Since the rise of over-the-top streaming services, telecom operators have been battling industry disruption and decreasing revenue streams. Now that ubiquitous connectivity is a commodity, telcos need to evolve beyond network connectivity and provide distinctive service offerings beyond their core portfolio. The application of cloud technology in telecom industry can surely help here.
In this article you’ll learn how telcos can leverage the power of cloud to accelerate their transformation into digital services providers and meet modern enterprise ICT needs:
- Impact of cloud computing on telecom industry
- New business opportunities and revenue streams
- Cloud technology in telecom industry: Levels of adoption
- Telcos’ role in the cloud ecosystem
- Telecom cloud services have lots more to offer
Impact of cloud computing on telecom industry
The cloud-enabled world unlocks a variety of new opportunities and hence revenue streams for telecom operators. One way to benefit is to repackage existing hosting and networking capabilities and deliver cloud infrastructure and storage services, combining cloud and telecom transformation into a powerful combo. Telcos can also team up with cloud software development companies to build industry-specific solutions for highly regulated sectors like healthcare or financial services.
Telecoms can become cloud brokers, aggregating public cloud services and ensuring quality of service. Or they can choose to become service enablers and complement their core offering with other assets like data analytics and APIs. This will enable them to further provide these enriched capabilities to third parties or use them to enhance their own telecom cloud services.
New business opportunities and revenue streams
Heralding a change in how ICT resources are provided, cloud computing for telecom opens up new opportunities to create and deliver business value as well as increase profitability. Through its utmost convenience and flexible pricing models, cloud enables telecoms to become more agile and competitive in the new environment.
Researchers have identified six transformative cloud enablers that drive business innovation and help either reduce cost or generate extra revenue.
One of the greatest advantages that cloud has to offer is the substantial IT cost savings. Cloud infrastructures are innately cost effective, thanks to their highly flexible, pay-as-you-go models. By using a network of remote servers, businesses are able to rent and pay for exactly the resources they need and significantly reduce overhead expenses like software and hardware updates, backup systems, data storage, and more. More than 31 percent of executives surveyed cited cloud’s ability to reduce fixed IT costs and shift to a more variable ‘pay as you go’ cost structure as a top benefit.
More than 31 percent of executives surveyed cited cloud’s ability to reduce fixed IT costs and shift to a more variable ‘pay as you go’ cost structure as a top benefit.
Cloud scalability means the ability to stay flexible and adapt to fluctuating storage and infrastructure needs by automatically provisioning and deprovisioning resources. Cloud computing for telecom enables businesses to strategically upscale and downscale their operations to maximize growth opportunities and capitalize on them, while the elastic nature of cloud allows for dynamic accommodation of tasks, like traffic spikes or high-performance workloads.
Driven by shifting customer demands, market conditions are constantly changing too. The ability to quickly respond to varying consumer needs becomes a key differentiator for businesses. Cloud also supports innovation and enables operators to easily revamp and update their cloud-based telecom services. The quick shift towards new market opportunities always means the competitive advantage and results in higher profitability due to the influx of new customers.
Although less recognized than some of the other enablers, masked complexity offers the advantage of hiding some operational intricacies from end users. For example, maintenance works and upgrades can be performed in the background. This helps a company increase the level of sophistication for its services and products without burdening the customers with technical details. Even the shortest downtime leads to the financial loss, pointing out the importance of masked complexity. Companies that ensure stable and flawless operations are always paid back with customer loyalty.
With its extended capacity and computing power, cloud can help businesses better address fragmented user preferences. Cloud-enabled context variability refers to the ability of telecoms to leverage features like location, personal attributes, and analytics, to customize services and products, and deliver more user-centric experiences.
By capitalizing on cloud-enabled agility and reach, forward-thinking carriers can build expansive ecosystems and seize more lucrative opportunities. Industry leaders across sectors and domains recognize cloud’s potential as an innovation catalyst and use cloud-based telecom services and technologies to roll out new offerings.
