Technology start-ups are innovating at a rapid pace and large technology providers are further accelerating this process by providing the financial capital, market access and tools that speed up this process. To add fuel to this fire - the appetite for consuming new technology is rapidly on the rise as 'Millennials' grow to take important positions in our society. Telcos and Service Providers are having to step out of their comfort zone to explore uncharted territories in technology – either to thrive in the new world order of digital platforms or merely to stay relevant. While the options for Telcos and Service Providers (SP) are plenty there is just a lot to choose from and these choices can make or break their entry into these new markets. Carefully navigating these choices using guiding principles that are informed by the organization's business strategy is key to success.

With new trends in wearables, Internet of Things (IoT), Augmented Reality (AR) and Virtual Reality (VR) capturing the consumer mind share, Cloud computing which was born less than 7 years ago is already table stakes and considered as a given. The definition of Cloud computing is not just limited to dynamic provisioning of IT resources, it is essentially embedded in the fabric of technology innovation.

The number of Cloud platforms and services available today has grown multi-fold and Cloud taxonomy (Public Cloud, Private Cloud, Hybrid Cloud, Hosted Cloud, Managed Private Cloud, Virtual Private Cloud, IaaS, PaaS, SaaS, etc. -the list goes on) and deployment options have expanded rapidly to meet the diverse needs of consumers, small businesses, enterprises, financial organizations, service providers and public sector entities.

For Telcos and Service Providers focusing on developing Cloud capabilities to generate net new revenues there is a lot to consider - from selecting a Cloud platform to host, to shortlisting a service portfolio that makes sense, to selecting the deployment options to offer, to designing a partnership model that will enhance their Go-To-Market options and help them derive the revenues they desire. This exercise can easily get overwhelming and end up being a multi-billion dollar make or break for a Telco – no wonder Telcos are taking their own sweet time to make the right decisions that optimize their business model. The market however, is not waiting - it is moving ahead at a rapid pace as organizations and individuals get a taste of consuming technology without owning it.

While the market for Cloud computing and services is ever expanding and changing, sticking to certain key guiding principles will help Telcos and Service Providers make the right selection of platform & services and partnerships to go after. I have shared some guiding principles that come to mind below. These guiding principles are merely my personal opinions and do not necessarily represent the viewpoint of any of the organizations mentioned.

Maximize Revenue / byte



Maximize Revenue / byte transported on the Telco's networks by focusing on services that give these Telcos an opportunity to derive more from every byte of information flowing through their networks. This is not very different from the past, when a byte of SMS fetched more revenue than a byte of voice traffic or a byte of data traffic. Selecting services that will maximize margins for the core Telco business is probably the most risk averse option for Telcos, an option that will not only generate net new revenues but will also grow and scale the core communications business as well.

Offer multi-cloud options with a broad range of services

One platform or deployment model with a limited set of services will not win subscriber loyalty. The key is to keep subscribers locked within a Telco / Service Provider’s ecosystem by giving them all they would ever need from a Cloud services perspective under one umbrella, even if it means offering majority of services from third party providers. This is similar to what Amazon does even with its retail marketplace – once you step in, you are almost certain to find what you are looking for whether it is sold by Amazon or a third party provider.

While Telcos and Service Providers may choose to develop some of these key services that drive their revenue by themselves, they may also want to simply consider reselling services from other providers. Resell margins are generally lower compared to margins from homegrown services but reselling third party services will not only close gaps and offer a completeness in services portfolio but will also provide faster time to market than building and deploying all services in-house. Capturing early market share and keeping subscribers engaged is key for success.

Not all services will be revenue magnets

Some service offerings are just table stakes for Telcos to keep their seat at the table with other cloud providers – basic compute and storage services for example are a dime a dozen. Telcos solely focused on offering just the basic IaaS services will find themselves in a highly commoditized market plagued with price wars. Offering differentiated services that align more so with the Telco’s core business is key to success.Tables below list a few options (not an exhaustive list) showing a mapping of services to relevant customer segments and Cloud delivery models for Telcos and Service Providers to consider from.

Make it easy for the subscriber to adopt your cloud offerings

Adopting and transitioning to Cloud is not easy for all, especially for enterprises that have a diverse set of workloads and applications running at various places. Service providers can partner with System Integrators or other third parties to make it easy for these enterprises to adopt Cloud services and help bring them on-board.

An easy start…

While there is so much to ponder upon, an easy start for Telcos is always to look at their core capabilities and evaluate where they stand in the Cloud delivery value chain compared to others and carefully consider what Telcos have to offer versus what others can bring to the table.



While the key capabilities of Telcos revolve around Data Center facilities, Network access and Subscriber billing relationships - partnerships with right kind of partners across other pieces of the Cloud delivery value chain are absolutely necessary for Telcos to close the gaps in the value chain and deliver Cloud services. Alliances and Technology Partnership teams across the Tech. Industry should essentially be the new BFF (best friends forever) for Telcos!!

From an IaaS (Basic and Advanced Infrastructure as a Service) and PaaS (Platform as a Service) perspective, partnerships with equipment vendors and platform providers with favorable commercial structures such as revenue share or extended payments are probably the best way to proceed forward.

Selecting the right kind of platforms to host is key to success. While enterprise focused Openstack platforms (HPE Helion, RedHat, Mirantis, etc.) offer significant cost advantages through their open ecosystems there are other platforms such as Microsoft Azure, Google Apps for Work and GE Predix that serve the Enterprise and Industrial segments and require very strong SLAs (Service Levels) for network connectivity. This is exactly where Telcos can provide premium connectivity services and derive more revenue/byte of information flowing through their networks. Some of these partnerships may not only speed up time to market but will also provide a multiplied Go to Market effect and access to larger and possibly global markets – a win-win overall !!

Providers focusing on offering a coherent experience across multiple Cloud service options may want to consider partnering with multi-cloud brokering and management platform vendors such as Morpheus, CloudBolt, HPE CSA etc. to further enhance user adoption of the Telco’s / Service Provider’s Cloud services and an create an overall affinity for their ecosystem. A brokering and multi-cloud management platform with direct access to customers will also provide an important control-point over other providers. However, when establishing such brokering capabilities, it is important to remember that a good cloud brokering platform integrates multiple Cloud environments (not commoditize them) and does not become an undesirable point of lock-in for customers.

As the offerings across the entire Cloud value chain continue to mature – Telcos and Service Providers will have many more decisions to make and many more choices at hand. While choices can be a blessing when considered carefully in light of core strategic capabilities and optimum technical and business model alike, choices made in isolation to one another can turn out to be very expensive mistakes !!