Finding the silver lining
The next big opportunity for traditional operators, in these times when voice is no longer king, is coming up with new offers such as cloud services. Telcos that don’t get involved in the race early on may find themselves missing out on valuable revenue opportunities to other ICT service providers.
Operators are in a position to capitalize on cloud services because they own the underlying network infrastructure and they have existing commercial relationships with millions of customers. In general, all customer segments will adopt -- or already use -- some cloud services, whether its enterprise, small business, consumer, education or government. Telcos must provide cloud offerings that align with the specific market being addressed, which have been focused on the enterprise and public segments.
While the cloud opportunity in the enterprise and government sectors is exciting in terms of potential deal size, our experience has shown that the fastest adoption of cloud services is among SMBs where the cloud allows for fast deployment of IT services in a cost-effective and flexible manner. These are the businesses that typically have very little in terms of their IT resources and can benefit the most from the cloud services and applications.
Asia is a huge growth area for enterprise cloud services, representing an estimated 38% of the world’s SMBs. Virtually all SMBs need a “web presence” and simple email. However, the majority of them would also greatly benefit from a range of applications, including some which were traditionally available only to bigger organizations. These are messaging and collaboration, backup and archiving, customer relationship management, and hosted PBX.
SMBs are and will be adopting these cloud services very quickly -- partly because it improves productivity and efficiency, and partly out of necessity since they do not have an internal IT department.
According to industry analysts at IDC, global SMB IT spend was close to $500 billion last year. Every IT player -- from Microsoft and Google to one-person IT consulting shops, hardware vendors, distributors, telcos and web-hosting companies -- are trying to capture both mindshare and dollars that the cloud will bring.
Implementing commercial off-the-shelf automation software designed for cloud services that integrate with existing operations or business support system systems is the fastest way to go to market. Given how rapidly things are evolving, time-to-market is the critical decision-making factor. This approach is also the most flexible, as an operator will be able to adjust pricing and margins with the market along with adding new cloud services.
Therefore, telcos can rapidly and profitably get to market offering cloud services by deploying an open solution built on open multi-tenant standards, security, authentication and license tracking. Such a solution must offer a catalogue of software as a service applications, and provide a flexible framework for easily adding new services and applications. The solution must also enable the syndication or sell-through of external third-party cloud services.
The key to success for a telco is managing a cloud platform that is flexible, extensible and rapidly enables the roll out of new cloud services. Just as automation is critical to profitability for traditional voice and data services, every possible aspect of purchasing, provisioning, billing and self-service management for cloud services should be automated. This is critical to keeping “book to bill” days low, support costs down and being able to rapidly introduce new cloud services. Further automation ensures operational efficiency, thereby creating the opportunity for higher margins.
Over the past few decades, communications have become ubiquitous. Cloud services take this trend to the next level. Documents, contacts, calendars, applications and other IT services are moving into the cloud. Telcos that will be able to leverage their network assets, put the right cloud automation systems in place and aggressively target SMBs will be positioned for success in the years to come. After all, close to 40% of overall IT spend is coming from SMBs and this spend is moving the cloud very quickly.
Jan-Jaap Jager leads the overall sales and operations for Parallels in Asia Pacific