Cloud business enablers can drive CSP industry imperatives
Cloud technology in telecom industry: Levels of adoption
Speaking of cloud adoption, it’s important to remember that this is not an all-or-nothing venture. Depending on their business strategy, technological maturity, competitive landscape, and other factors, telcos can find themselves on different levels of a cloud and telecom transformation journey.
Generally, telecom operators can fall into any of the three archetypes that characterize the extent to which their use of cloud impacts on value chains. These archetypes include optimizers, innovators, and disruptors.
The Cloud Enablement Framework identifies three organizational archetypes based on the extent to which a CSP enhances, extends or invents customer value propositions – and improves, transforms or creates its role in the industry value chain.
Cloud enablement framework
Optimizers leverage cloud to improve their operational efficiency, expand the value of their services, and enhance customer experiences. Telecoms that embrace this level of cloud adoption can optimize their connectivity offering in line with their customers’ needs. By using caching, data acceleration, and other network-based methods, they can deliver connectivity in a smarter way.
Innovators tap the potential of cloud to expand value propositions and open new revenue streams. To do that, they can transform their roles within value chains and enter adjacent markets and industries, gaining a competitive advantage. As CSPs already provide enterprises with bandwidth, they can extend their offering with collaboration services, workflow management, and enterprise resource management through partnerships with third parties.
As the name suggests, disruptors invent radically different value propositions, create new services, and even generate new customer needs. To become a disruptor, CSPs can leverage their most valuable resource — unique customer information — and couple it with other distinctive assets to create new services and gain first-mover advantage. Discover how telcos can accelerate their digital transformation and evolve into customer-centric ecosystems.
Discover how telcos can accelerate their digital transformation and evolve into customer-centric ecosystems.
Telcos’ role in the cloud ecosystem
Given their control over mission-critical network assets, CSPs are well positioned to become key players on the B2B cloud market. By leveraging telecom cloud computing capabilities, telecom operators can significantly enhance their telecom software and develop new, customer-oriented services that will take them beyond being a commodity provider and cement their competitive advantage.
Optimizer use case: Telefonica O2 Ireland
Telefonica O2 Ireland has rolled out its new hosted IP telephony service called O2 Unified Communications. Aimed at large businesses and public sector organizations, the platform seamlessly combines fixed and mobile telephone, voice mail, instant messaging and videoconferencing into a single managed cloud-based service.
Thanks to the service, users are able to communicate in real time from any location on their device of choice — landlines, smartphones, PCs, laptops, or tablets. This capability is very useful for integrating onsite workers and telecommuters with no additional complexity.
Innovator use case: AT&T Healthcare Community Online
To help healthcare organizations improve operational efficiencies and streamline patient care, CSPs can leverage cloud to provide flexible and highly secure storage for sensitive health data.
AT&T, for one, has launched a cloud-based health information exchange platform to drive collaboration across the entire healthcare continuum. By integrating patient data from various sources, the solution provides a unified patient view as well as real-time access to patient information and relevant eHealth applications for faster and more accurate diagnosis at the point of care.
Disruptor use case: Verizon Digital Media Services
Always at the forefront of technological disruption, Verizon took a major step to unleash the power of telecom cloud computing in enhancing cybersecurity and protecting web solutions. To that end, Verizon Digital Media Services launched a cloud-based web application firewall (WAF) that set a new standard for reaction time to attacks.
When a new exploit is detected, WAF rule sets can be deployed worldwide within minutes. With its on-demand scalability and always-on capabilities, a cloud-based WAF offers more stringent control and enhanced security to its customers.
Telecom cloud services have lots more to offer
The role of cloud computing in telecom industry is becoming increasingly prominent. Due to the ownership of networks upon which cloud-based applications are delivered, telecoms are uniquely positioned to play a strategic role in the new market and offer value-added services to reinvigorate revenue streams.
Contact our experts to learn more about how to streamline your migration to a cloud-based network architecture and implement cloud-based telecom services to accelerate the development of new business models.