The European Union calls the industry “ICT” — information and communications technologies. The EU regulated the two practices as one while the US was preoccupied with mixing-and-matching Title I with Title II.

But in a bold declaration Monday that may be reaching just a tad beyond the company’s grasp, executives from Nokia announced the immediate launch of a telco-grade cloud for data centers that they said would merge the two industries permanently.

“From today, there are no borders. Telecom and IT are merging,” pronounced Marc Rouanne, Nokia’s executive vice president for mobile broadband, in a morning news conference. “And we are recognizing this and acting. It means we, as an industry, will now act and think differently.”

In the meantime, it appears that Nokia will act and think very much like Nokia. It launched its AirFrame cloud service Monday, marketing it to telcos both as a carrier-grade network for voice and data communications, and as a service that telcos can then resell to their own customers as enterprise clouds.

Revenge of the Dial Tone

It could be the easiest way for the world’s major telecommunications providers, such as AT&T, Verizon and Telefonica — which Nokia mentioned explicitly by name — to retool themselves for a bright new future where they compete head-to-head against Amazon.

While Amazon began promising a storage service tier with “five 9s” of availability (99.999 percent uptime) just last March, Nokia is boasting of the likelihood of “seven 9s.”

“IT operators around the world, more and more, are committed to evolving their infrastructure to an open cloud architecture,” said Rouanne.

“We know how different the telco environment is, compared to traditional IT. Actually, we’re talking about much higher availability requirements — five 9s and, more recently, six and seven 9s. We’re talking about real time applications, low latency, massive data throughput, strong industry regulation and so forth. This is a whole new world for cloud solutions.”

If this new realm of computing may indeed be regulated as a utility, then think of cloud computing capability (or “compute” for short) as a liquid commodity, like petroleum. Uptime capacity is analogous to the amount of refinement applied to the product, and throughput is analogous to yield.

Nokia and Alcatel-Lucent (which Nokia is in the process of acquiring) have talked about a global computing environment where the refinement and yield are both greater. Their product is less crude, and more premium. Their customers are on the premium tier. They require 10 gigabits per second or greater constant throughput, with latencies transcending the millisecond mark.

But to paraphrase a song by the great blues singer Johnny Jones, their customers have customers, too.

Maybe they don’t need seven 9s or 10 gbps. But if premium tier service were resold to this second customer group, like high-octane gasoline at the fuel pump, it could become an attractive alternative — and maybe, if used wisely, more efficient and cost-effective than the “regular” grade.

Nokia’s AirFrame service will be comprised of hardware — servers and switches, plus high-grade storage coming in September, mounted on racks whose management units have open APIs. The servers will follow the Open Compute “bare metal” architecture first advanced by Facebook.

The software component of AirFrame will be primarily compatible with OpenStack. This eliminates any frills on the infrastructure level that would prohibit AirFrame from being implemented in hybrid cloud environments where OpenStack is already installed on-premise.

Disrupting the Disruptor

The strategy of reselling telco-grade cloud service to enterprises as cloud-based data centers may make the transition to IP-based communications more cost-effective for telcos as well. And if it works, then anyone who still thinks the cloud market has narrowed down to a two-horse race may want to make a trip back to the betting window.

Of course, enabling this premium-grade resale market means maintaining something between telecom and IT — if not a barrier, then at least some kind of locking turnstile. Which may be why, when questioned Monday about whether Nokia will begin treating not just mobile operators but also enterprises as one-to-one customers, Marc Rouanne hedged just a bit.

“What we are launching today is an offering that is targeting service providers... converged, fixed mobile operators and service providers, some of them delivering integrated Wi-Fi and other things,” said Rouanne.

“What is interesting is that, when we blend the capabilities of the two worlds — the IT and telco — it allows our customers that are serving a lot of enterprise services to start thinking about mixing different applications and different requirements, on the same type of infrastructure. That will open, of course, new ways of delivering the services for them and for us.”

When Nokia first sold off its handheld devices unit to Microsoft, analysts saw the move as the swan song of one of the world’s great brands.

But with the deadweight now having been fully shifted onto Microsoft’s shoulders, Nokia has been free to innovate in a market whose margin potential is much, much higher. If Nokia’s plan plays out as its executives promise, by this time next year, it may be Microsoft with one eye looking over its shoulders — across the ocean, towards Finland.

Simpler Media Group, 2015