In case you haven’t seen the news, Verizon has announced it will acquire cloud service provider Terremark.
One sure sign that a technology is making the leap from bleeding-edge early adopters to the mainstream of the marketplace is exactly this sort of consolidation. This is the beginning of that moment, when the major players in the broader telco marketplace determine that the best way for them to keep their offerings to their customers innovative and high-value is to acquire smaller, more agile cloud specialists who have led the way into the space. The combination of Verizon’s broad account span and rich communications portfolio (encompassing everything from wireless to telephone to networking to hosting) and Terremark’s offer of cloud economics and elasticity exemplify why this trend can be positive for enterprises and for the industry. We expect to see lots more.
Both companies are significant deployers of Citrix products (and, of course, others) in their cloud offerings, and were already working together to offer solutions, especially in the Federal cloud space in which Terremark is one of the leading players.
Many telcos and traditional hosters have made their first forays into the cloud. But for the most part, their efforts have been tentative and undifferentiated, relying on identical cloud-in-a-box offerings to jumpstart them into the marketplace. They are seeing the results we had predicted: offering undifferentiated services on high-cost infrastructures is competing in the wrong race — the race to the bottom — while wearing heavy ankle weights. In order to be cost-effective and high-value at once, providers need to be able to incorporate their own expertise in areas such as business continuity, development and test, and compliance into their offerings while building on products and technologies that deliver choice at the right price.
The Verizon-Terremark deal is a sure sign that telcos recognize that businesses are ready for the cloud and know that they need to deliver something other than “the next Amazon” to their customers. The ability to innovate and differentiate at profitable price points is what the Citrix OpenCloud approach has already brought to many of the current “true cloud” players. As these “marriages” of agile cloud providers and established broad-portfolio communications companies continue, these companies will be able to bring their customers to the cloud with everything — from hypervisor choice to powerful edge networking optimizations to rich desktop and application delivery to the federated views of networking and identity management — that tie the on-and off-premise infrastructure, the public and private resources, into an elastic, integrated foundation for running their businesses.
As with the cloud itself, this is only the beginning.