Telecom cloud service launched every working day of the year, according to Ovum research on Telcos in the Cloud. The research showed that most CSPs report annual cloud revenue growth in the 25%-30% range, however these cloud services often replace legacy offers, and so in the short term this substitution effect may mean zero growth or decline in some Telecom operators overall revenues.
Research on Compare the Cloud showed that 79% of communications providers felt they were held back by their current IT systems, but that in 2015 they would focus on building the right foundations for future success. However, mapping to the Ovum research, their legacy infrastructure is holding them back from effectively selling new products as the majority of respondents (82%) said they cannot easily bundle across all products and services – a major disadvantage in such a competitive and fast-moving marketplace.
Not bundling services is a problem. Telecom service providers are missing out on an opportunity to provide small- and medium-sized businesses (SMBs) with cloud services by bundling them with traditional telecom services, according to a survey of 1,311 global SMBs conducted by Coleman Parkes Research for Amdocs. Almost half of SMBs would switch to their primary communications service provider for cloud solutions if offered bundles of traditional and cloud services. Already, these SMBs are looking elsewhere:
- 45 percent of respondents said their organization is getting cloud-based services from a vendor other than their primary service provider.
- 74 percent said they would prefer to receive cloud-based services from their primary service providers.
- 41 percent said they thought they can get better deals from independent cloud-service vendors.
- 68 percent said they are more likely to select a service provider that offers cloud-based services over one that does not.
- 44 percent said they will switch from third-party cloud services providers to their primary communications services providers if offered bundles of traditional and cloud services
- 80 percent of respondents said they want to receive one bill for all the communication services they consume.
The Time to Invest in Cloud is Now.
For many this means improving the areas in the Telecom operator’s IT strategy where it is lagging. In a survey asking CIO’s what areas they are moderately to heavily investing in cloud technology, 96% of telecom operators are investing in a hybrid approach and 99% investing in private cloud technology. These same organizations say hybrid and private cloud are high or critical priorities over the next 12 months.
The cloud technology critical to pushing Telecom operators forward in the cloud is orchestration software. So much so that 77% of global operators and pure-play cloud service providers plan to have orchestration software which brings automation to data center networks by 2017.
Ovum also reported that enterprise cloud buyers are beginning to recognize the power of the network – and the need to orchestrate compute and connectivity. Telecoms Service Providers, like AT&T with its NetBond strategy, are differentiating by providing secure, flexible and increasingly on-demand cloud connectivity. Consequently, Telecom operators are rising in the ranks as preferred cloud service providers – in a few countries they are now the top choice.
Orchestration and Multi-Cloud Needed
“Competing with price discounters such as AWS is a race to the bottom,” says Ovum but there is sustainable value in managing workloads. Telecom operators need two capabilities:
- Cloud orchestration – the ability to orchestrate everything from compute, storage and network, with multiple hypervisor support, infrastructure blueprints, role-based access controls, extensibility and more. At the heart of a successful cloud business is a cloud orchestration solution that supports both an individual business, but also extends to reselling cloud services. Read 5 reasons you need cloud orchestration.
- Multi-cloud management – the ability to easily manage workloads across multiple clouds. Using a solution like Flexiant Concerto can easily give telecom operators a simple, brandable UI that gives them access to their own cloud services as well as others. The result? Maintaining the customer relationship and the ability to integrate this functionality to offer bundled value-add services. Learn more about Flexiant Concerto.
Telecom operators have a well-established customer base. They need to combine the operations and commercial teams to deliver the services customers want. That means using tried and tested, mature solutions that get you to market today… not in two years from now.