BT Hits the Cloud with the Virtual Data Centre

| June 18, 2009 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Dustin Kehoe

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

June 18, 2009 – BT has launched its Virtual Data Centre (VDC) offering dynamic services such as CPU, memory, storage (i.e., NAS and SAN), virtual servers, firewalls and load balancing that can be self-provisioned ‘on the fly’ to support customer infrastructure requirements. BT’s VDCs will be available in the UK, Benelux, Germany, Italy and Spain and then plans to globalize VDC through additional facilities in US and APAC later in 2009. VDC is supported by a range of professional services and targets the top 1,100 customers.

Analytical Summary

• Current Perspective: Positive on BT’s launching a global ‘infrastructure as a service’ offering dynamic computing, virtual servers, storage, load balancing and security across a shared platform, because this move will appeal to customers looking to move their IT infrastructure into a cloud environment to reduce costs, improve ROI and benefit from more transparent pricing based on a usage-based cost model.

• Vendor Importance: High to BT, because the company needed to offer dynamic computing solution to appeal to customers looking for next generation data center solutions that promise flexibility and cost-savings. BT’s Virtual Data Centre (VDC) is also a strong complement to its professional services capabilities helping customers address topics such as consolidation, virtualization, as well as IT audit, discovery and continual migration.

• Market Impact: Moderate on the data center services market, because BT’s VDC is an important counterweight to the Verizon Business CaaS (Computing as a Service) and AT&T’s Synaptic Hosting, which are very similar propositions. While BT is likely to be a major contender within countries and regions, it will face serious challenges from other players. However BT is likely to have an advantage in Europe given that the service will be available directly from more countries. If the company is able to align its professional teams and local sales organizations behind VDC, competitors will be forced to respond if they hope to penetrate important national accounts.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe
| Client access - Full report in Managed IT Services

Recommended Competitor Actions

• AT&T can point out that it rolled out its AT&T Synaptic Hosting service in 2008, and it has already expanded on this with its virtual storage announcement in May 2009. AT&T can support large-scale computing and applications on demand via virtualized servers and deliver services across its hosting infrastructure. It could also consider countering the BT/HP alliance by pointing out that it is a preferred partner with IBM and has worked jointly on large scale data center projects to support major global accounts.

• Verizon Business should highlight that customers can provision both virtual and physical services for supporting customers with test/development environments as well as physical servers to support high input-output applications such as database applications and e-mail. It should also highlight having a strong online platform to provision new services and solid SLAs metrics on portal and server availability and guaranteed provisioning times.

• Having a strong city ring infrastructure interconnected to a network of data centers across Europe, COLT should strongly consider developing a similar utility computing proposition to support its customers looking to virtualize their IT infrastructure. Other providers such as Terremark, Rackspace, KPN/Getronics and HP/EDS should also raise the level of visibility for their existing service offers.

Recommended End User / Customer Actions

• Enterprise customers should be aware that there are more choices available for utility computing. AT&T is perhaps the first to offer a global service amongst the leading carriers, but Verizon Business plans to extend its US capabilities to Europe and APAC facilities later in 2009 and is therefore not too far behind. Customers should be aware that BT differs somewhat in the fact that it will offer utility computing from more European facilities, has strong country organizations where it offers the VDCs and professional services capabilities.

• Customers should consider utility computing propositions to support various business requirements. For example, enterprises with seasonal business (e.g., online retailers) will find benefits in being ample to ramp up and down resources as required, others would benefit from staging / development, improving time to market for new services, or reducing costs through better use of virtualization. There will be a lot of developments in this space and customers should continue to monitor market trends closely.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Business Telecom Services - Europe
| Client access - Full report in Managed IT Services

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