Computer System Networking and Telecommunications

Original Research Article

Application of Cloud Computing in Telecom Operators

Wenhao Zhou,Yongbing Xiao,Yulan Shen
Information Engineering College, Xining University of Technology, Qinghai, China

ABSTRACT
The emergence of cloud computing has brought great changes to the internet. The changes occur due to the effective
use of idle resources and more importantly, it is the results of Google, Amazon and other major internet companies
to change the desktop form for the PC core software. Firstly, cloud computing can be the development of Distributed
Computing, Parallel Computing, and Grid Computing. It can make full use of the Internet's computing resources to
provide users with on-demand services. Cloud computing, although from the Internet, but in a long run, we can notice
that there is no one type of business other than telecom operators that could be more conducive to develop a complete
chain from user end to the internet and to computing. With the introduction of 3G and reorganization of China's
telecom operators, operators can build a highly integrated cloud computing chain and its user base and infrastructure
construction become obvious advantages for continuous development. As to how to develop the telecom operators
and how to establish their own specialty and improvement, is an urgent problem to be solved. Based on the current
situation of cloud computing and cloud computing of telecom operators in China, this paper analyzes the advantages
and disadvantages of telecom operators 'development of cloud computing by studying the strategy and development
of telecom operators' cloud computing in China and abroad. This paper also discuss the insights and proposals to the
changes, countermeasure, and strategies towards cloud computing development by telecom operators, in the hope of
contributing to the development of China’s cloud computing industry.

KEYWORDS: cloud computing , telecom operators, development strategy, business model

1. Introduction
1.1. Research background and research significance
In cloud computing, software serves as a service (SaaS), platform serves as a service (PaaS), and infrastructure also
serves as a service provider (IaaS); which extends cloud computing to a variety of service models and corresponding
service providers. Due to the diverse patterns of the cloud computing services, IT companies use it at different levels
based on their own advantages resulting to the formation of crowded situation.
IaaS provides customers with rental processing, storage, networking and other basic computing resources that users
can deploy and run on any software, including operating systems and applications. Customers do not manage or control
the underlying cloud computing infrastructure, but can control the operating system, storage, and deployment of the
application. It is possible to select the network components (such as firewall and load balancer). For example, Amazon's
AWS and at&t's Synaptic.
PaaS provides customers with the ability to deploy applications created by customers with the development language
and tools provided by the vendor to the cloud computing infrastructure. Customers do not need to manage or control the
underlying cloud infrastructure, but can control the deployment of applications. Customers may also control the hosting
configuration of the application. For exmple, Google's App Engine platform, Saleforce's force.com platform, Facebook’s
F8 platoform, and Microsoft’s Azure platform.
SaaS is the service provider running on the cloud computing infrastructure applications and is able to be in a
variety of client devices through the thin client interface access, such as the browser. Customers do not need to manage
or control the underlying cloud computing infrastructure, requiring only a limited number of customer-configurable
configurations. For example, Microsoft's Officelive, Google's online documentation services and Saleforce's online
customer management software.

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the original work is properly cited.

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 Wenhao Zhou, et al

At present, the technology of IaaS and SaaS is relatively mature and has certain commercial cases abroad, but the
overall market potential remains to be maximized. PaaS technology has not matured. The cloud computing vendor
platforms are not compatible, using proprietary data formats and API (Application Programming Interface, application
programming interface), and it is difficult for users to switch from one platform to another. From the analysis of
development in cloud computing industry, it is predicted that China will the cloud computing service provider for IDC
service providers, traditional IT vendors, and internet companies. With the continuous integration of telecommunications
and the Internet, cloud computing will have a significant impact on the traditional telecommunications industry. On
the one hand, the traditional IDC (Internet Data Center) has been unable to meet the development requirements. To
ride this new wave of computing, as a long term plan, telecom operators has build multi-network integration and cloud
computing trends have become obvious. With the release of China's 3G, mobile operators already have the ability to
integrate information services.
On the other hand, the trend of internet development is leaning towards high-speed and large amounts of data. Cloud
computing lowers cost and improves resource utilization, making the internet into a ‘high-speed and large data’ era. In
addition, the internet terminal has changed from desktop, to laptop, notebook, Tablet PC and smart phones. The aroused
problem is the decline of storage capacity and mobile operators have effectively use cloud computing to solve this
problem.

