To move from pipe to platform, telcos must take on a new role as a strategic enabler of their customers’ transformation. Drawing on a recent survey of 1,214 enterprises, this report explores how telcos can effectively evolve by offering managed cloud services to unlock longer-term B2B growth opportunities.

Managed cloud services offer telcos the opportunity to take a new role with customers

All enterprises face the imperative to move IT workloads to the cloud and therefore utilise managed cloud services. Internally, this transition is driven by the need to improve data management and analytics capabilities, create new services and business models, as well as address concerns around security. Externally, moving to the cloud is crucial for businesses to keep up with advancements in the industry and remain competitive in the market. As a result, enterprise cloud adoption is accelerating, with 84% of enterprises having already embarked on their cloud journey. See the graph below.

Most enterprises have already begun cloud transformation

N = 1,214
Source: STL Partners global enterprise survey, 2024

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The growing cloud market offers telcos the opportunity to evolve their role in the ecosystem beyond connectivity and expand their enterprise IT offerings. Telcos already play a crucial role in enterprise cloud transformation, since secure and dynamic connectivity to the cloud is a fundamental element of this journey. As such, most telcos have a basic enterprise cloud offering: often their core proposition is centred on secure and reliable cloud-centric connectivity solutions, such as SD-WAN and secure cloud interconnect, and have since expanded to become intermediaries and resellers of other cloud products and services, such as infrastructure-as-a-service, platform-as-a-service, and SaaS.

For many telcos seeking to expand their cloud offerings, and position themselves as a platform for customer transformation, managed cloud services are emerging as a key focus. There are various different forms that a telco managed cloud services offering could take. At its core, it represents an offering which includes:

• Some cloud technical capability which could be resold or provided by the operator. For example, networking, infrastructure, application, software.
• The ongoing management of that capability, including integration with other systems, issue resolution and service maintenance, updating or optimisation, which would be provided by the telco. Telcos could tailor this support on different enterprise cloud needs such as planning and migration, enablement, optimisation, and holistic empowerment services.

Enterprises increasingly recognise the value of managed cloud services as they face the challenge of managing complexities of modern cloud environments; with 95% of enterprises surveyed seeing value in managed services for their organisation’s cloud journey (see the full report for a breakdown of survey results). From optimising resource allocation to ensuring data integrity and compliance, many enterprises seek specialised expertise and round-the-clock support offered by managed service providers to ensure they can leverage the latest technologies and best practices without having to invest heavily in hiring and training their own IT staff.

Becoming a managed cloud services provider aligns with telcos’ overarching objective to play a more valuable role in the ecosystem and ensure they are not relegated to “just a pipe”. This strategic shift allows telcos to move beyond simply reselling cloud technologies and products, which mitigates the risk of enterprises bypassing them and going direct to cloud providers. Furthermore, if operators can get in with enterprises at the ground floor of their journey, through a managed cloud service, they can position themselves more effectively to capture long-term revenues associated with that enterprises’ transformation. By providing managed cloud services, telcos can strengthen their relationship with enterprises and adopt a more dynamic role as a key enabler of the enterprise cloud transformation journey.

Table of contents

• Executive Summary
  • Recommendations for operators
• Introduction
• How can telcos become trusted managed cloud service providers?
  1. Develop a deep understanding of specific enterprise pain points to build a compelling managed cloud services proposition
  2. Build on top of telcos’ unique brand to assert themselves as a strong managed cloud services provider
  3. Target enterprise segments where they have the strongest relationships from their existing customer base
  4. Identify gaps in technical skills and expertise and invest through partnerships, acquisitions and new talent
• Evolving the telco role to access longer term growth in data and AI
• Conclusion
  • Recommendations for operators
• Appendix
  • What are managed services?

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• Network API monetisation forecast 2023–2030: Growth beyond anti-fraud
• Managed services: Telcos must adapt to the cloud
• Finding growth by understanding SMB needs
• Telco data monetisation use case directory

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Author

Gabija Cepurnaite

Consultant

Gabija Cepurnaite is a Consultant at STL Partners, specialising in edge computing and MEC APIs.