Will Telcos be left behind?

Introduction

Cloud services are emerging as a key strategic imperative for Telcos as revenues from traditional services such as voice, messaging and data come under attack from Over The Top Players, regulators and other Telcos. A majority of these new products are delivered from the Cloud on a “pay for consumption” basis and many business customers are increasingly looking to migrate from traditional in house IT systems to Cloud-based or virtualized services to reduce costs, increase agility and decrease deployment times. Gartner recently estimated that the Cloud services market would be worth over $200 billion by 2016, roughly double the value of 2012 and with a CAGR of around 17% whereas traditional IT products and services will see just 3% growth.

It is clear that some Telcos have gained a greater understanding of the Cloud market, and are acting on that understanding, offering increasingly rich Cloud-based products and services, paving the way for Cloud 2.0. But for most Telcos, Cloud services remain secondary to their core business of voice and data delivery. Telcos are wrestling with issues of reduced margin on Cloud and how to stay relevant to their business customers.

This report looks at the development of the Cloud market providing clarity around the different types of cloud products and the impact that they have on business users. Cloud value propositions are examined along with criticisms of cloud products and services. We show that the current risks for Cloud customers represent an opportunity for Telcos and Cloud vendors because….

The report also looks at the development of Cloud 2.0 – a second generation or a more ‘intelligent’ evolution of Cloud products and services. Cloud 2.0 offers key additional benefits/capabilities to consumers, vendors, businesses and Telco/Service providers. These can be typified by cost reductions in the delivery and consumption of cloud services through working with scale players to provide basic compute services, ease of acquisition and most importantly the ability to deliver “mash-up” products and services by using API’s to provide integration between cloud services and products and Telco/service provider products such as Bandwidth, Voice, Management, Support and Billing. Cloud 2.0 is gaining rapid momentum and we show how there is still time for Telcos to play a key role in Cloud 2.0.

Who should read this report?

The report is a ‘must-have’ for all strategy decision makers, Cloud specialists and influencers across the TMT (Telecoms, Media and Technology) sector; in particular, CxOs, strategists, technologists, marketers, product managers, and legal and regulatory leaders in telecoms operators, vendors, consultants, and analyst companies. It will also be invaluable to those managing or considering medium to long-term investment specifically in Telco Cloud services, but also more broadly those involved within telecoms and adjacent industries, and to regulators and legislators.

Contents

Executive Summary

Introduction

• What is Cloud?
• What is the Cloud Value Proposition?
• Types of Cloud
• Key criticisms of the Cloud
• What is ‘Cloud 2.0’ and why does it matter?
  • Enterprise vs Consumer cloud, Fit with Telco 2.0 strategies

Market Structure & Opportunity

• What is the shape and size of the market (revenues and profit)?
  • Total size, definitions of SaaS, PaaS, IaaS, VPC + forecasts
  • Advantages and limitations of XaaS definitions
• What are the key customer segments and their needs?
  • SMBs vs Enterprise
  • Early adopters vs mass adopters
• What is the opportunity for Telcos (market size and revenues)?
  • Share forecasts / ranges for Telcos
• What are the most relevant cloud services for Telcos?
• What are the key barriers?
  • Overall and by segment
• Future Scenarios
• What is the competitive landscape and who are the key players in Cloud Services?
  • Detailed competitor analysis, groupings by type and strategy Strategy review: Analysis of 6-10 key players, covering
    • Objectives, strategy, areas addressed, target customers, proposition strategy, routes to market, operational approach, buy / build partner approach
  • Key strategies of other players
  • Role of the network / operators to Vendor/partner strategies

Telco Strategies

• Which strategies are Telcos adopting and what else could they do
  • Review of Telco attitudes and approaches based on following analysis
  • Grouping of Telcos by approach (if valid)
• Which are the leading Telcos and what are they doing?
  • Case studies on 6-10 leading Telcos, covering:
    • Objectives, strategy, areas addressed, target customers, proposition strategy, routes to market, operational approach, buy / build partner approach
• Outlines of 10 additional Telco strategies
• What relationships should Telcos establish with other ecosystem players?

Conclusions and recommendations