​Telstra eyes future in cloud as connectivity provider

Telstra has all but hung up its cloud provision boots, focusing its cloud efforts instead on providing connectivity.
Written by Asha Barbaschow, Contributor

After shuttering its ambition to build out a large-scale cloud offering, Telstra is now sticking to connectivity and its roots as a service provider, as that's what Jim Fagan, Telstra's director of global platforms, said the company is good at.

Telstra began its journey to the cloud about nine years ago, building its own cloud infrastructure for customers. Fagan explained that Telstra ate its own dog food, using the cloud internally in addition to hosting customers on it.

Although it was a good business for the telecommunications provider -- and is still good for some purposes -- Fagan told ZDNet it was no longer seen as being core to Telstra's strategy.

"We looked at ourselves basically as what we really were and said, 'You know, what we're really good at is connectivity'," he said. "When you think about it, just the size of our organisation and the regulatory environment we're in, and everything else, we're really good at governance and security and frameworks around that -- and we're also really good at actually managing services.

"All of that really should be the core of our cloud strategy."

Fagan said the thing people keep forgetting about the overall cloud story is that the only way it can work is if it's connected.

"It's great to have these big datacentres and everything, but it kind of all falls apart without the connectivity, which is where we are trying to add that differentiation," he explained, pointing to Telstra's cloud gateway offering.

Through its partnership with Amazon Web Services (AWS), Telstra has access to all of the cloud giant's availability zones, which allows the telco to provide connectivity for a US-based customer in Beijing, China.

"We have a licence to operate both datacentres and transit in China, we're the only foreign-owned telecom through our joint Pacnet venture that has the capability to do that," said Hong Kong-based Fagan, who found himself at Telstra as part of the $697 million Pacnet acquisition in late 2014.

Around three years ago, Telstra shifted to its multi-cloud strategy, which Fagan said is focused on giving customers a choice of the best cloud services available. In terms of choice, Telstra offers access to IBM SoftLayer, VMware vCloud Air, AWS, and Microsoft Azure's public clouds, while for private cloud solutions it uses offerings from Cisco, EMC, NetApp, and VMware. Fagan alluded to offering Google's cloud when it becomes available in Australia later this year.

"We don't want to be a menu where we have every cloud in the world listed," he said. "We want to work with people that are best-in-breed that have the scale and offer infrastructure solutions on top of that.

"The thing is, I don't want to just be a reseller, and quite honestly Amazon doesn't want me to just be a reseller ... that's not who Telstra is. AWS wants people that are going to bring value to the customer."

Fagan also discussed Telstra's acquisitions of Kloud and Readify, saying they have enabled the telco to provide a more effective and simpler onboarding process for its customers transitioning to cloud.

With the capabilities Kloud and Readify have given Telstra, Fagan said the organisation is looking to extend its managed services that it currently has with AWS out to all the clouds the telco supports later this year.

Fagan believes there is going to be a need for hybrid cloud for many years still, noting that not all organisations need to send everything off-site. With legacy infrastructure and a lot of heavy, old applications that weren't designed for the cloud in use, Fagan said it's often not practical for organisations to refractor them, especially where existing contracts or near-new kits are concerned.

"I think we're going to be in hybrid for a long time, and it's going to be a big transition," he said. "Some of the hyperscaled cloud providers would disagree, but there are still use cases that private cloud works well for, where everything doesn't have to be in a public cloud."

Looking internally at Telstra, AWS was the first hyperscale cloud the telco on-boarded early last year, but it also looks across its cloud menu before building out a new application.

Currently, Telstra is taking the approach that if it introduces a new application or service, it looks straight to the cloud, then pulls it back on-premises if cloud is not viable.

"We're looking to migrate as many applications as we can, either as gear becomes end-of-life or not appropriate on-prem," he explained.

"We're using the move to the cloud as an opportunity not just make them cloud-ready, but how do we refactor it, how do we make it more modular ... particularly on a product development side."

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