The disruptive potential of the cloud for the communications sector

Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this article to Chris Howarth, Communications Industry lead for Accenture in the UK and Ireland, argues that cloud computing represents a huge new opportunity for telecom operators to take advantage of. 

Many organisations will prioritise strategies to disrupt their industries this year. Digital technology will continue to drive efforts to uproot traditional approaches to service provision; within this sphere, cloud computing has become one of the biggest disruptive forces the communications services sector has ever experienced.

The cloud offers myriad opportunities for communications services providers (CSPs) to transform themselves. However, the competitive landscape means that CSPs globally must be selective when it comes to positioning themselves in the cloud space. The right strategic choices will enable them to significantly enhance their offerings in five key areas: cloud service brokering, vertical offerings, collaborative services, security services, and new market opportunities.

Transforming into a cloud services broker

CSPs have the opportunity to expand their role through cloud, as they look beyond simply selling their own capabilities and services. Instead, many will become cloud service brokers, reselling, integrating and orchestrating a range of in-house and third party cloud offerings, in addition to providing the security around these services.

CSPs’ transformation into cloud service brokers demonstrates their potential to move up the value chain as integrated, single-source information and communication technology providers. At the same time, this move places new demands on communications companies as they will be required to provide some form of professional services to their small to medium-sized business clients, as well as their large enterprise customers.

Clients stand to reap the rewards of this new strategy, with benefits including delivery of the right applications solutions to the right users at the right time, stronger and more consistent governance and security, and lower total costs of ownership.

The expansion of vertical market cloud offerings

Creating and selling bundled cloud service offerings to dedicated vertical markets such as healthcare, finance and transportation is becoming a standard offering for communications companies worldwide. The popularity of these solutions is only expected to grow, particularly as CSPs improve their ability to offer solutions to common vertical industry challenges alongside robust security.

The rise of collaborative services

The strength of CSPs has traditionally been rooted in networks, customer relationships and mobility. These skills will serve them well when it comes to providing compelling cloud solutions by leveraging mobile integration, analytics and location information to forge partnerships and drive innovative services. These services might include for example retail offers and advertising targeted at consumers’ lifestyle and location (in partnership with retailers and consumer goods companies), m-payments (with banks and retailers), and infomobility (with vehicle manufacturers). Indeed, CSPs can provide the building blocks for partner companies to develop and deliver complex end-user offerings, while both companies share the associated risks, costs and revenues.

Organisations are already exploring cloud-enabled collaborative solutions. Innovations to date include cloud-powered video-over-mobile – including search – which has huge potential for content discovery and social media-style unified communications and collaboration (UCC), for both businesses and consumers.  By providing APIs across devices, CSPs will make these video offerings easy for businesses to integrate and use.

Enhanced security services

Security requirement are a key priority for business customers, who are increasingly relying on third-party providers and offerings to meet their security needs. As these third parties are in turn moving to cloud-based solutions, communications companies must ensure that appropriate security controls are in place to meet customer demand as they move towards the cloud services broker model. In future, communications companies will be able to provide security services to customers that previously were too difficult to procure, integrate and maintain.

Enormous market opportunities

Selling business technology services to SMBs remains a people-to-people business, with SMBs often turning to smaller local and niche resellers to meet their needs. This presents an opportunity for communications companies to create portals by opening up their networks and enabling SMBs to access specialist third-party SaaS solutions using a single point-of-contact and billing relationship. The third party cloud application providers would benefit from increased scale and a larger pool of customers, while CSPs would have the ability to sell infrastructure services for customised cloud applications under a revenue-sharing agreement.

The significant demand from SMBs for support in managing, integrating, and maintaining security around cloud applications provides an opportunity for CSPs to sell these third-party SaaS offerings bundled with connectivity. Services such as billing could be sold directly from a communications company’s own internal system and data centre while others, such as standard office productivity applications, can be brokered.

A call to action

The disruptive force of cloud computing presents an opportunity for leaders to drive innovation in new and exciting ways. If successful, CSPs have the potential to transform the culture of their organisations and pave the way for new cloud services. However, to capitalise on this opportunity CSPs will need to move with speed and certainty to incentivise collaboration and innovation. The winners will be those that prioritise the right actions today in order to maximise their ability to affect prices, competition and future cloud services development.

Photo©John Cassidy The Headshot Guy® www.theheadshotguy.co.uk 07768 401009Chris Howarth is the Communications Industry lead for Accenture in the UK and Ireland. He has spent his career working with mobile and fixed line operators, within the UK and globally. He has delivered large scale business and technology transformation programmes within the industry, most recently moving into client account leadership for Accenture’s largest communications industry clients in the UK.  

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