cloud partnership strategies -by m mudassar

Version: 01 Cloud Partnering Strategic Insights 15 Sep, 2012

Reference: NLOB-LIP-09/01 New Line of Business – ICTE & Mega Projects

New Line of Business ICTE & Mega Projects

Telco Cloud Partnering Strategies – Intelligence, Insights, Implications

By Muhammad Mudassar: Head Presales & Solutions Architecture, New Line of Business, Qtel Qatar.

September 2012

Summary — The role of Telco 2.0 has evolved from a mere communication service provider to that of an IT solution full service provider. To remain competitive and even relevant in the new Telco world, telecom operators need to develop strategies to effectively expand their business offerings with shorter time to market.

Telco Cloud partnering strategies Summit has been organized to help Telcos make sense of the regional and global cloud landscape with first-hand intelligence, case studies and expert insight covering the entire cloud ecosystem. The focus is on ways Telcos can start to work together with the key players in the cloud space to leverage their core assets to fully exploit the upcoming opportunities and at the same time create valuable new revenue streams to make up for the declining legacy ones.

This post-event report aims to give Qtel Qatar key ICTE stakeholders – Senior Executive Management of Marketing, Sales & Services, Marketing and Business Planning – strategic insights and understanding of challenges Qtel is facing in cloud space and how to leverage its strengths via partnership and strategic alliances.

Cloud computing has taken off

Telcos need trusted guiding hand to fulfill ambitions at own pace

similar size/industry

capabilities

business

I. BUILDING A CLOUD READY BUSINESS STRATEGY

Cloud has changed the game and many growth markets are maturing rapidly in the cloud computing space. The lines between industries are blurring and everyone is after the same consumers. This is causing disruption in the Telco industry, for operators and their partners. Greater levels of creativity are needed to address the following issues:

The vertically integrated Telecoms business model is under attack from all sides: tougher regulation, new technologies, new entrants, and advancing customer expectations.

P/E ratios suggest little investor belief in this improving. They have low confidence in 'converged' or triple/quadruple-play bundles providing high returns.

Operators are making investment decisions in Network & IT, Products & Services, and Mergers & Acquisitions without a clear view of the future.

're-thinking the strategic role of the operator' is a key priority.

There is an urgent need for all players in the telecoms value chain to review and renew their business models.




Fortunately telecom's companies possess a whole host

of assets that could be exploited much more to support new, sustainable market growth.

The key is for Telcos to create open platforms that help other service providers (enterprises, SMEs and government) interact with end-users in more efficient ways than they can today.

The 'two-sided' Telco 2.0 business model has

consequences for the design of existing services such as conventional voice, messaging and data/broadband products (e.g. "What to learn from - and how to compete with - Internet Communications Services") and also creates opportunities to create new revenues and B2B Platform Services.

A new ‘Telco 2.0 Opportunity Framework’ for planning revenue growth;

The critical changes needed to Telco innovation processes;

The strategic priorities and options for different types of Telcos in different markets;

Best practice case studies of business model innovation.

Sell the cloud to secure the core Communication service providers should remember that cloud computing can – and must – defend the core. The core is broadband, whatever their aspirations to become digital media outlets or ICT service providers. Using cloud services, Telcos have a multi-billion dollar opportunity to change the dynamics of ICT wallet share. Nevertheless, Telcos’ cloud services must fulfill a primary function of securing revenues on the network assets that make Telcos positively different from pure-play cloud service providers.

II. PERFECT STORM FOR CLOUD TRANSFORMATION

Consumerisation of IT offers a perfect storm for cloud transformation for Telcos. With utility based computing, concepts of consolidation, optimization, automation and management of IT resources have become key drivers for Telco’s to offer complex cloud solutions even by building confederations or brokerage platforms. Cloud computing offers strategic agility to telecom operators through:

Telco’s are strategically well positioned with its massive

infrastructure, economy of scale, E2E service delivery and assurance mechanism, set to reap the benefits of the cloud innovation wave, however the challenges it face include an effective Telco to IT organization transformation, Go-To-Market Strategy, Product development team and Sales/Support team capabilities, customer care and overall service value chain control. Therefore many leading Telcos have setup separate business units and special teams to tackle new business / cloud business.

