The allure of near limitless scalability, no high upfront costs and no recurring maintenance costs have remained the trump card for cloud service providers. But in every discussion about the benefits, enterprise customers quickly wake up to the reality of security and data privacy risks. Uptime and performance are still there but become secondary concerns behind the first two.
 
Telstra claims to have succeeded in selling cloud services across the region. At least that is how Martin Bishop, Head of Network Applications and Services (NAS) for Telstra, describes the company’s track record in getting businesses to adopt one of its cloud offerings.
 
Telstra is not new to cloud services having sold managed hosting services for more than 10 years. As such the migration to higher value cloud services four years ago was a natural progression of its evolution. Bishop explains cloud services are a natural progression from managed hosting, with cloud being characterised by significant automation being accessible via a portal with a high degree of self-service.
 
As the largest telecommunications service provider in Australia, it is difficult to argue its position as leader of the pack in Australia. In its home market, it is able to offer a variety of cloud offerings including Infrastructure-as-a-Service (IaaS) as well as Software-as-a-Service (SaaS) with  hundreds of applications available today through Telstra's T-Suite Portal.
 
Bishop believes that applications are the major driving force behind cloud adoption and Telstra has been making investments in the delivery of enterprise applications in the cloud. Telstra are generally looking for vertical applications, but where they see real innovation on communications and collaboration tools these can become an acquisition target. Telstra tries to differentiate itself by adding higher value services such as Ooyala – a cloud-based video streaming service.
 
Bishop makes the argument that Telstra’s approach is to come from the top down rather than just infrastructure up. It's a tactical approach that appears to work well given that Telstra already own much of its infrastructure (at least in Australia).
 
He also explains that Telstra’s approach focuses on three layers:
Layer 1 focuses on orchestration creating a single platform to federate and manage different cloud platforms together. Interestingly Telstra's game plan is to be able to orchestrate clouds from other providers as well as their own.  Currently Telstra works with several partners including Cisco providing a single interface to manage multiple cloud providers.
 
Layer 2 is creating a network that is adaptive and dynamic. A software-defined approach to networking enables for more seamless integration.
 
Finally Layer 3 is about offering high value services such as disaster recovery, data analytics, applications and so on.
 
Integrating all three enables the company to offer what it claims is a Unified Service Management experience. Bishop makes it clear though that Telstra is not that keen on being in the utility public cloud space.
 
“Even though the focus will be on delivering value-add around the cloud, Telstra will continue to build cloud for dedicated private cloud. The utility public cloud space is not really our game. The network and the applications and the service management is where we add value over the data centre,” said Bishop.
 
Given our recent talks with Amazon Web Services (AWS), we asked Bishop whether hybrid clouds offer better security than public clouds. His answer: “It’s about risk and perception of risk – risk of shared environment is perceived as high – there are lower risk processes – where people say why wouldn't I put in public cloud – give the customer what they think they need,” he adds.
 
Beyond Australia, Telstra’s local presence strategy relies on partnerships with local incumbents. For instance it partnered with Telkom Indonesia to sell datacentre services in the local market. This is to address issues around privacy, trust and data sovereignty. Bishop maintains that developing local present into local markets across South Asia is something that will continue but was not able to clarify whether the local approach will always be through partnerships or may involve acquisition.
 
It is also tightening its regional partnerships with hardware vendors to ensure it is able to offer technology-specific services – example, Cisco Cloud Services. The company also takes system integration partnerships seriously.