Sprint Will Offer Cloud Services in Fourth Quarter

Sprint Nextel (News - Alert) will enter the cloud services business in the fourth quarter, according to a company executive who spoke with CNET about the plans. Sprint will be offering the managed services to small and medium-sized businesses as well as large corporations, according to Paget Alves (News - Alert), head of Sprint's business markets.

The “hosted collaboration services” will include software, security applications and Internet hosting. Sprint will also sell infrastructure as a service (IaaS), which will be available through an on-demand purchasing model. The company is following the lead of a number of its competitors which have made plays in the cloud space, including Verizon Communications and AT&T (News - Alert). Verizon acquired Terremark in a $1.4 billion deal this year to enter the cloud space, while AT&T has partnered with several companies in a bid to offer similar managed services.

“The telcos are in a unique position because our business is centered around the cloud,” said Alves in a CNET interview. He added that the company's customers are also expressing interest in cloud services. “There's quite a bit of demand. It's the number one topic of conversation with [chief information officers].”

Sprint plans to offer services using its own capacity via its data center, unlike the Verizon/Terremark deal. Sprint's strong customer base of SMBs already using its devices is in an ideal setup to receive cloud services, and the company can aid businesses in serving their remote employees as well as provide more applications and security as cloud services.

Via the on-demand model, companies will be able to purchase more Internet capacity or access to security applications as their needs change, while reducing services to lower spending during slower periods. This is a sharp contrast to the traditional telco model in which a set license for services was sold for each individual employed by the customer.

Sprint is looking at public cloud services initially, according to Alves. Businesses will be able to access a company's infrastructure on an on-demand basis, similar to Amazon.com's (News - Alert) cloud-based computing service. He added that the company will eventually examine a hybrid model offering a blend of public and private services, as well as a closed system for more secure applications. This is in contrast to AT&T's strategy of a closed model with dedicated real estate at the company's data centers for large business customers.

Alves said Sprint is also hoping to expand the Sprint ID program, which bundles applications with a set theme like Walt Disney (News - Alert) or ESPN. Customers would be able to create their own Sprint ID with a set of business-related applications.

Sprint recently returned to revenue growth, and is looking for other potential growth opportunities as it makes headway with its core wireless services business. Alves said the cloud business in general could grow anywhere from 25 to 40 percent a year.

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