1.2. Research content

This paper is divided into five parts, namely introduction, cloud computing overview, telecom operators and cloud
computing, ideas on telecom operators cloud computing development, concluding remarks.
Chapter 1: Summarize the development direction of cloud computing and telecom operators.
Chapter 2: Introduce the definition of cloud computing concepts, basic principles, highlighting features, applications
and prospects.
Chapter 3: Analyze the development strategy and development status of cloud computing in telecom operators in the
country and abroad, the advantages and disadvantages of telecom operators to develop cloud computing, and focus on
the development of cloud computing in international and domestic telecom operators.
Chapter 4: Based on comprehensive analysis and current status, to provide views on the development direction of
China's telecom operators in cloud computing development

2. Cloud computing overview

2.1. Cloud computing definition and basic principles
Cloud computing is an internet-based computing which shares hardware and software resources and information can
be provided to the computer and other equipments. The whole operation is much like the grid.
Cloud computing will be the next major change since the big change to client-server in the 1980s. Users no longer
need to understand the details of the infrastructure, does not require the professional expertise and does not need direct
control.
Cloud computing describes an Internet-based new addition in IT services, usage and delivery model that typically
involves the use of the Internet to provide dynamically scalable and often virtualized resources. Cloud is actually a
metaphor of the Internet. As cloud is previously often used to represent the telecommunications network, it is later
also used to represent the internet and the underlying infrastructure. Typical cloud computing providers often provide
common network business applications that can be accessed through software such as a browser or other Web services,
while software and data are stored on the server. Among the key elements of cloud computing, it also includes a
personalized user experience.
Cloud computing can be considered to include the following levels of services: infrastructure as a service (IaaS),
platform as a service (PaaS) and software as a service (SaaS). Cloud computing services typically provide a common
online business application that is accessed through a browser, and software and data can be stored in the data center.

2.2. The basic characteristics of cloud computing

There is a certain similarity between cloud computing and nature’s cloud and water cycle, which made ‘cloud’
a fairly appropriate metaphor. According to the American National Institute of Standards and Technology, cloud
computing services should have the following characteristics:
• On-demand self-service.

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Application of Cloud Computing in Telecom Operators

• Able to access any network device anytime, anywhere.

• Sharing of resource pool by multiple users.
• Flexibility in quick re-deploying.
• Services that can be monitored and measured.
• Quickly deploy resources or get services based on virtualization technology.
• Reduce the processing burden on the user terminal.
• Reduced user reliance on IT expertise.

2.3. Core features of cloud computing

• Agility enables users to quickly and easily acquire technical resources at low prices.
• Accessibility of the application interface (API) refers to the ability to allow software to interact with the cloud in
a way that is consistent with the 'human-computer interaction'. Cloud computing systems typically use APIs based on
Representational State Transfer (REST) network architecture.
· In the transmission mode of the public cloud, support has been transformed into operating costs, so the cost has
dropped significantly. It is clear that the entry into the hurdle is due to the fact that the architecture is typically provided
by a third party and does not require a one-time purchase and does not have the pressure of a rare centralized computing
task. The principle of general computing based on computational resource packs is implemented internally on a fine-
grained basis based on user actions and less IT skills.
Device and local dependencies allow users to access resources through a web browser without having to worry about
what devices they are using, or where to access resources (such as PCs, mobile devices, and so on). Often facilities
are in a non-local (typically provided by a third party) and are accessed via the Internet, and the user can connect from
anywhere.
• A software architecture technology called multi-tenant allows resources and consumption to be shared under a
multi-user pool:
The centralization of the architecture makes local consumption less (e.g. real estate, electricity, etc.).
Peak load capacity increases (users do not need to build the highest possible load level).
The original utilization rate of only 10-20% of the system efficiency increased.
• Improved reliability if multiple redundant sites are used, which allows us to design cloud computing to meet
business consistency and disaster recovery.
• Extend the resources according to reasonable granularity, close to real-time self-service, without the need for the
user to construct the peak load.
• Performance is monitored, and consistency and loosely coupled architectures are built through web services as a
system interface.
· Because the data is centralized, security is improved and resources concerning to security is increased. However,
loss of specific sensitive data will continue to be of concern and there is lack of concern towards the core storage.
Compared with the traditional system, the security requirements are higher. Part of the reason is that the provider can
focus on the security solution that the user can not provide. However, when the ‘data is distributed over a wider range
and to a larger number of devices’ and the 'multi-terminal system used by unrelated multiple users', the complexity of
security is greatly increased. It is not possible for a user to obtain a security audit log. Part of the development of the
private cloud is derived from the customer's control of the equipment and to avoid loss of safety information.
· Maintenance of cloud computing applications is very simple because it is clear that users no longer need to install
on the device. Once the changes have reached the user, the maintenance will be easier to support and improve.

