A Silver Lining in the Cloud for Telcos
Clearly cloud computing has arrived: we see it everywhere – at government agencies, global corporations and small enterprises and of course at the telcos. Could 2014 be the year of Cloud dominance?
The attraction of cloud computing for telcos is quite clear as players are starting to recognize ways to monetize more money by creating a unique mix of technological innovation and business strategies. Combined with the existing telecom networks and the opportunity that cloud is capable of providing, operators are looking at point of new revenues to improve bottom lines.
Telecom operators bill their customers for network services on the basis of usage or monthly subscriptions, so unlike the older models of hosting providers they have an operating model that is ready to support utility computing services.
One of the reasons why telecom operators can successfully adopt to cloud computing services is that the quality of services is heavily dependent on the network.
Telcos are getting serious about the business and are looking at cloud computing as a key to their growth strategies and this is evident in the developmental plans of major operators worldwide.
America’s AT&T, announced a couple of years ago that it was accelerating its plans to deploy global network-based cloud, mobility and network sourcing solutions to companies across different industries and has taken all necessary steps in the direction. Today AT & T’s Cloud division is in a major growth phase and a significant growth business.
Likewise, Australia Telstra announced plans to invest more than $858 million by 2016, to expand its cloud service capabilities and support the growing demand from organizations for cloud services.
Similarly, India’s Bharat Sanchar Nigam Limited (BSNL), along with Dimension Data, a global ICT solutions and services provider announced last year the launch of their Enterprise Cloud Services in India.
Telecom operators can significantly profit many of their business operations as they can be channelized that will yield greater flexibility, faster time-to-market and cost benefits.
Government Dives into Cloud
In the Tech space, the government of India took a step in the right direction with its project ‘MeghRaj’ – a national cloud computing initiative, which sets basic standards for all cloud services for government as well as converting projects through cloud first policy.
For a country like India, where demand for services is huge, cloud based services certainly seems to be the promising option.
Through the Meghraj project the government intends to set up a secure and unified cyber space for shared government services and infrastructure, provide IT resources on demand, and enhance operations of IT infrastructure and resources.
The government, mindful of the current trends, understanding the barriers to technology adoption and noticing productivity driven surge towards cloud computing, it has designed the cloud project specifically targeting the Micro, Small and Medium Enterprises (MSME) segment.
The New Government-Telco Cloud Ecosystem
Every telco has the potential to capture significant value in the evolving cloud ecosystem. Given their assets, telecom operators have several ways they can play. They can be a user as well as a provider of cloud services.
Telecom operators can benefit from cloud computing as a user by transferring selected business functions to the cloud to reduce costs and enhance flexibility.
Not all operators have the full range of capabilities needed to create complete cloud offerings. In order to provide cloud services, telcos will not just require to devise feasible strategies but many of them will need should also be willing to partner with other players in the cloud ecosystem.
With the government’s Meghraj project to deploy cloud services and create a common cloud roadmap for the country, operators can join hands and work together to form partnership on cloud offerings and application services.
Telcos can start pursuing specific cloud-enabled business moves that can generate substantial growth in revenue and profit. In particular, they can work with the government and other software vendors to expand their services in the MSME market base. This is one key area for cloud applications to be customized for MSMEs that have not heavily invested in IT up to now.
Operators are the advantaged because they already possess the necessary real assets of IT and network capabilities and a successful partnership with the government can help them with data storage.
In the past few years demand for data storage solutions has never been higher. The recent increase of mobile data usage and emergence of new applications in telecommunications and hence storing information and using it as a resource could be a logical next step for companies in the industry. Having the primary storage facility locally guarantees the fastest connections for performing backups and restores. One development having big impact on how storage decision will be made is cloud computing.
One of the biggest challenges of this initiative would be its implementation due to security, privacy and regulatory matters among others, difficulty in understanding the business model, commercial models, data security and a groundless apprehensions acting as impediments to technology adoption by the businesses.
Upon implementation rises another set of challenges such as security, interoperability issues in cloud, complex architecture which may involve high effort and monetary investment for making them cloud ready, availability of technical competency, alignment of traditional procurement norms for cloud and most importantly awareness and change of mind-set of user departments for cloud buy-in.
The long-term growth potential for cloud solutions within telecommunication industry and the Government on the whole remains high, and by leveraging available technology and existing infrastructure, a greater economic growth can be seen for all businesses in India in the coming years. Once this is overcome in the initial stages, the government or the enterprise is certainly not going back.
Sandhya Vijayan Covers cloud and OTT segments for Tonse Telecom