The firm will rapidly expand its cloud offerings, with platform-based services, customer relationship management, and enterprise resourcThe telecom provider will expand its cloud computing offerings with platform-based services, and upcoming CRM and ERP apps.e planning launching in 2011.

Charles Babcock, Editor at Large, Cloud

January 18, 2011

5 Min Read

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Top 10 Cloud Stories Of 2010

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Verizon Business rapidly expanded its cloud capabilities last year, and plans to do the same in 2011. It's not previously been seen as a prominent name in cloud computing, but its enhanced capabilities indicate that may be about to change.

It started out in 2009 offering simple infrastructure as a service, like Amazon's EC2. Later this year, it will move beyond infrastructure into platform-based services and start offering customer relationship management (CRM) and enterprise resource planning (ERP) applications online as software as a service (SaaS). Not only is it bringing increased capabilities, but its customers are bringing increased demands, as they broaden the role Verizon's Computing-as-a-Service (CaaS) plays in their operations.

"We are seeing very broad use-cases," said Patrick Verhoeven, Verizon manager of cloud services, as business workloads become more production-oriented and less dominated by Web site applications or software test and development.

Verhoeven doesn't look under the lid of customers' workloads, but he suspects a few are making use of Verizon's ability to guarantee Payment Card Industry (PCI)-compliant infrastructure to customers. PCI-compliant architectures in the cloud are gaining new credibility as Amazon Web Services announced it had achieved PCI compliance on Dec. 7, which would allow credit card transactions to take place there. Verizon had its own audited and compliant infrastructure in place as of Aug. 18.

"Customers still have to undergo a third-party audit to ensure their systems connected to the cloud are compliant. But knowing the (cloud) infrastructure is already compliant makes that easier," said Verhoeven.

Verizon's CaaS cloud is managed following IT Infrastructure Library guidelines and is audited for SAS 70 compliance. Part of Verizon's approach to cloud users this year will give them not only fast, automated provisioning of servers, but also the ability to conduct secure transactions in an environment managed to established standards. One result is that Verizon moved out of the also-ran category on Dec. 22 into the Gartner "Leaders" so-called magic quadrant. Other leaders include Rackspace, Terremark, Savvis, and AT&T, according to Gartner. Amazon Web Services with EC2 is shown as leading the pack in the "Visionaries" quadrant.

In addition, Verizon is one of a handful of suppliers named a first-tier implementation partner by VMware, which means Verizon had adopted VMware's vCloud compatibility software and can run VMware ESX Server virtual machines. Since VMware is the most widely distributed virtualization software in the enterprise, a VMware-compatible cloud might have a broader market appeal than ones that run only their own brand name.

Slideshow: Cloud Security Pros And Cons

Slideshow: Cloud Security Pros And Cons

Slideshow: Cloud Security Pros And Cons (click image for larger view and for full slideshow)

Verizon's CaaS is based in data centers in Amsterdam, Hong Kong, and Beltsville, Md. Additional cloud data center capacity will be added by the end of the first quarter of 2011 in London, Canberra, and San Jose, Calif. Two additional data centers will come on line in Culpepper, Va., and Miami by the end of the first quarter to supply cloud services to the U.S. government. In all, Verizon manages 200 data centers worldwide, with the bulk of them dedicated to its network and telecommunications traffic, hosted services, and co-location services.

Verizon cloud services are different from some people's notion of cloud computing. Verizon CaaS may host either virtual machines or actual, dedicated blade servers for any customer who wants its own physical resources. Verhoeven said some customers seek their own blade when they're running a major database system in the cloud, and 30% of its cloud business consists of the dedicated blade. Savvis and Rackspace also offer servers in either hardware or virtual forms; EC2 is a virtual machine environment.

Cloud users are no longer impressed with the speed with which you can spin up a virtual machine for them. Rather, they may want that virtual machine in a low-cost, plain vanilla, x86 environment one minute and in a highly secure, well-managed one the next. That would allow them to develop and test a system in the cloud at low hourly rates, then upgrade it to a production system with stronger guarantees of high availability. Verizon is also likely to expand its security options as an established supplier of security services to business, such as intruder detection and firewall protections.

"There is no single cloud model that is going to prevail," predicts Verhoeven. What Verizon is seeking to do is provide a variety of offerings, such as CRM and ERP, to appeal to many types of consumers. He wouldn't specify who will supply the base applications.

Verizon has plans to offer platform as a service products as well, where the cloud supplier typically makes development tools and other services available to parties running applications in its environment. But Verhoeven was mum on what direction the platform might take.

He said Verizon can combine network services with its cloud services offerings. For example, a CaaS customer can opt to use Verizon's own private, secure IP network as a substitute for the Internet, for those who want that added measure of security and surveillance.

Many of its earlier cloud offerings appeared to be extensions of Verizon's co-location and managed services offerings, rather than fresh products from a newly minted cloud vendor. Now that it's moving deeper into cloud computing, it's spending less time following the "visionaries" and more time showing what can be done. With its security, availability, and VMware compatibility, it's in a better position than some to offer hybrid cloud computing, with the same workload running sometimes on-premises, sometimes in the cloud.

About the Author(s)

Charles Babcock

Editor at Large, Cloud

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse University where he obtained a bachelor's degree in journalism. He joined the publication in 2003.

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