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September 15, 2011

Wireless service providers cashing in on cloud computing boom: IHS

Cloud services can help wireless service providers monetize data in their quest to increase revenues, says the report

By CBR Staff Writer

The cloud computing boom is enabling wireless service providers to cash in on a market where consumer and enterprise spending is set to reach more than $100bn in 2015, according to the IHS iSuppli Mobile & Wireless Communication Research Area from IHS.

Clouds can be personal and geared toward the consumer, such as those offered by Apple, Google and Amazon, for users to store and manage their own data; or they can be oriented toward the enterprise for business operations.

Consumer and enterprise spending on the public segment of the cloud is projected to rise to $110bn in 2015, up from $23bn in 2010, says IHS.

Public cloud spending will climb to $35bn in 2011, up 52% from the previous year.

Cloud computing prospects in the enterprise space appear especially exciting for wireless service providers, which are also known as mobile network operators (MNO).

MNOs not only possess a trusted brand, they also already operate in the enterprise space by providing telephony and network connectivity support.

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And because MNOs possess important information about customer preferences, they can present more personalized packages, adding value to the overall service.

MNOs also have billing platforms for charging customers based on usage, enhancing ease of use.

Cloud services can help MNOs monetize data more successfully in their quest to increase revenues.

Cloud participants can achieve higher margins if they employ a service model that offers an entire ecosystem including software, a platform of services and infrastructure, as opposed to just providing the discrete parts making up the whole.

Individual cloud models include platform as a service (PaaS), software as a service (SaaS), and infrastructure as a service (IaaS).

In particular, cloud computing could appeal strongly to the enterprise segment as costs can be controlled.

However, cloud computing carries its own risks, including issues relating to data security, privacy backup and recovery, and laws governing locations and data retrieval.

As a result, online computing and storage in a cloud service potentially could be a greater concern for the enterprise than the consumer, necessitating careful evaluation of benefits vs. tradeoffs.

IHS Communications and Consumer Electronics senior director and principal analyst Jagdish Rebello said cloud computing is a convenient, on-demand service over the Internet, through which users can pay for applications or storage space provided by a third party based only on the amount used.

"Cloud computing, while still having to address issues of compliance and security among others, is a game changer and a really positive paradigm shift from the perspective of any user," Rebello said.

"Imagine not having to commit ahead of time for such things as software expenses, storage capacity or application licenses and instead paying for only what you use and dynamically updating the use of whatever you need."

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