2.4. Form of cloud computing services

Cloud computing can be considered to include the following levels of services: infrastructure as a service (IaaS),
platform as a service (PaaS) and software as a service (SaaS).

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Infrastructure as a service
Infrastructure-as-a-Service (IaaS) is a service. Consumers can access services from a complete computer infrastructure
over the Internet.
Platform as a Service
Platform-as-a-Service (PaaS) refers to the software development platform as a service to SaaS model submitted to
the user. Therefore, PaaS is also an application of the SaaS model. However, the emergence of PaaS can accelerate the
development of SaaS, especially to speed up the development of SaaS application speed.
Software as a Service
Software-as-a-Service (SaaS) is a way to provide software through the Internet. Users do not need to buy software,
but to rent Web-based software from the provider to manage business activities.

2.5. Features of cloud computing business model

Cloud computing is so fast to develop, and there is a continuous heat because of its clear business model.
Firstly, cloud computing reduces the absolute cost, allowing users to share resources and reduce waste, thus
maximizing resource utilization.
Secondly, through cloud computing, companies can have the flexibility to acquire the corresponding services and get
more agile service.
Thirdly, cloud computing has changed the structure of IT industry. When communications are conducted inside into
the cloud, it has a great impact to the IT department, and provides a higher service capacity to the operators.

2.6. China cloud computing development

Development stage analysis
China's cloud computing industry is divided into three stages: market preparation period, take-off period and
maturity stage. At present, China's cloud computing industry is still in the preparation stage, in the eve of a large
outbreak.
Preparatory phase (2007-2010): mainly focus on technical reserves and conceptualization stages, solutions and
business models are still being tested. Users are still less aware of cloud computing, and successful cases are less. Initial
construction is based on the government public cloud construction.
Take-off stage (2010-2015): the rapid development of industry, ecological environment construction and business
model construction has become the key words of this period, entering the ‘golden opportunity’ in the cloud computing
industry. During this period, successful cases gradually increased, and users understanding and recognition have
continuously improved. More and more manufacturers began to intervene, there are a lot of application solutions, and
users take the initiative to consider putting their own business into the cloud. Public cloud, private cloud, and mixed
cloud are built.

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Application of Cloud Computing in Telecom Operators

Mature stage (2015- ): cloud computing industry chain and ecological environment basically stable; vendor solution
is more mature and stable, providing a wealth of XaaS products. User cloud computing applications achieve good
performance, and become an integral part of IT systems, cloud computing has become an infrastructure.

3. Telecom operators and cloud computing

3.1. Overview
In foreign countries, in addition to providing ISP network services to the public, Orange, O2 and other large
telecommunications companies also serve as a 'cloud computing' service providers. These companies provide IDC
equipment rental and SAAS product application services to different industries. Through their innovative products to
improve services and provide a strong boost to the rapid development and growth of public clouds. Therefore, in the
future, the domestic telecom enterprises will become one of the main beneficiaries of the cloud computing industry,
receiving large revenues from various types of paid services, achieving profit growth, building their own brand of
cloud service system through the analysis of user needs from different domestic industry and cloud computing service
provider research and development.
In the field of telecommunications applications, cloud computing should be 'even more powerful'. Traditional
telecommunications industry re-established; operators who obtain the 3G license have the ability to develop integrated
information services. Foreign large-scale telecom operators have already started the cloud computing construction work,
and have achieved initial success. While China has just started its cloud computing operations, the question on how to
carry out the development, will be further explained and analyzed in this paper.

