Scoop: Sprint to launch cloud services in 4th quarter

The carrier plans to offer hosted collaboration services that will target businesses as it looks to tap into another growth area.

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
3 min read

Sprint Nextel plans to enter the cloud services business in the fourth quarter, an executive told CNET today.

The Overland Park, Kansas, company will offer small and medium-size businesses and large corporations "hosted collaboration services" such as software, security applications and Internet hosting, and also will sell its infrastructure as a service, which can be purchased on an on-demand model, according to Paget Alves, head of Sprint's business markets.

Sprint is following several other major technology players lured in by the promise and opportunity of the cloud, which generally refers to any computing services delivered over an Internet connection. Specific to its industry, Sprint is following Verizon Communications, which this year acquired Terremark for $1.4 billion to get into the cloud business, and AT&T, which has partnered with a number of companies to offer similar services.

"The telcos are in a unique position because our business is centered around the cloud," Alves said in an interview.

Sprint's customers, meanwhile, are expressing interest in the service.

"There's quite a bit of demand," he said. "It's the No. 1 topic of conversation with [chief information officers]."

Sprint has only recently returned to revenue growth, and the company is looking for other potential catalysts as it continues to make slow but steady headway with its core wireless services business. Alves said he sees the cloud business in general growing anywhere between 25 percent and 40 percent a year.

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Unlike Verizon and its Terremark tie-up, Sprint will be offering services using its own capacity from its data center. He said the company has a strong customer base of small and medium-size businesses already using its devices into which it can sell cloud services. Ideally, Sprint can help businesses serve their remote employees and provide more more applications and security as a cloud service, Alves said.

The telcos have traditionally sold a set license for services for each individual a business employs. But with an on-demand model, companies can purchase more Internet capacity or access to security applications when the need arises, and lower its spending when things go quiet.

Alves said Sprint is looking at the public cloud initially, through which a business can access the company's infrastructure on an on-demand basis, similar to Amazon.com's cloud-based computing service. Eventually, Sprint will look at a hybrid model that straddles the public model along with a closed system for more secure applications.

The strategy is also different from what AT&T has embraced, which has been more of a closed model with dedicated real estate on the company's data centers for its large business customers.

Sprint, meanwhile, is also hoping to extend its Sprint ID program, which bundles a number of applications with a set theme such as Walt Disney or ESPN. The company wants its business customers to create their own Sprint ID with a set of business-related apps, Alves said.

For example, the company released a Sprint ID pack with a number of real estate-related applications that different realtors can take and customize with their own logos. Another bundle could include a customer-relationship management app such as Salesforce.com, an application for booking travel, and Open Table for restaurant reservations--which would be ideal for sales representatives in the field, Alves said.

Despite the opportunities, Alves acknowledged that he hasn't seen intense interest in the Sprint ID pack. In his conversations with Lowe's and InterContinental Hotels, the companies are more interested in developing their own applications first.

Still, Alves remains optimistic.

"I see more of these packs coming down the line," he said.