Burgeoning business demand for cloud-based services will force greater alliances between IT services companies and telcos, according to a panel at PTC ’10 or the Pacific Telecommunications Council held in Hawaii recently.

Discussing the future of apps in the cloud, IBM enterprise initiatives VP Mike Hill and Salesforce.com director platform research Peter Coffee said the line between competing and cooperating was becoming blurred, with the new buzzword of PTC ’10 emerging as ‘coopetition’.

Hill said that IBM and telcos had clashed in the enterprise market, but a new relationship was now emerging.

“The only place we tend to have some level of friction with service providers is when you’re up in to the largest organisations,” he said. “Quite frankly, when we get together on those large organisations it’s pretty clear we have a different set of core competencies … although the service providers will often say ‘you’re one of our largest competitors’, I never see them that way because I’m developing a whole different set of competencies in our business than they are.”

“We see service providers as a huge platform opportunity for us here – because we’re going to take the platforms that we build in IBM to deliver these services, and we’re going to pitch and sell it to service providers so they have the opportunity to white label services from us; or even white label to start with so they don’t have to invest capital upfront but then as it starts to go, carriers like, oftentimes, to run their own services,” he said. “We see it as a highly synergistic play.”

Coffee added that Salesforce.com had already benefitted from a working partnership with telcos which proved to be a ‘win-win’.

“We have our services being re-sold by telecom providers who want to take advantage of the fact they already have more than their foot in the door, they’re already completely inside the door as a small business service-suite provider,” he said.

“For example British Telecom packages and sells our CRM application as a service as part of BT’s small enterprise suite, and there’s absolutely no reason why we wouldn’t want to foster that because that means their skills, their knowledge of the local marketplace, local business customs, local regulations, becomes a leveraging factor for us to do what we do, which is to provide enterprise functionality, and then they make it relevant to the local market. Telecoms providers have tremendous opportunity there to exploit – in a good way – their knowledge of the local market,” Coffee said.

Another advantage of cloud based apps, according to Coffee, is that market failures tended to be quick and painless. “You won’t be stepping into a marketplace over a very long period of time, delayed by capital budgeting, fearful of the possibility of winding up paying for something that doesn’t work out – people will do ten things now if only one is likely to succeed. Because the cost of failure has now become insignificant.”

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