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Verizon Cloud’s Red Flags

Posted by Jason Bloomberg on Oct 7, 2013

Last week’s announcement that large US telco Verizon was rolling out their brand spanking new Verizon Cloud created a modest buzz in the Cloud community. Instead of building on the Terremark infrastructure or brand, Verizon decided to build this Enterprise Public Cloud from the ground up leveraging Xen and CloudStack technology.

Not that there’s anything wrong with any of that, mind you. Building a Public Cloud from the ground up is a great way to ensure you’re using the latest and greatest gear, and by all accounts, Verizon is doing just that. But in spite of the positive spin Verizon is putting on this news, they still have plenty of challenges ahead.

The most important question is whether they have any hope of catching up to the Amazon AWS juggernaut. True, they will avoid Amazon’s legacy problem, but it’s only a matter of time until today’s shiny new tech is tomorrow’s crusty old legacy. Will they be able to build enough momentum in the meantime to carve a chunk out of AWS’s market share?



Second, even if they have the technical chops to gain on Amazon, will their telco culture get in the way? As I discussed before, the telco industry has substantial cultural baggage. Can Verizon surmount theirs?

Third, what’s the deal with CloudStack? And why are they saying they are leveraging CloudStack technology without actually running their Cloud on CloudStack? That prevarication suggests that they have branched the CloudStack code to suit their purposes. True, they may be able to build proprietary capabilities this way, but will this strategy backfire over time, as the core CloudStack code base matures?

Fourth, where is Citrix in this story? Citrix is driving both Xen and CloudStack to further their “turnkey” Private Cloud strategy. It’s not clear, however, whether these efforts are up to the task of supporting a vast Enterprise Public Cloud. Can Verizon fill in the gaps quickly enough?

Finally, what about the customers? Will customers buy into Verizon’s offering, even though it’s still relatively untested? Amazon has had years to work out the kinks in their offering. True, Verizon gets to take advantage of lessons that other providers have learned the hard way, but will it be enough?

My guess: the Verizon Cloud will be successful, if only because the rising tide of demand for IaaS is raising all boats. There will be bumps along the way to be sure, but Verizon is unlikely to go the way of Nirvanix. But if there were ever a time for the buyer to beware, this is it.


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