Telstra E&G's tentative approach to cloud computing

Stuart Corner
Wednesday, 27 May 2009 12:11

IT Industry - Strategy

Hosting applications for customers is a fast growing and strategically important business for Telstra Enterprise and Government but Telstra E&G is stopping short of offering hosted applications itself, at least for now.

Telstra Business last year announced a big push into SaaS with the launch of T-Suite with Microsoft providing many of the initial hosted applications. At the same time Telstra and Microsoft announced "a broad strategic alliance to bring together business software applications, mobile services and devices, and integrated computer and telephone services over Telstra's Next IP and Next G networks." However this, at present, does not translate into the provision of SaaS services to corporates.

T-Suite is an initiative of Telstra Business, which addresses the SME market, and it was not made clear which division of Telstra was driving the strategic alliance with Microsoft. However the announcement did say that "A wide range of business and government segments would potentially benefit from an array of new services," to be provided under a SaaS model.

At a briefing in Sydney this week attended by several hundred customers, Paul Geason, executive director for convergent sales, in Telstra Enterprise & Government, stressed the importance of the strategic relationship with Microsoft, and one announced with Cisco at the same time, saying these were "incredibly important" to Telstra, but he later told iTWire that Telstra E&G had no immediate plans to get into software as a service, stressing instead the importance to Telstra E&G of hosting customers' own applications.

"Today, Telstra E&G would not take responsibility for the provision of any application, but I am not discounting it," he said, adding "There are some large enterprise applications where we believe our scale and our infrastructure can deliver benefits. That might be an SAP or an Oracle application."

According to Geason, "When we talk about cloud computing in E&G it is very much about customers putting their application into our environment and into your network instead of running their own data centre. It resides on our servers and is then provided over a private IP network."

Geason added that as a percentage of E&G's revenues this business is not large, about $100m per year, but said "It's an incredibly fast-growing business for us and very strategic part of our business and one we have to get right. Our intent in this area is significant and our investment is significant...Creating the bundle of the network, the management of the network and the hosting of the application is fundamental to us because for the customer the application is more important than the network."

Much of the investment, he said, went into managing the network to optimise delivery of applications and guarantee performance at an application level. "The ability to do deep packet inspection, the ability to do quality of service and to prioritise applications is not easy and that is a huge investment for us as well."