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Is 'local cloud' an oxymoron?

Steve Hodgkinson | March 11, 2009
NEC and Telstra build out their SMB cloud offerings

Aggregating and packaging software as a service (SaaS) offerings for a local market seems like a good way for a company to create a value-adding cloud service for its customers. However, a 'local cloud' will be an oxymoron unless it delivers tangible local value. Single sign-on, integration and all-in-one billing will be convenient, but these will ultimately be available in the cloud. The real value will come from serving up the cloud while keeping data local.

NEC and Telstra are seeking to bring the global cloud safely down to earth in the local Australian market

Ovum logoEveryone wants to get involved with the cloud these days, and it is interesting to observe the continued build out of cloud services platforms aimed at the local-market small and medium-sized business (SMB) sector. NEC and Telstra have been early entrants into this arena in the Australian market, with NEC's Applications Net and Telstra's T-Suite both debuting in 'online beta' mode late last year.

Applications Net is a cloud services aggregation and integration platform something NEC refers to as a 'SaaS supermarket'. It aims to bring together a coherent bundle of SaaS collaboration and business applications knitted together under an NEC-developed integration portal with single sign-on. While some of the leading players like Salesforce and SugarCRM are currently available, NEC has so far selected mainly niche applications some from local software companies and some from NEC itself. It is currently training up channel partners to commence selling the service.

Telstra T-Suite offers a similar single sign-on, service aggregation, single-billing proposition, but Telstra has elected to partner with Jamcracker to create the platform and with leading global vendors for the core SaaS offerings. At launch T-Suite included data security and backup services from Iron Mountain, McAfee and Message Labs. Online access to Microsoft Exchange Mail, SharePoint Services and Dynamics CRM was recently added. Services are provided on per-user, per-month pricing.

The paradox of local, trusted brands in the cloud

Both Telstra and NEC see a positive value proposition in the local provision of cloud services. The theory is that SMBs will trust the locally known brand identities and their channel partners in preference to buying similar services from say IBM's LotusLive, Microsoft's Business Productivity Online Standard Suite or from Amazon, Google, JumpBox, Zoho or any one of the plethora of other global providers.

There is an inherent paradox here of course. One of the key innovations of cloud computing is, well, the cloud the seamless, ubiquitous, infinitely scalable, global Internet. However, the Internet can be a scary and impersonal place. The World Privacy Forum recently released a report entitled 'Privacy in the clouds: risks to privacy and confidentiality from cloud computing', highlighting the many concerns that anyone with a legal background would raise about the notion of data residing … where exactly?


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