According to a report today over at CNET, Sprint Nextel (NYSE:S, news, filings) is planning to enter the cloud computing race later this year. They plan to leverage their existing data center footprint and their substantial enterprise customer relationships to kick start cloud-based ‘hosted collaboration services’. Those will apparently start with the usual software, security, hosting, and IaaS via a public cloud solution.
Telco entries into the cloud have been a recurring and unsurprising theme this year, and Sprint won’t exactly be early to the game. But this development would be quite notable, because it would be the first sign of substantial new investment in or around their wireline business in quite some time. Capex at the division has been edging below 5% of revenues for some time now, and those revenues have been steadily tapering off as the division has been run for cash and margins rather than growth.
But while the CNET article suggests that Sprint won’t take the M&A route into the cloud like several of its brethren have already this year (Verizon+Terremark, CenturyLink+Savvis, Windstream+Hosted Solutions), I suspect perhaps they might still do some buying. Not necessarily someone large, but smaller technology-focused acquisitions that would help them bring mature products to market quickly.
A migration to cloud-based managed services certainly seems like a logical place to take their wireline business, but it will be some time before any such effort ramps up enough to turn the ship around and start growing again. Let’s wait and see just how much investment they put behind the project.
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