Economics of cloud computing is more than just hard-

dollar saving achieved through automation of orchestration and provisioning (traditional 40 days to cloud 5 minutes)

III. THE JOURNEY TOWARDS CLOUD

Cloud is a journey and not a destination. Though smart Telcos can strive to tap on their existing infrastructure for transition into cloud, there is significant investment and experience required when expanding their IT




infrastructure. Thus smart partnering with ICT solution providers is a must, so as to shorten the time to market and strengthen the market leadership position. The complexities involved in a successful cloud journey include challenges such as:

Success Factors:

Broadband, and increasingly mobile broadband, is the anchor service that Telcos must support and integrate into their cloud service propositions. Telcos must not seek to simply copy pure-play cloud service providers; they must emphasize how they positively differ.

Telcos must also suppress the urge to silo cloud services into the ‘ownership’ of a particular division: Cloud is a consumption model for digital goods which touches all customer segments – as well as Telcos’ internal processes.

Telcos can act as a distribution channel for third-party cloud services. But a central role in the cloud value chain – and a bigger share of the revenue pie – is sought. Reflecting this desire is the growing focus on IaaS.

Telco must not re-architect the boom and bust cycle of the Enron Era. Two duties are clear: To assert service differentiation and to lower costs. In a post-PC world, Telcos must remember that their ability to secure, mobilize and democratize access to cloud services is increasingly valuable.

Recommendations Secure core income: Cloud services must drive usage

of Telcos’ broadband networks and secure customer loyalty.

Differentiate, don’t copy: Telco’s must emphasize their multi-device and multi-platform cloud service delivery and support capabilities.

Remove silos: Telco’s must develop a holistic cloud strategy that delivers both go-to-market and operational benefits across their customer bases and business processes.

Apply the power of consumerization: Consumerization of the enterprise is a weapon to

use proactively to drive cloud service demand. Beware cloud hypermarkets: Brokering apps, storage

and compute services mustn’t downgrade a Telco’s differentiators in the cloud ecosystem.

Pursue open source: Open source cloud stacks are still maturing, but could improve Telcos costs and competitiveness.

Promote trust over cost: Telcos must find new ways to help SMEs to do business using the cloud, not just cheaper ways. Trust is a differentiator.

Verticalize the SME universe: Telos should market to large subsegments within their SME universe. Sizeable groups exist where discrete targeting is justified.

Don’t downplay broadband: Telcos should promote services that offer fundamentally new ways for SMEs to do business using assets that Telco control.




IV. PARTNERING FOR CLOUD ENABLEMENT

According to Informa’s Telecom Cloud Monitor, the average Telco works with almost 16 cloud enablement partners, Many relationships simply involve SaaS resale, but more complex relationships are also common.

Cloud enablement can be defined as a sub-set of telecom

managed and professional services, divided into two inter-

related types.

Go-to-market services involve helping Telcos to sell cloud

services to end customers.

Operational services, meanwhile, may include the construction

and operation of cloud service infrastructure, but also the

migration of Telcos’ existing processes to the cloud’s

operational model, such as provisioning, billing and service

orchestration.

Telco’s leading partners illustrate the diverse, multi-faceted

nature of cloud enablement. They included:

• Microsoft: Over Twenty eight Telcos developed and

launched services (largely Office365) with Microsoft in 2012.

• Cisco Systems: A leading unified communications and

collaboration (UC&C) provider, Cisco was also a global IaaS

enabler with EMC and VMWare.

• CE On-Demand: The Hungarian Office365 syndication

partner helped Telcos in Austria, Bulgaria, Hungary, Poland

and Slovenia.

• Google: GoogleApps won support as far afield as the

Maldives with Dhiraagu, but also major Telcos like Vodafone

Germany.

• Dimension Data: The NTT Group subsidiary provided its

onecloud IaaS platform to Telcos including BSNL, Hutchison

Global, Indosat and PLDT.

• Parallels: The vendor’s cloud-service automation tools

helped Charter Communications, KDDI and KT in 2011.

• NEC: Most prominent in Telefonica Espana, NEC’s SaaS

enablement services extended to Latin America, and Telcos

like MTS Belarus.

Today, the transition to cloud-based operations ranks among Telcos’ top three operational investments for the 2012-13. Ultimately, telecom cloud market dynamics will favor enablers that can provide a lifecycle of services – and shared reward.

