The public Internet will not be sufficient for business-grade cloud computing which requires a strong physical network infrastructure, Ovum said, adding that cloud computing apps will move from public IP (Internet Protocol) to trusted networks.
In a Wednesday statement, the analyst firm described cloud computing as a "well-defined concept". However, the technology will require a resilient physical network infrastructure to live up to its promises, said Ovum.
To deliver cloud computing services, more will need to be done, it noted. Ovum explained that the network will need improved interconnectivity for resiliency, load balancing, new transmission capacity and added intelligence from new optical and IP hardware.
"Public IP will not be sufficient for business-grade cloud computing and carrier Ethernet and IP/MPLS VPNs (multiprotocol label switching virtual private networks) will play increasingly important roles," Ovum principal analyst Matt Walker said in the statement. "More efficient data centers, and more of them, distributed globally, will also help."
Dana Cooperson, who is Ovum's practice leader for network infrastructure, noted that the network will become an "essential part" of telcos' value propositions when more cloud computing applications move from public Internet--which has no quality of service (QoS) or SLA guarantees--to trusted networks.
For now, both operators and vendors are eyeing IaaS (infrastructure-as-a-service) apps to drive more and higher-margin revenue, which will in turn justify and support the investment in multi-terabit networks, said Ovum. Compared to "all you can eat" consumer broadband business models, Cooperson explained that public cloud Iaas business models are "pay-for-use" or tiered which ties resources used more directly to revenues generated.
That said, cloud applications will only "incrementally" add to infrastructure vendors' equipment sale, said Cooperson. However, products which can enable telcos to move away from being dumb pipes that provide simple connectivity services and those that can support large, intelligent networks will be in demand to support not only traffic growth, but new income as well, for telcos, she added.