem.

    There has to be a difference between a hosted server sitting in a datacenter (whether it be virtualised or not) and an "office in the cloud" where the user experience is abstracted into an environment where what they experience with in-sourced technology affords them more than the [cloud] infrastructure meets or exceeds that experience.

    As for value add, most [cloud] offerings don't seem to meet any. To be honest, most organizations that I speak to do not understand what possible value add that [cloud] has over their current in-sourced models, in terms of cost and performance. Why would I sacrifice a 1Gbps network that I have amortized over 3 years to buy bandwidth I don't need to access [cloud] infrastructure I don't want? It's a simple case of economics.

    Then comes SLA. If an orgnaization was to move to a [cloud] model how do I measure SLA? To calculate SLA's you need to take into account an enormous number of things - network availability, equipment availability, compliance requirements, reporting and so on. For most providers of [cloud] infrastructure this becomes a burden especially when the availability of customer data becomes an commercial issue. Where do the actuaries come into the picture to determine the commercial risk for the loss of customer data? That risk originally lived with the customer, it now lives in the [cloud].

    Security of customer data? I won't even go there.

    So, [cloud]? Good for SMB. Appalling risk profiles for larger customers.

    Thus, my allegory towards ASP. Cloud? Hosted web servers. It's not good for anything else.


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