Convergence in the Cloud: The Next-Generation Service Provider
There may be no potential customer more in need of a cloud services transformation than the service provider operation itself. Internally, carrier organizations have long been haunted by the challenges presented by rigid service system siloing and complex capacity planning procedures for each and every service they offer, with very little elasticity on the supply end. It is time for a transformation, and plugging into the cloud can help.
“Service providers and their enterprise customers may be accessing the cloud from different points, but they may do so for similar reasons, and may gain similar benefits. A service provider does not even need to be a public cloud provider to take advantage of these benefits,” Frattura said, “but by building one cloud to cover both internal productivity needs and external service delivery needs, there can be cumulative value on both ends.”
Most service provider systems currently rely on dedicated platforms, operating in separate operational silos, a reality that creates internal complexity, leads to inefficient asset utilization, and ultimately can affect how much providers need to charge for services, as well as how quickly they can deliver them to end users.
Carriers deploy cloud services to help their enterprise customers shift their IT operational and business models to a new agile and cost-effective model so why can't they do the same for themselves? By adopting a cloud computing platform internally, service providers can re-envision service delivery systems such as network control planes and media service platforms as virtualized cloud applications--a notion which potentially could alter relationships with their vendors.
"This has the power to effect a change in how service providers develop new service offers," said David Frattura, senior director of strategy, cloud solutions, at Alcatel-Lucent. "They can go from buying dedicated service systems which only support single services to a model where multiple systems can leverage a pool of computer and storage resources. This enables service platform costs to evolve to a per subscriber licensing software. It's an opportunity to get your vendors to run multiple generations of their systems on the same hardware." For example, as a service provider's service grows in the number of subscribers using it, the provider can elastically expand the services application environment without having to order additional dedicated platforms to meet the increased demand. The provider is allocating resources in a global cloud pool to the services that require increased capacity. Interestingly, a provider can scale down a service that does not require the originally forecasted capacity, freeing it to be leveraged by other services.
"Carriers will need to walk the walk to be convincing to enterprises in the cloud services market," said Caroline Chappell, analyst at large at Heavy Reading. "They themselves need to become more agile than they are today. They need to ask themselves how the Internet companies are doing things to be so agile, and make that transformation happen. It may take a lot of re-architecting , but the cloud evolution could be the tipping point for them."
Migrating internal operations to the cloud can make internal service requests and other processes more dynamic, and improve overall organizational agility and efficiency. At the same time, it can speed response to capacity demands, and keep providers from over-planning-and over-spending--for future capacity demands because they will be able to more dynamically respond to future fluctuations. Finally, new service activation can be done more quickly and affordably. All of these things can increase a service provider's competitiveness.
Camille Mendler, principal analyst at Informa Telecoms & Media, said, "When enterprises are saving up 40, 50, 70 percent savings by moving stuff to the cloud, service providers should see that and take note of what it might do for them, too."
Service providers and their enterprise customers may be accessing the cloud from different points, but they may do so for similar reasons, and may gain similar benefits. A service provider does not even need to be a public cloud provider to take advantage of these benefits, Frattura said, but by building one cloud to cover both internal productivity needs and external service delivery needs, there can be cumulative value on both ends.
"Many service providers are looking at cloud computing in terms of new service offers today. We recommend that service providers examine what cloud computing can mean in terms of improved productivity and compare it to what they expect they will need to adjust to changing market dynamics. A key point to also keep in mind is that public cloud services and productivity- enhancing service transformation strategies can leverage the same computer, storage and network resource pool," Frattura said. "This turns the idea of the private cloud on its ear. It's not two clouds. It's one cloud for all."
