Global Cloud Xchange 'Moves up the Stack'

By Gary Kim

How successful Global Cloud Xchange will be with its new positioning as a supplier of “Cloud X” enterprise-class cloud services, applications and content remains to be seen.

But the strategy is completely in line with thinking across the communications industry that value has to be increased if services are not to become commodity “dumb pipe” offers.

In essence, Global Cloud Xchange (formerly Reliance Globalcom) wants to reposition as a supplier of complex multi-tiered enterprise applications directly on to customer’s enterprise networks in minutes, rather than months.

The analogy would be a telco or mobile service provider selling voice services, Internet access and messaging, rather than undifferentiated bandwidth, a cable TV company selling entertainment video services or a data center selling managed apps.

Global Cloud XChange wants to emphasize sales of complex enterprise applications, provisioned directly on to customer’s enterprise networks in minutes, rather than months.

By emphasizing provisioning on demand, Cloud X shifts the value proposition from “bandwidth” to “apps,” “connectivity” to “agility,” “routes” to “dynamic provisioning.”

“As cloud computing becomes more prevalent, the network that supports it becomes ever more complex,” said Bill Barney, Chief Executive Officer, GCX. “The network must now undergo a profound transformation, from a static entity, to a dynamic, intelligent, application-aware fabric that can support multiple traffic requirements, diverse geographies and flexible pricing models.”

In essence, Global Cloud XChange is banking on its ability to create a new role for itself. Secure and efficient cloud content and applications distribution then becomes the value provided by the firm, not bandwidth available from place to place.

“We believe we will be one of the most disruptive companies in the next five years because we will become the fabric that enables the global cloud,” Barney said. “Our new infrastructure will accelerate cloud traffic across the world, facilitate global content and application distribution, enable enhanced customer experience, and transform the way people think about rolling out applications and services.”

Where a traditional capacity provider might have focused primarily on “routes, bandwidth, prices and resilience,” the GCX offer emphasizes delivery of content and apps, especially “on demand.”

The proof will come over time, as revenues attributable to cloud apps and features can be distinguished from simple capacity sales.

That will be the case even as cloud services drive use of the underlying network, as voice revenues likewise drove usage of telco networks. In other words, as use of the network is embedded in the retail price of a video subscription, so cloud apps and services will embed the cost of use of the network infrastructure that once was the focus of the business.

That is one concrete example of how service providers can “move up the value chain” to avoid being providers of commodity dumb pipe. 

Edited by Alisen Downey

Contributing Editor

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