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The market for cloud computing is getting more interesting every day.

There is still a long way to go, as the success of cloud computing depends not only on high-speed networks, but also on capacity, robustness, affordability, low latency, ubiquity, security, privacy and reliability. Of course, the ideal infrastructure would be nationwide FttH networks, but obviously we can't wait for that; so in some areas cloud computing will happen faster than we expected, while in other areas it will be slower.

While many companies — especially telcos — are adding cloud services as a new premium service to their offerings the reality is that cloud computing is a utility. There is nothing wrong with that, and the telcos are moving into that space anyway.

The telcos possess a major advantage in their large customer bases, and in particular with increased intelligence through networks such as the Internet of Things (IoT). They are able to build up very interesting profiles and be the middlemen in linking these with other databases, becoming the spill in the middle, between those who want to provide services and those who want to use services — all of this, obviously, according to very strict privacy rules. The future of cloud computing depends on trust and if the players cannot guarantee that the path to success in this market will be painful (regulations) and slow, and therefore unnecessarily costly.

At the same time, these requirements also allow for specialisation, niche markets and value-added services.

With cloud computing being a utility it will start following the characteristics of a grid, as happens with electricity grids. Vendors, service providers and application providers will all be linked into this cloud formation, and that in itself will generate interesting business opportunities, such as cloud brokering — this can be used in the process of demand aggregation, peak loads, emergencies, catastrophic events and so on.

Key to such an environment will be cooperation. At the moment there is little or no cooperation and most of those involved conduct their business slightly differently. Obviously more coordination will be needed in order to create these new opportunities in the market. A key problem for a more commercial approach to this is the absence of a business model. No one knows yet how to best monetise this new utility (infrastructure-as-a-service). This will happen once enough momentum has been built up in the market.

However, in the meantime Research and Education Networks (RENs) might be among the first to get this right and they might set the example and become leaders in early standardisation, cooperation and coordination. They are also the leaders in Internet2 and that is eminently suitable for such developments. Furthermore their networks are in most cases fully end-to-end fibre.

By Paul Budde, Managing Director of Paul Budde Communication. Paul is also a contributor of the Paul Budde Communication blog located here.

Related topics: Access Providers, Cloud Computing, Telecom