InterCloud Systems, Inc. ICLD, an end-to-end solution provider of value added cloud and managed service based platforms, professional services, applications and infrastructure to both telecommunications companies and enterprises, recently launched a network functions virtualization (NFV) grid to deliver enhanced performance to networking customers.
The product is expected to create a niche market for InterCloud and complement its portfolio of cloud and managed services that handle a significant amount of work on any virtual machine manager and focus on enterprise production workloads. The company’s share price increased more than 50% following the news to close at $4.10 as of May 4, 2015.
InterCloud’s new offering, which will be offered as a Network-as-a-Service (NaaS) , will play a critical role in accelerating InterCloud customers’ shift to the cloud. The NFV will also enable interaction and interoperability with various OSS/BSS platforms, software-defined networking (SDN), and virtualized network function managers.
The Intercloud service will take care of the security and quality of services to ensure the protection of user data. The service will integrate real-time data analytics and open application process interfaces (APIs) for swift application deployment and scaling. We believe that such an offering would help InterCloud build and support its cloud services network.
According to a recent study by Infonetics, the carrier SDN and NFV market is forecast to reach $11 billion by 2018. This presents a significant growth opportunity for Intercloud, going forward.
Moreover, virtualization and cloud computing technologies remain a significant growth area in enterprise IT environments. We believe more clients will be inclined to deploy flexible networking infrastructure, thereby paving the way for strong revenue growth.
With this virtualization process, InterCloud will be better-equipped to provide services on demand designed to meet specific needs of customers. Uptake should also be good since it will enable customers to construct networking infrastructure that is more efficient, flexible and cost effective at the same time. .
However, competition in the information technology services market is intense, particularly with players like Dycom Industries Inc. DY and MasTec, Inc. MTZ, which are determined to build a position in the fast-growing segment.
To conclude we believe that the new product offering will help to grow Intercloud’s sales and attract new customers.
Investors may also consider Box, Inc. BOX, a provider of a cloud-based product platform, which holds a Zacks Rank #2 (Buy).
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