Carrier Cloud: "The most important and sustainable revenue opportunity since voice"

The good news for carriers is that cloud computing is the most important and sustainable revenue opportunity since voice. Not only that, by delivering next generation IT through the next generation network (NGN), carriers could become the leading channel in the cloud computing business, with unique competences and valuable assets.

Carriers are in a unique position to take some strong decisions about leading the cloud market so businesses will follow them – instead of following pure IT players which do not provide, as of today, a whole, end-to-end business solution.

Firstly, we need to forget talking about the ‘classical’ concepts of Software as a Service, Platform as a Service, Infrastructure as a Service, Public Cloud, Private Cloud, Hybrid Cloud, or whatever new cloud deployment model someone might be thinking about right now. We need to start thinking about ‘Carrier Cloud’.

What is needed is a cloud concept where we do not consider technology silos or deployment model silos, but a concept where we think about services that will solve business needs for different customer segmentations and verticals. Essentially, it means there is no need to internally create or deploy cloud services. The Carrier Cloud concept refers to the capability of providing many state-of-the-art ‘actionable’ cloud services to customers, without the need to make huge investments in time and money, in order to make those cloud services available to customers.

Hide the Technical Complexities

In an economic environment where a recession is hitting all kinds of businesses and organisations hard, there is a strong and urgent need for new ways of doing things. And there is a demand for allowing businesses to focus on their core business, and outsource IT and even business processes.

To solve this issue, carriers can create their own cloud services offering and marketplace for their customers, and populate them with third-party services, often with degrees of customisation for each carrier. However, the services are ultimately provisioned by different service providers.

That is the same way carriers have succeeded in their respective markets for many years; hiding technical complexities from customers as much as possible and delivering service guarantee and quality. And all of that at a monthly fee from the lowest level consumer with a pre-paid mobile phone, to the largest organisations. Furthermore, designing services offerings for each customer segment or business vertical, not a ‘one size fits all’ approach.

For a carrier, it takes an average of 12 to 18 months to create and deploy a new service if deployed from scratch. In a carrier cloud model, new services (several of them at the same time) can be deployed in as quickly as six weeks, with minimum investments (CAPEX) and almost no ongoing maintenance costs (OPEX).

Most of the leading services will be coming from specialised third parties with the added value provided by the carrier. These include features such as single point of purchasing, monthly fees, single monthly invoices, end-to-end SLAs, end-to-end security, full carrier infrastructure availability and carrier customer care services.

Telefonica’s Aplicateca

One early example of a carrier cloud solution is Telefonica’s Aplicateca business applications store for SMEs, provided by NEC. It’s a globally scalable cloud service that provides additional ‘Over the Top’ revenues. This multi-tenancy platform allows multiple business customers to subscribe to and use a variety of applications and services on the same infrastructure. Those customers can access all of the applications and services they wish by using just one window.

Since the launch of Aplicateca, end users have been eagerly utilising a variety of applications such as CRM, billing, video-conferencing, GPS tracking and fleet management applications at low monthly fees. And they have enjoyed finding their requests for new applications being addressed quickly. It has evolved into a strategic channel to quickly launch and commercialise Telefonica and its parties’ services for SMEs with an end-to-end support scheme.

Telefonica has already launched Aplicateca service in Spain, Argentina and other markets with a strategic goal to continue deploying this business model in the medium term in the most relevant operators and markets where Telefonica is present.

Enhancing the IT Department

But whose responsibility is it, when it comes to getting the best out of the cloud? Can the enterprise IT manager basically sit back and let the cloud service provider take care of everything? Or do they then risk taking their eyes off the ball and perhaps even the possibility of becoming redundant?

It’s the service provider that should provide it. IT managers will have to manage the service, not the resources, delivery process etc.  IT managers will be much more business oriented, and will be able to add more value from a business strategy perspective, helping to improve business processes instead of managing IT operations and resources.

In fact, this does not mean a reduction in IT resources at all, but rather it will enhance IT’s position within the organisation, allowing it to fully integrate with the business, strategy and business efficiencies. IT will become more relevant for the business and the IT productivity and efficiency will increase.

Manuel Gallo

But IT will no longer be the team of technicians who should make things happen, provide support to internal users and be the ones to blame for a system failure. IT will be more of a business technology consulting department, providing the right advice about how the technology can help the business, without the psychological barrier of ‘if I propose something, I will personally have to do it’. In this way, IT will become more powerful.

So far, cloud has been perceived as a property of the IT Industry. Some carriers are not diving fast enough into the cloud business. The notion has been that, even if the cloud is one of their biggest potential sources of revenue in the near future, it is always related to IT and that the carriers are not IT companies. This perception needs to change.

As soon as we all realise that cloud is not about IT, and instead on how to deliver IT services or how to allow for business process outsourcing (BPO) using existing Telco assets, the ‘real’ cloud will start to emerge.

When using a new smartphone, everybody is thinking much more about the smartphone vendor than about the services or the carrier infrastructure behind it. But it is the carriers that deliver millions of smartphones to the market every month – not Nokia, Apple, Sony, RIM, Samsung or other technology vendors.

Carriers made it possible for mobile phones and will make it possible for cloud services, taking the position they deserve in the cloud market: the leading position.

Manuel Gallo, Director of Strategy & Business Development – EMEA Cloud Competence Centre, NEC Europe Ltd.