Bill Barney, Global Cloud Xchange Company Strategy: Capturing tomorrow’s digital stars
Reliance Globalcom made its intentions clear by rebranding to Global Cloud Xchange. CEO Bill Barney explains how cloud can help carriers capture the next generation of OTT players.
It is rare to read or hear anything about the cloud without it being accompanied by the word “enabler”.
For carriers, there is increasing evidence that cloud truly is an enabler. It is enabling them a direct shot at new revenue streams from the enterprise and OTT segments, without having to stray too far from what they know best: building and operating networks. In the last few months, the likes of Telstra, NTT Communications and Level 3 have all made major announcements in the cloud space.
However, if one company is to encapsulate the growing industry faith in cloud, it is Reliance Globalcom, which stated its intentions in the market by rebranding as Global Cloud Xchange (GCX) in March. The company, which is led by former Pacnet CEO Bill Barney, is embarking on an aggressive network expansion before it deploys a new cloud platform designed to tap into the global demand from enterprise and new media organisations.
GCX presently has two major network expansions on the way. The first is a new trans-Pacific cable linking Tokyo to Silicon Valley in the US, which was announced in March. The Pacific Cloud Xchange (PCX) cable will be a four-fibre-pair system deployed with 100G technology and is expected to be ready for service in 2015.
In June, it also revealed plans to deploy a new direct route between Mumbai in India and Singapore, known as ICX. The route is designed to bypass outage-prone terrestrial routes between Mumbai and Chennai. It will again comprise a four-fibre-pair system with 100G technology, and will interconnect with GCX’s Falcon, Hawk and FA-1 systems, providing connectivity on to the Middle East, Europe and to the east coast of the US.
Vendors and additional partners for the ICX subsea cable are being finalised, with the supply contract expected to be awarded by the third quarter of 2014.
GCX CEO Bill Barney describes both projects as “filling gaps”. Once both are complete, he says the company will join a select group of carriers able to offer a complete ring around the globe. Ultimately, he says the original vision of FLAG (fibre-optic link around the globe) has been reborn.
The difference between FLAG and now, says Barney, is that the operator has moved to more of a UNITY-style model, after the trans-Pacific cable launched by a consortium of carriers and Google in 2010.
“You build five fibres and sell three off. Perhaps to non-telcos,” adds Barney.
Telco and tech territory
The infrastructure deployments are essentially completing a footprint for GCX to implement the second phase of its strategy. GCX has revealed exclusively to Capacity that in September it will launch three pilot cloud platforms in Europe, Asia and the US. Barney describes the pilots as essentially being “mini ecosystems” that will initially enable up to 60 cloud providers to connect through Ethernet or MPLS services.
“From a wholesale perspective, it is interesting as it creates a new ‘meet me room’ for large wholesalers. It’s a new way to build an ecosystem. In the future we won’t be just doing IP transit,” says Barney. “I think it’s about how you build the ecosystem for the wholesale providers, and how you take advantage of that with the retail guys.”
Barney estimates that 40% of the company’s revenues will derive from cloud by 2018. His confidence in cloud comes from a strong belief that it does not belong solely in the hands of the tech companies. It is in equal measures a telco play: “The bricks and mortar behind how you actually execute a cloud strategy is simple telco stuff, wrapped around a user interface. It’s not radical,” he says. “If you get it right, you go head-to-head with the likes of Dell or Amazon without having to do much.”
He believes cloud is essentially made up of four ingredients; software, fibre, power and space. “If you can play in two of those spaces you are in a good spot. If you can find a way of orchestrating the other two, then you can make it work,” he says.
New media, new customers
But while capturing the enterprise segment through cloud is becoming a familiar story in the carrier segment, GCX’s pursuit of the up-and-coming stars of the new media world is not.
Barney has targeted the “guys that don’t know who they are going to be in a few years’ time”. In other words the OTT players whose traffic could explode exponentially. So where do you go about searching for the next Facebook? The most obvious place is Silicon Valley, which is precisely where Barney spent two years researching potential customers.
As a result, Barney is able to offer a fascinating insight into some of the upcoming trends in the OTT segment. Enterprise-tailored social media, for example, is an area he predicts will experience significant growth over the coming years.
“How do you create social media within an organisation, but not release confidential information out into the network? The next generation starting at companies do not want to use an email system; they want to be able to communicate in a more collaborative way,” he explains. “What we are seeing therefore is the development of the private social network. Twitter, for example, is looking at a closed-group option.”
Be it an enterprise-grade Dropbox or Twitter, businesses today essentially want to have tailored versions of everything the consumer has, says Barney. The enterprise software space meanwhile is exploding with cloud startups looking to capture the SME market and ultimately take the fight to the likes of SAP and Oracle.
“We can help facilitate these guys [the cloud startups]. I can make it inexpensive for these companies to operate in Hong Kong or the Middle East, where they can go to test the market,” says Barney.
Barney believes it will be a mix of partnerships with the existing major OTT players, the likes of Facebook and Google, as well as capturing the booming startup market that will bring carriers success in the cloud space. He recounts a period at his former company, Pacnet, when the carrier became one of the first to partner with Google in Asia.
“We sold Google their first circuit [in the region]. And then essentially we sold them everything we had in Asia for five years. It does work. You have to put yourself in that stream of new companies coming out and you have to be relevant to them,” he says. “We need a lot of companies to be successful, and build up that next generation of tech startups. We would love to be their facilitators, and grow alongside this next generation.”
Barney concedes that for every success, there might be two or three failures. But, he says, that is simply part of the excitement: “If you get a few right, they love you for looking out for them. You have to take risks.”
Accept carriers are not tech innovators
Growing alongside startups is also GCX’s policy when it comes to the technology behind its new cloud platform, with the company investing in an undisclosed cloud technology startup to develop its cloud platform. If history has taught the telecoms industry anything, says Barney, it is that carriers owning technology companies is not always conducive to innovation.
“In the asset-heavy industry of telecoms, everything is structured. We are a factory: we build and deliver bandwidth. It slows you from an innovation standpoint,” says Barney. “The one thing about telecoms companies is we destroy tech companies. This was one of the mistakes telcos made during the dot.com boom.”
Instead, he says, it is about establishing effective partnership models, which is why the focus of GCX moving forward will be on developing an ecosystem.
“We deliver bandwidth but we are not necessarily set up to do the type of things that cloud-based applications want. As we continue to play in this space, it will be more about developing an ecosystem,” he says. “We are going to buy shares in a lot of these companies, as for us, if we control them we know we won’t necessarily make them better.”
GCX will also need to strengthen its data centre footprint to accommodate the global roll-out of its cloud platform. Unlike Barney’s former company Pacnet, which has invested heavily in its data centre presence across Asia-Pacific, the company is looking to cast its net wide.
“We are buying assets globally,” he says, before confirming that the company is exploring many options. “We are not going to be a big player in the data centre space. We are looking to work with the small data centre guys, and bring network to the companies which don’t have networks,” says Barney.
Expanding its presence globally is critical to the company’s plans to support companies in emerging markets, where he sees fierce potential for cloud: “Emerging markets are where I believe cloud will be most effective. The average user in these emerging markets does not have a high income, so cloud is how you sell them computers, e.g. low cost tablets. Shops in places such as Lagos in Nigeria will be able to run IT infrastructure 80-90% cheaper.”
Following the launch of its three pilot cloud ecosystems, Barney reveals the company plans to add another 17 by the end of 2015. It will be a quick turnaround, but one that he believes reflects the growth of the market.
“To be a first mover in cloud in emerging markets is all going to come down to execution,” he says.