From the Computer Utility to Cloud Computing - To the Cloud: Big Data in a Turbulent World - page 65

amalgamation by choice or necessity. As one industry expert explained,
“a wave of deals is likely to leave only a small handful of bigger and more
diversiied companies standing” (Waters 2012).
Telecommunications Companies Take to the Cloud
For several reasons, telecommunications companies have an enormous
stake in cloud computing and they are well positioned to battle the leaders
in the industry (Babcock 2013b). It is important to understand that these
businesses, especially large companies like AT&T and Verizon, are not
just conduits for other irms' data. Through their subsidiaries, they are
well integrated into the entire digital economy, including content provi-
sion. Consequently, the cloud challenges the entire telecommunications
industry because it provides new ways to offer services that have been part
of the telecommunications industry for years. The challenge deepens as
a handful of integrated conglomerates, the digital giants Google, Apple,
Amazon, Facebook, and Microsoft, solidify their hold on cloud services.
As these irms build towering silos of their own, once-dominant telecom-
munications companies are wondering about their place in the cloud
economy. Rather than sit back and wait for the industry to settle, irms
like AT&T and Verizon have moved quickly to secure a stake. Verizon, in
particular, has become a major leader among cloud-telecommunications
irms by employing a strategy that has been used over and over again in
the industry's history: when the next new thing comes along, buy it. Veri-
zon did so in 2011 by spending $1.4 billion on the major cloud company
Terremark, and by acquiring the cloud-application irm CloudSwitch to
make the total of the company's cloud investments for the year more
than $2 billion. These deals took Verizon to the top of a growing ield
of telecommunications companies that have moved into the cloud and,
in the words of one industry analyst “are prepping Verizon for massive
future growth” (Hickey 2012). As important as it was to purchase these
assets, Verizon's more important challenge was to integrate them into its
other lines of business, especially wireless and FIOS, its bundled Internet
access, telephone, and cable service delivered by iber-optic cable.
For Verizon, the cloud is a key component of a media, telecommunica-
tion, and information convergence strategy that will allow the company