Cloud Computing Comes to Telecommunications

Cloud computing came about when Internet businesses in their development stage were trying to handle increasing TCO, large-scale resource deployment, large volumes of business data, and fast-changing business models. Cloud computing is now gradually being introduced into the telecommunications industry as demand for mobile Internet services is taking off.

The rapid development of cloud computing technologies is accelerating the integration of telecommunications and the Internet. This integration involves telecom service networks evolving towards all-IP broadband as well as integrating technology and operation mode or changing to an innovative operation mode. Telecommunications and the Internet are increasingly overlapping each other.

By adopting Internet cloud computing, the telecommunications industry can organize and apply network storage, computing, and software service resources. Cloud computing has become a new trend in telecommunications development and has completely overturned the industry’s traditional resource provision and user application modes. It is likely to bring about fundamental reforms as the telecommunications and IT industries are drawn together.

For example, a telecom operator can change the traditional vertically-organized independent platform construction approach to construct a safe resource pool that has computing, storage, network, and operation management capabilities. Within the resource pool, the operator can deploy multiple service platforms on demand and enable resource sharing, on-demand resource allocation, green energy savings, high reliability, high scalability, and lower CAPEX and OPEX.

Operators can develop new services in an infrastructure as a service (IaaS) resource pool, including cloud-based IDC services, virtual desktop services, and cloud-based network disk services. The telecom operator provides Amazon-type EC2 or S3 services, dynamic rental computing, and storage, network, and office desktop capabilities to provide a range of innovative service mechanisms. An operator can let customers use services according to their demands, pay according to their applications, and get higher quality services for a lower tariff.

An operator can also construct a platform as a service (PaaS) on the IaaS resource pool to provide an open environment with standard provision capabilities and interfaces. Internet service capabilities can be mixed with telecom service capabilities such as IM and M2M.

New services are then generated, providing an SMS cloud, MMS cloud, WAP cloud, and/or application store cloud to increase the openness and effectiveness of the PaaS layer in the IaaS resource pool. With cooperation from third party developers, operators can explore a new business mode using cloud. They can provide plentiful SaaS cloud services such as storage networking solutions (SNS) and e-trip services, and compete in the wider Internet market as well.

Cloud computing brings new opportunities and challenges to operators. The cloud ecosystem includes terminals, channel and cloud. Most operators offer customized terminals―sometimes as many as half of their terminals are customized—as well as tablets and netbooks. PCs aside, this means that operators can control more than half the terminals on their network. Because all access and core networks are basically controlled by operators, the network channels are firmly under the control of operators. Cloud services, however, are controlled by Internet service providers (ISPs). Operators can only provide fundamental services to enable the cloud user to access services (including equipment rooms and bandwidth), but they want to profit from a much wider range of services.

A common concern for operators is how to avoid becoming mere channel providers for other fee-earning services, especially after large-scale 3G networks are launched. People use broadband connectivity to access Internet applications, with little revenue going to operators. However, attention is being focused on the traditional Internet ‘tycoon’ Google, and the new VIPs Facebook and Twitter. Mobile users have given these Internet applications increased revenue streams, and their market value has risen. After an enormous investment in network development, operators have not gained to the same degree. And they have to accept complaints from customers that it is impossible to surf the Internet or it is too slow.

With the rise of cloud computing, the trend towards making the operator a mere channel has become more serious. The operator must allocate bandwidth to enable access to the cloud service, and this increases the workload on its network. Operators have to expand their capacity to ensure customers have a good experience; but at the same time, the operator’s revenue is limited. If a cloud service is located in a China Telecom fixed network, and a China Mobile handset is being used to surf the Internet, China Mobile has to pay streaming fees to China Telecom, reducing the income from the devise user. Any gain from higher download charges may not make up for the losses in streaming fees. 

How can a telecom operator avoid becoming a channel? If it is to exert influence on the cloud service provider, it must not only provide infrastructure such as equipment rooms and broadband but also virtual servers and additional services. There is no reason why operators can’t be like Amazon, which provides S3, simpleDB and other value-added services. In the PaaS layer, Amazon opens its original communications capabilities, introduces Internet capability, and sets up a unified development, test, host, and release platform for CPs to rapidly develop services and offer them online. In the SaaS layer, Amazon can provide Web-based conferencing services and IMS-based customer services. 

As well as developing cloud-layer services to avoid becoming a channel, telecom operators should change their business concepts, learn marketing methods developed in the Internet era, and play to the advantages of its original terminal and channel resources. They will then share in the benefits of the cloud computing era.

Since 2003, ZTE has been involved in cloud computing R&D and exploring cloud business models for the telecoms industry. This seven year dedicated programme has made ZTE a cloud computing expert in the global telecoms industry. We have studied the key cloud technologies and architectures in the telecommunications industry, and we have cooperated with third parties such as the China Academy of Telecommunications Research, China Mobile, IBM and Microsoft. ZTE has held and participated in global cloud computing seminars and forums. Mr. Li Mingdong, ZTE chief standards engineer, is the vice president of the ITU-T Focus Group on Cloud Computing.

In China’s 2nd Annual Cloud Computing Conference 2010, ZTE released the CoCloud (Cooperation + Open + Cloud) to encourage open and coordinated development in the cloud. ZTE’s CoCloud system includes specifications for optimized, cloud-oriented hardware and is based on ZTE’s CoCloud operating systems. These operating systems enable virtualization, distributed calculation, distributed storage, and resource operation and provide an end-to-end global solution.

ZTE is cooperating closely with cloud computing experts and organizations around the world to jointly promote the development of cloud computing in the telecommunications industry.