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Telecom ponders future amid surging cloud computing popularity

With cloud computing popularity on the ascent, Ben Chen has to think big. Chen is president of business development at a U.S. branch of China Unicom, a state-owned telecom and the second-largest wireless carrier in the world’s most populous country. I spoke to him at the Gartner Catalyst conference in San Diego earlier this month.

Based in San Jose, Calif., Chen’s division helps U.S. companies moving to China get set up with telecommunications, connecting their facilities abroad with stateside headquarters. And it does the same for Chinese companies building outposts in the U.S.

With the steep and rapid increase in the number of cloud adopters, especially in the U.S., Chen wonders, how relevant will a traditional telecom remain to customers?

“Maybe they will rely on more cloud services, because they have all their content on the cloud, and the cloud can be synchronized, so maybe they won’t need real connectivity between China and their headquarters anymore,” Chen said. “So we have to think about what role we are going to play.”

Mobile defense

In China, China Unicom offers mobile and traditional voice and data services “very similar to AT&T,” Chen said. China Unicom, though, offers public cloud services, unlike AT&T and other U.S. telecoms, which have left the cloud market because they couldn’t compete with the likes of Amazon and Microsoft.

But China Unicom also can’t compete with the research-and-development power of providers like Alibaba Cloud, which are pouring money into innovative new technology and features, Chen said. Instead, it needs to find another way to take advantage of the current mass migration to the cloud.

China Unicom’s big differentiator is  its vast mobile infrastructure, supporting approximately 300 million mobile customers, Chen said. Many users of mobile devices in China have no landline telephones — just handsets packed with mobile apps and reliant on connections to the internet and public cloud providers. Such a network can be leveraged in the face of accelerating cloud computing popularity, he said.

“That can play a more important role, working with the cloud providers and the users,” Chen said. “This is our value now rather than the traditional phone service and the other services. We should leverage our value to create more value thorough mobile.”

Plugging into the future

The internet of things (IoT) presents another market for growth, Chen said. China Unicom is working with technology vendors on smart homes, myriad smart devices, machines and vehicles; for example, it partnered with Cisco IoT division Jasper on a service to help automakers build connected cars.

Big data is a third area, Chen said. By collecting information on how its hundreds of millions of mobile customers use their devices, China Unicom can determine where service is concentrated and can put in a new cell tower, for example.

Of course, cloud adoption, especially in China, which lags a few years behind the U.S. in taking on new technology, Chen said, isn’t 100%. So carriers like China Unicom that do traditional connecting with dedicated circuits aren’t feeling the heat of rising cloud computing popularity.

“Maybe we have a few years. [Companies are] in migration — not everyone has moved to cloud yet,” Chen said. “But we have to be ready.”

To learn about what IT professionals at Gartner Catalyst said about cloud strategies at their organizations, read this SearchCIO report.

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