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Orange Business Services’ lead for international cloud operations, Chis McKay

Orange Business Services’ lead for international cloud operations, Chis McKay

In the wake of Orange Business Services taking its enterprise cloud infrastructure to Asia and North America, Business Cloud News had a chance to speak with the company’s lead for international cloud operations, Chis McKay.

The company’s Flexible Computing platform, an offering that includes both self-managed or fully managed infrastructure services, now boasts over 500 corporate customers. And in a recently released statement, the company also said it is on track to bring in the roughly €500m it aims to secure in cloud-related revenues in 2015. With cloud computing revenues up 33 per cent in 2012 alone (around €113m), it’s looking possible.

Cloud is a big part of Orange Business Service’s growth strategy, and as we reported last week the company recently announced that it is planning on expanding its offerings to North America and the Asia Pacific region.

In this respect, McKay emphasises the need for end-to-end, “industrialised” cloud solutions. “When we say industrialised within this context, we mean that each aspect of the service and process is well-defined – the offer has two variants, one is self-managed and the other fully-managed, and those are clearly defined in the sense that they have very clear SLAs, delivery processes, operational processes, change management processes. It’s essentially an industrialised catalogue of services.”

McKay is the first to admit that there’s extensive competition in the infrastructure as a service (IaaS) space, particularly in North America. “So look at Verizon and ATT, and look at cloud – if you look at the recent launch of VMware, and the competitors we have in North America – Saavis, Amazon Web Services – clearly it’s an incredibly competitive environment. We’re not naïve – we aren’t trying to take on Amazon or Google despite the fact they set expectations on pricing, but we also see that larger multinational companies aren’t jumping into the infrastructure as a service market too quickly. The market is much more fragmented,” McKay says.

Instead, McKay believes that MNCs are increasingly looking to deploy ICT through as few providers as possible, reducing the complexity of IT processes. “We often talk about complexity from a technical perspective, from the point of view of the IT environment. Our target base is large MNCs operating in at least two to three different countries – and in the eyes of these players, we’re reducing the complexity of and centralising the whole ICT procurement process.”

Orange Business Services’ move in some way mirrors Verizon’s, but from a different geographic direction. Verizon moved forward with offering partially and fully-managed cloud infrastructure services following a slew of acquisitions last year totalling over $2bn. The company has been eying the Asia Pacific market for some time now, and through its acquisition of Terramark Worldwide (data centres) and MCI Worldcom (fibre optic connectivity) are in a reasonably strong position in the region, particularly in Australia.

Like Verizon, Orange Business Services will need to partner up if it’s going to grow to these services quickly. “The rising cost of building Tier 3 or 4 data centres has put us off investing in real estate for the moment,” McKay says. Instead, the company will be flexing its relationships with third party data centres in order to deliver the Flexible Computing services to new regions. “We’re partnering with Equinix and NTTC with respect to data centres, and we’re actually collaborating quite closely with NTTC. In America they actually provide the cloud platform, and we operate it end-to-end on the Orange network.”

Orange Business Services may have a one-up on many of its competitors in the cloud space because it owns a vast majority of the network communications infrastructure used for services globally, which adds a cost advantage. “It’s really about leveraging our global network and data centre footprint. We already own the communications infrastructure, and a big part of our message is related to that. From the perspective of the American customer, it’s what we can offer outside of North America – when doing business in the EU and in the Asia Pacific region, we’re offering a seamless cloud environment that helps American customers accelerate their go-to-market in the EU and Asia,” McKay says.

McKay also commented on currents working in the other direction, with large Asian MNCs looking to the cloud for infrastructure solutions. “We’re seeing a growing number of Asian MNCs looking to use our services and global network as some of these companies aggressively move into the EU market – the circle completes itself,” McKay says.

The Asia Pacific cloud market is widely recognised as one of the highest-potential growth regions for cloud services over the next few years. In the past few weeks alone, Microsoft announced the launch of its Windows Azure platform as a service in China; the company is also building two new data centres in Australia; and Savvis today announced the global expansion of its data centre presence in Hong Kong . On the telco side, Taipei-based Chunghwa Telecom is working with Asustek to link the island of Palau to the cloud in Taiwan and encourage more widespread cloud services penetration throughout both countries.

Targeting MNCs for enterprise cloud services makes sense for a carrier with a global footprint as large as Orange’s, but while MNCs bring high-value, SMEs bring volume in numbers and a particular demand for software as a service (SaaS). When asked what’s in the pipeline next for Orange Business Services, McKay stresses that the focus on MNCs will not come at the expenses of SMEs, which represent a massive user base for Orange Business Services: “Our SME business is growing tremendously. It’s all about focus – if you do too much too quickly, you’re not going to get anywhere. Now that we’ve built new infrastructure, we’re looking at targeting strategic markets outside of France with more SME-focused offers. It won’t be a global deployment, but we are now looking at framing what we’ve done in France and taking on board the lessons learned. Now we’re looking at strategic markets where we’ll take our SME model,” McKay says. “Asia is a huge growth region for us and we’re looking at it quite closely”.

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