Looking to expand revenues, Brazilian carrier Oi announced its cloud strategy dubbed “Oi Smart Cloud.” The offering is designed to complement the carrier’s enterprise portfolio, which currently includes fixed and mobile telephony, connectivity and IT solutions.
“Within three years, we expect to double data center revenues driven by Smart Cloud,” said Maurício Vergani, head of corporate business at Oi.
The carrier has invested $17.25 million into the new cloud initiative for servers, storage and virtual machine infrastructure. Vergani said the carrier does not expect to need any further investments as its current eight data centers should be able to support the expected demand.
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Vergani did not comment on what impact the cloud offering would have on enterprise or the company’s total revenues, but he noted Oi hopes IT services will become more relevant. “We plan the enterprise vertical to grow faster compared to the average market, and telecom to increase 7% each year for the next fiver years,” Vergani said.
To reach this goal, Oi is targeting 15,000 of Brazil’s biggest enterprises, many of which are currently clients.
According to a study published by market research firm Infonetics Research, embracing enterprise-focused services has been a key strategy for several telecom operators around the globe. The study showed that 70% of operators are investing in cloud services in anticipation of growing demand.
Oi will face a number of strong competitors in its attempt to become an important player in the cloud and IT space. Recently, Amazon Web Services (AWS) launched the first South American global cloud computing platform in São Paulo, focusing on South America-based businesses and global companies with customers in the region.
Microsoft is also investing in Brazil in an attempt to become a cloud computing provider. The company has confirmed the launch of a data center in the country to provide and support cloud computing services for Brazil and possibly South Cone small and mid-size enterprises. Microsoft currently serves the market with U.S.-based infrastructure.
Oi’s Vergani noted that a recent IDC report projected the Brazilian market for public cloud services could reach $578 million by 2014, with an annual growth rate of 70%.
While Oi is just entering the market, IDC noted that the Latin American cloud computing space is already in need of consolidation. The firm cited the segments lack of automation and measurement in achieving an infrastructure-as-a-service model.
OI Smart Cloud: the management center in São Paulo
Future steps
As for Oi’s plans, the carrier said it plans to add collaboration and unified communications solutions to its platform this year. The third and last phase of its program will involve the application layer, where the carrier said it will sale software as a service through cloud computing. “We have scheduled a series of launches, including machine-to-machine platform, back up networks, LAN and WLAN solutions, among others,” noted Vergani.
Although it seems to be an initial move, it is important to remember that Brasil Telecom, before Oi’s purchase, had a very strong arm in the enterprise market. Indeed, Oi continued to offer data center services, hosting and collocation, but without improvements in solutions ecosystem. Oi currently counts eight data centers in Brazil, with two located in Brasília, and the remaining centers in Rio de Janeiro, São Paulo, Fortaleza, Belo Horizonte, Porto Alegre and Curitiba.