3.2. Foreign and local telecom operators cloud computing strategy and development status
quo
Comparison of cloud computing business between international and local telecom operators
International telecom operators Local telecom operators
Focus on IaaS solutions and Mainly focus in the promotion of cloud
co mmu nication s collabo ratio n SaaS computing technology applications within
solutions; an addition to the existing the country, such as the business counters
business, and gradually expand into a and call center desktop cloud; external
strategic business, but has not yet formed a planning to the cloud based on the direction
large-scale business and customer base of the development of IDC is currently
a small pilot, yet to have large-scale
commercial

Focus on IaaS solutions and communications collaboration SaaS solutions; an addition to the existing business,
and gradually expand into a strategic business, but has not yet formed a large-scale business and customer base
Mainly focus in the promotion of cloud computing technology applications within the country, such as the business
counters and call center desktop cloud; external planning to the cloud based on the direction of the development of IDC
is currently a small pilot, yet to have large-scale commercial.

Foreign telecom operators cloud computing strategy and the status quo

Cloud computing strategy Development status

AT&T • Supports cloud computing as a • 2008 - launched the first cloud
Managed Hosting service computing service Synaptic Hosting
• Collaborate with ISV to deliver • May 2009 - launched Synaptic
enterprise applications using cloud Storage as a Service
computing models
• November 2009 – launched
• Work with consumer application Synaptic Compute as a Service. Payment
providers to provide cloud-based according to usage, no fixed and minimum
applications for their mobile devices usage payment
• Communicate and collaborate as • 2011 – invested $ 1 billion to
SaaS provide cloud-based solutions for enterprise
users based on global networks
• plans to establish PaaS services
based on IBM WebSphere
• positioning itself as an enterprise
cloud computing service provider

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Verizon • sees cloud computing as part of • 2008 - launched the first cloud
IT's evolution to Everything as a Service computing service Synaptic Hosting
• sees cloud computing as natural • May 2009 - launched Synaptic
evolution of its Managed Hosting business Storage as a Service
• Emphasize that cloud computing • November 2009 – launched
is the service's 'delivery engine' Synaptic Compute as a Service. Payment
according to usage, no fixed and minimum
• Targeting itself as a major global usage payment
provider of managed security services
• 2011 – invested $ 1 billion to
provide cloud-based solutions for enterprise
users based on global networks

BT • sees cloud computing as a key • 2009 agreement with Microsoft

driver of enterprise product strategy to launch Microsoft's online business
for business customers, providing
• Cloud computing is divided c l o u d c o m p u t in g a n d c o l la b o r a t iv e
into three areas: IaaS, SaaS, CaaS communications services to customers
(Communication as a Service)
• Provision of managed IP PBX
• View CaaS as a cloud service and Unified Communications services in
built around real-time communications Europe and the United States using the
(such as voice, video, web conferencing, Cisco HUCS multi-tenant platform
instant messaging, etc.)
• Think of the network as a key
factor in delivering enterprise-class cloud
computing services
• Provide enterprise-class cloud
computing services for end-to-end
performance and availability
Orange • Positions itself as an IT operator • Launch of SaaS solution in 2008
as an extension of the network operator IT Plan, for the SME market, is based on
a monthly fee of 3 per user per month, and
• Packaging network services the solution provides Office productivity
and cloud computing services as end-to- applications, mail applications and business
end hosted services, providing a single applications (SAP, Sage, etc.)
computing resource provisioning portal, a
single help desk, and a single end-to-end • In 2009, IaaS solutions were
SLA launched for flexible computing, upgraded
in 2010, plus self-service portal and
• Divide the cloud into four customer management capabilities, which
components: IaaS, SaaS, Collaboration as a are paid for usage
Service, Security as a Service
• Plan to integrate voice, video

