One frequently hears these days of high service provider interest in cloud computing as a potential driver of service provider revenue, and the thinking is not without merit.

From a communications service provider perspective, one key change is that computing services and applications increasingly are becoming “utility-like.” As much as service providers might prefer not to emphasize the point, the basic character of a communications business is highly “utility-like,” in terms of scale.

That doesn’t automatically mean that hosting and data center providers, or access and transport providers, necessarily will benefit in a direct sense. But the notion that such a shift will happen does imply much greater reliance on use of remote data and computing resources that would necessarily drive spending on communications and data center facilities.

“Last year only a third of all software was distributed online either as a digital download or as a service in the cloud,” says Carl Theobald, CEO of Avangate. “By 2014, this figure will climb to over 70 percent.” That obviously will drive demand for access, transport and data hosting.

The issue is how much telco-affiliated or cable-affiliated data centers will profit, compared to other third-party cloud computing infrastructure providers.

“The delivery of IT services is consolidating into centralized, utility-type organizations like today’s electric power utilities consolidated the 30,000-plus independent electric power plants run by enterprises across the U.S. 100-plus years ago,” says Ray Solnik, Appnomic Systems president.

That doesn’t automatically mean today’s service providers have an “automatic” role in providing the business applications themselves, but does suggest that telco core competencies, including mission-critical delivery of services, could be essential building blocks of tomorrow’s business computing and applications market.

It remains somewhat less clear whether the key opportunities lies in the “software as a service” or “platform” or “infrastructure” ends of the business. By most accounts, SaaS will be the biggest part of the enterprise and consumer business, with smaller roles for “platform” and “infrastructure.”

Global software-as-a-service (SaaS) revenue is forecast to reach $14.5 billion in 2012, a 17.9 percent increase from 2011 revenue of $12.3 billion, according to Gartner, Inc. SaaS-based delivery will experience healthy growth through 2015, when worldwide revenue is projected to reach $22.1 billion, Gartner analysts say.

That forecast suggests why cloud computing initiatives by telcos will have to be targeted. There actually isn’t as much direct revenue in cloud computing as some tend to think, at least in the near term. But cloud computing should boost indirect revenue earned in access and transport. And service providers could play a significant role in cloud infrastructure, to the extent that much greater reliance on hosting and computing centers is required.

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