We've taken all of this into deep consideration, and I would tell you that as we look back, we've made some pretty interesting acquisitions over the last couple of years. But one that really kind of flew below the radar was our acquisition of a small company called CloudSwitch. The core kernel of their IP for us was very, very important and is an essential element in the foundation of our next-generation cloud platform. We look at some of the virtues of the Amazon model and ask: "How do you create a very simple, frictionless environment to enable very fast spin-up of servers, very fast instances of an application, up and down really quickly?" That has a lot of implications to it. And as we take you more deeply through precisely what we're doing here, here's what I would tell you. How do you gain the value of low friction, fast, very cost-effective cloud computing, with resiliency, scalability, enterprise-grade, enterprise orientation to the service and support model? Imagine if you could cover all of that ground. What would that look like? How important would that be to the marketplace? We believe we are very meaningfully down that path. We have done it by flipping the model 180 degrees.
That's my tease for you. That's how I'll keep you coming back. [Stratton is referring to upcoming cloud announcements that he declined to detail.] But this is for us very important. We look at serving the enterprise client, look at where the workloads are that they haven't moved yet. When we talk about 70 percent of cloud being generated in the small to mids, it is still so early in the game and there is still so much in front of us in terms of these sort of wholesale movement of work here. It starts with the obvious sort of test-dev stuff, the stuff that kind of peaks and then goes off peak, the utility computing stuff....
Today there's a lot of stuff on Amazon that's sort of the fringe or the side cases of IT. Is it your belief that what you're planning here will start to drive more of the standard work of IT into the cloud?
Yes, absolutely. As you know, not every enterprise application is a perfect candidate for cloud. And that's OK. But a lot are. As you think about the extended value proposition for the business owner in terms of what else it enables for their workforce, for their workflow, all of those downstream process opportunities, these have to be the incentives to move. But what we must do is remove the barriers. And the barriers are fairly high right now. We look at it first and foremost with my own business. My CIO is working very closely in partnership with my cloud team to move thousands of VMs into our environment. So we're going dogfooding, if you will, a little bit, as we go here, to learn about the specific pain points and to make sure we've addressed them very carefully. But yes, we believe that as you remove those barriers you will begin to see much more [movement into cloud].
Your goal is to change the comfort level?
Yes, sure. You've got to replicate to a degree the functionality and the environment that was offered and supported internally. I also have to care for a range of scenarios here. Private data center, private cloud, fully public, and everything on that continuum. How can I create a model that is flexible enough that I can really move in? I can go in as opposed to it's always coming out.
You're talking a virtual private cloud type thing?
One of the things that we see people struggling with is dealing with so many cloud providers and losing that integration that was such a hard-fought thing over the decades. Is there a role for someone like Verizon as sort of the front end to the cloud for multiple things?
We think there is. I don't think we have yet fully vetted that strategy.
Billing, management, security, access, all of the things people need no matter which cloud provider they're dealing with. Is there an opportunity to create an ecosystem that says: "I don't really care which of these SaaS providers you work with, but you can work with them through me. Small, large, I can integrate billing, I can do all kinds of things." Is that an opportunity?
Yes, it is. I'll come at it in a little bit of a different way but it leads to the same outcome. Each of my business units needs to carry its own weight, needs to be viable on its own, needs to operate and compete in an open environment. I remember about six months after I came into this role, an analyst said in some form: "How's it going for Terremark? It must be tough for those guys now that you've got them and you require the Verizon network in order to use their colo and cloud capabilities." I said: "Whoa, quite the opposite." We have a network-agnostic position inside of our Terremark business and we actually went out to our Verizon previously-owned-and-operated data centers and introduced that agnostic approach because the centers have to stand on their own. Specifically, the cloud must stand on its own. The Hughes business that we acquired last year from a machine-to-machine perspective, another pretty good area, it's network-agnostic. Why? It's a global business. I don't have wireless networks outside the United States. Not to mention that several of our clients there use competing networks today. That's perfectly fine.