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Application of Cloud Computing in Telecom Operators

T-Systems and end-to-end availability as the core • Started operations in 2004 IaaS
competencies of cloud computing, building cloud computing platform AppCom,
yourself as a trusted cloud computing providing virtual servers, storage, shared
service provider firewalls and virtual local area networks,
etc.
• Standardize the various
components of the cloud computing data • Hosting databases, middleware,
center (server, storage, network equipment SAP, and other standard applications for
and software), automate the operation and enterprise clients on their own AppCom
management of the cloud computing data cloud computing platform
center, optimize the cost structure of the
cloud computing data center, and gradually • Launch managed workbench
enrich the functions of the cloud computing s e r v i c e , b a s e d o n c lo u d c o m p u t in g
platform data center for mission-based workers,
knowledge workers and mobile workers to
• C o l l a b o r a t e w i t h i n d u s t r y provide managed workstations
leaders to create industry cloud solutions
and actively participate in industry cloud • Introduces unified
standards communications services based on cloud
computing, including services such as voice
• Reduce IT costs and dynamic and video conferencing, instant messaging
IT resource management through cloud
computing • Cloud computing consulting
services, including cloud-ready assessment,
• Build energy-efficient green migration of traditional IT models to cloud
data centers through cloud computing computing models and system integration,
technology optimization of cloud computing models
• Build a vendor-independent cloud • More than a dozen cloud
computing solution computing data centers in Europe, North
America, South

Local telecom operators cloud computing strategy and the status quo

Cloud computing strategy Development status

China Mobile • Build a cloud computing platform • Launched the 'Big Cloud'
based on virtualization, centralized program in 2009, launched the 'Big Cloud'
management, automatic scheduling and 1.0 system in 2010
distributed computing, provide a reasonable
allocation of internal resources, and provide • Large scale promote desktop
cloud-based IT services cloud

• Large-scale data processing • A 3-year expansion plan for the

and parallel computing based on cloud data center was officially launched in 2010
computing • In 2011, collaborated with
• Building a cloud-based Xinhua to launch Pangu search based on
management platform to support internal the 'big cloud' platform
and external business needs • At the end of 2011 China Mobile
National Cloud Computing Center was
built in Harbin

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 Wenhao Zhou, et al

China Unicom • Utilizes the basic and secure • Conducted VDC pilot test
and reliable operational capabilities in offices in Beijing, Shanghai,
of the public communication network Guangzhou, Hubei and other
to develop information services, branches
information production, information
• Introduces the DIOS
service, 'cloud computing' services
based on the development of Distributed Intelligent Open
broadband communications and System, which covers Virtual Data
Center VDC, BI System Cloud
cloud computing technology.
Architecture, OSS Cloud Computing,
Cloud Terminal Renovation Call
Center, Future Network and Cloud
Computing Research
• Investing $ 500 million in
Qingdao in 2011 to build a cloud
computing data center
• At the end of 2011, the
'Voyage' strategy was launched

China Telecom • driven by business needs, • 2010 launched the 'Nebula'

combined with the advantages of program, in Guangzhou, Shanghai,
telecommunications resources, Chengdu and Nanchang four
according to market and technology cities carried out cloud computing
maturity to actively promote the field experiments, involving IDC
cloud computing services construction , Business platform, the
ability to open the platform and IT
• To meet the needs of a
applications
large number of small and medium
enterprises of flexible IT resources, • Cloud Computing Research
internal IT system to improve Institute was established in
efficiency and reduce costs Guangdong in 2010
• Jiangsu Telecom pilot IDC
data center service cloud