Recommendations Demand gain sharing: Favor partners willing to share risk and reward. Evaluate wider partnership benefits: If a partner’s proposed financial terms are unfavorable, consider if the cloud service can act as a loss leader to secure broadband subscriptions before walking away. Streamline partnerships: Look to lifecycle partners that can simplify partner onboarding and management burden.




What Characteristics can define QTEL as a ‘cloud service

aggregator/broker’?

Qtel NLOB believes that the boundaries between cloud and

non-cloud are not rigid. As enterprises embrace new ways of

working in which the divisions between private and

professional lives begin to dissolve, they need service partners

with a new perspective for a new age. QTEL NLOB aim to

positions Qtel as the single-point-of-contact (SPOC) for

clients looking at procurement, provisioning & support of

ICT. The complexity of ICT moves to the background and at

the same time the business is moving to short-term pay-per-

use contracts. Services of Qtel but also 3rd party services can

be bought and will be delivered with one mouse click over its

cloud application platform. The QTEL Corporate Market is

shifting its focus from IT services to business service

aggregation. In this new role, we focus on all critical business

discussions relating to cloud and delivery “as-a-service”.

How Qtel can be well positioned to deliver optimal cloud

services to enterprises?

Qtel NLOB believes that the telecommunication industry at

large is well suited and perfectly positioned to lead this

change. Cutting through all the details, at the end of the day,

Cloud Computing is nothing but a new way of delivering

applications to its consumers and Telcos are the ones who own

the “last mile” to the consumer. Consumers are connected

through the network owned and managed by Telcos and any

new information delivery model has to leverage this existing

network infrastructure in order to be successful. Because of

our dual enterprise IT service and telecommunications

heritage we are well-positioned to enable organizations to

bridge existing legacy/IT with new, cloud-based technologies.

Next to leveraging infrastructure, Telcos are well positioned

from a business model perspective because of their experience

with complex pay-per-use provisioning, billing and marketing.

Enterprises are moving into the cloud world but through baby

steps. Instead of moving all applications from in-house to

cloud all at once, enterprises are choosing point applications

one at a time. For example, they start with Infrastructure as a

service first where the focus is to buy Virtual Machines hosted

in 3rd party data centers to meet their elastic storage needs as

and when needed. Next they may buy external cloud software

(SaaS) for less critical business processes and slowly evolve to

a stage where they start pushing their mission critical

applications and data on the cloud. Qtel NLOB believe that

the enterprise market will need a central Cloud Broker

platform that will serve as the single point provisioning engine

for all cloud based services cutting across IaaS, SaaS and

PaaS.

Establishing ourself as a cloud broker is asking for a solid and

open architecture which at the same time respects security and

compliance demands.

ACKNOWLEDGMENT

The information contains comments / excerpts / notes from the conference Telco Cloud Partnering Strategies, organized by Questex Asia and TelecomAsia.

REFERENCES

Cloud Partnering Strategies Summit speakers, panelist, guest speakers from: Reliance, Chungwa Telecom, Globe Telecom, Indosat, Telstra Global, Korea Telecom, Asia Cloud Forum, NEC, Brocade, Hong Kong Broadband Networks, Analysis Mason, Frost & Sullivan, Singapore Cloud Forum.

[1] Ericsson Thinking Ahead Blog: Redefining the Cloud: Mobile

and Connected

http://www.ericsson.com/cn/thinkingahead/themes

[2] IHS, Wireless Service Providers Look to the Cloud to Regain Profits Press Release, October 2011 http://press.ihs.com/press-release/design-supply-chain/wireless-service-providers-look-cloudregain-profits

[3] Telco 2.0, ‘Cloud 2.0: don’t blow it, telcos…’ Executive Briefing, September 2011

http://www.telco2research.com/articles/AN_cloud-2-dont-blow-it-telcos_Summary

[4] U.S. Government ‘Federal Cloud Computing Strategy’, February 2011 http://www.cio.gov/documents/Federal-Cloud-Computing-Strategy.pdf

For further information please contact:

Muhammad Mudassar Head Presales & Solutions Architecture ICTE & Mega Projects, New Line of Business T +974 4400 1481: M +974 6699 2099 [email protected]

cloud partnership strategies -by m mudassar

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