In the recently concluded Cloud World Forum at Brazil, the Spanish Telecommunication giant Telefonica gave a presentation on Cloud Computing. The presenter was giving details on how deep Telefonica are into cloud computing and how they are providing SaaS based value added services using Cloud infrastructure. At the end of the presentation, one participant questioned the representative from Telefonica on their plans of competing with Amazon Web Services (AWS). To the surprise of every one, the executive said that Telefonica would be partnering with Amazon rather than trying to compete with it.

When one looks at the cloud based marketplace, Amazon had already established itself as a leading IaaS service provider using the cloud infrastructure. Telefonica, who are basically into providing connectivity using their under sea cables, can take on Amazon by providing IaaS based cloud infrastructure services. But a large percentage of the market share has already been taken over by Amazon. Instead of trying to devise a strategy to grab the market from Amazon, Telefonica feels that they can concentrate on providing SaaS services by running their services using Amazon web services. This would ensure that Amazon would not cross over to SaaS based service offerings as they would think that most of the SaaS service providers are using their Amazon web service to provide cloud based solutions.

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