Nemertes Impact Analysis:

Carriers Move Into the Cloud: Security and Credibility are Key

The cloud computing services market is shifting as carriers follow traditional providers like IBM (NYSE:IBM) and HP (NYSE:HPQ) and new entries Amazon (AMZN) and Google (NASDAQ:GOOG) into the utility computing cloud. Last week Verizon (NYSE:VZ) announced Computing as a Service (CAAS): Pay-as-you-go provisioning of physical and virtual computing, storage and security services. Verizon follows AT&T's (NYSE:ATT) lead with Synaptic Hosting in 2008, and Synaptic Storage last month. Less than 20% of participants in Nemertes' Virtualization research are moving to cloud services. A lack of security and control are the primary concerns. Both AT&T and Verizon do tout security and control, highlighting the value of linking MPLS/Private IP services with their cloud services. Yet, security is not enough - they must also prove they can provision, manage and secure dynamic computing and storage for the enterprise at a level consistent with that of IBM and HP.

Impacts:

Enterprises: End-to-end security and performance for cloud computing and storage are mandatory requirements.

Vendors: If Verizon and AT&T establish credibility with enterprises, the shift in the market could be tectonic.

Investors: As the market matures, differentiation will shift to granularity of provisioning, management and control. Vendors such as privately held FastScale and RightScale are ripe acquisition candidates.

Ted Ritter, senior research analyst

http://www.nemertes.com/benchmarks/desktop_and_server_virtualization_benchmark
http://www.informationweek.com/news/services/business/showArticle.jhtml?articleID=217701912
http://news.cnet.com/8301-1001_3-10243090-92.html

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