3.3. Analysis on the Advantages and Disadvantages of Telecom Operators Developing Cloud
Computing

Analysis of advantages of telecom operators to develop cloud computing

a) With resources such as Internet access, IDC (Internet Data Center), mobile communication networks and WiFi
hotspots, these resources are the most basic resource for cloud computing development, on which telecom operators can
create more attractive ICTs (Information Communication Technology) service portfolio.
b) Take full advantage of its global backbone network for cloud computing to provide safe and reliable network
access services, which ensure end-to-end SLA (Service-Level Agreement).
C) Has the experience of providing large-scale communication services to tens of millions of users. The billing
mode is also paid by usage. These experiences can be directly reused to cloud computing services to ensure the
reliability and performance of cloud computing services.
d) The traditional IDC (Internet Data Center) business has been developed for decades, has accumulated a
large enterprise customer base and has won their trust. These customers prefer the telecom operators to provide cloud
computing services.
3.4.2 Analysis of disadvantages of telecom operators to develop cloud computing
a) Cloud computing technology and professionals are less compared to internet companies such as Google and
Amazon, and IT companies such as IBM and Microsoft. New research and development is lacking.

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Application of Cloud Computing in Telecom Operators

b) Rather than being a core business, cloud computing acts as sub-business to traditional telecommunication
business, leading to poor resources.
c) Operating style is biased towards robustness and conservatism, less competitive in the rapid development of
cloud computing field.
d) The complexity of having a complex IT infrastructure including different vendors, different types of servers,
storage and networking equipment, has increased the difficulty of building a cloud computing platform on this
infrastructure.

4. Ideas on local telecom operators to develop cloud computing

4.1. To broaden the scope of business, strengthen capacity
For traditional telecommunications companies, its business scope is limited to telephone communications related
business, and with the development of the Internet and the rapid progress of smart phones, people are no longer confined
to home with a network cable to connect to the Internet. More people prefer to use the smart phone or 3G-enabled Tablet
PC to surf the Internet. Due to the change to portability and trends of wireless and high-speed usage, the traditional
business has long been unable to meet the needs of the users. Broaden of business scope is necessary. Through cloud
computing, businesses can be expanding to mobile internet, entertainment, shopping, payment, office and so on.
Specifically:
1) Increased infrastructure coverage and upgrading of equipment to accommodate more high-speed users.
2) To develop own integrated information service system. Without it, business and operational capacity will greatly
reduce.
3) Develop user resources. Users are the most important element in cloud computing. Through a long period of
development, telecom operators have accumulated and cultivated a large user group. Their needs and user experiences
cannot be ignored. When combined with cloud computing, this user group will be even larger. It is an important matter
to develop and establish the telecom operator within this large user base.
4) To strengthen the ability to integrate the Internet. For Internet and IT companies, the ability of Chinese
operators to integrate the Internet is too weak. Technology and talent must be introduced. The application of cloud
computing can only be achievable with the ability to integrate the internet.

4.2. Establish a platform to nurture ecosystems

In biology, ecosystem is a great concept, and it is same in the case of internet and telecommunications. A scattered
operation is unable to form a good climate for the cloud to develop. More and more enterprises especially Internet
companies have begun to notice the concept of the migration of ecosystems. Platform construction is a long-term
planning and investment, and once the platform is built, it will have its own vitality in which the development of this
platform will have more innovation and development. Telecom operators can cooperate with Internet business to
complement each other. It is very important to create an ecosystem for today’s multi-network integration in which it will
provide enterprises and the overall industry considerable development and vitality.

5. Conclusions
Today, cloud computing development has just begun. Although there are risks for telecom operators to develop cloud
computing, but by seizing the right opportunity and maximizing its use, great benefit will come. Combining the above
analysis and trend on China’s telecom operators developing cloud computing: Firstly, it is recommended to accumulate
experience and the introduction of talent and technology; Secondly, it is recommended to develop the more mature Iaas
and SaaS technology to quickly involve in cloud computing field and gain experience. As for the yet to mature Paas
technology, stong development capability is needed and is associated to greater risks. Once again, it is recommended
to invest in infrastructure construction and expand the physical area of service. Absorb application developers to
provide a platform for the integration of information service. Finally, establish information cloud computing and
telecommunications internet, and the ecosystem of the mobile integrated multi-network.

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