Cloud Business New Benchmark

The digitization of the economy is opening up new business opportunities, carriers can be evolving towards a hyper connected and intelligent digital world. Next generation carrier business will enable transformative new services by cloud technology. Cloud services are beyond connectivity proliferation to create enterprise a new digital market opportunity. Carriers allow IT resources in the cloud platform on-demand basis to enable end customers to consume to achieve (i) cost saving, (ii) creating new agile innovations and (iii) making new revenues.

According to Gartner report, the market opportunity in cloud services will be over US$200b for various market potentials by 2020, carriers are capable to deliver cloud services to different market segments to capture over US$10b[1].   By contrast with other cloud service providers, carriers can win enterprises, government and vertical markets because of well-known market reputation, robust cloud infrastructure, excellence on local service support, assurance on network performance, connected & secured datacenters as well as managed IT services. The combined capabilities are dedicated to address the needs from enterprises, government and vertical markets. 

Cloud service is vital to enterprise customers; IT resources consumed and purchased from carrier cloud platform become a trend and the modern way. Many enterprises IT budgets already included purchasing cloud resources from cloud service providers. Over 20+ large carriers in the world defined their digital transformation planning to align with enterprise IT strategy.  There are several ways to begin the cloud transformation journey; datacenter modernization, new build datacenter, managed cloud service, public cloud service, telecom cloud, operation & support clouds as well as NFVi are the considerations in many carriers to plan for commercial deployments. DT & Telefonica empower their enterprise market strategy to offer public cloud services; MTN’s Reload 2020 enhances their telecom service capabilities by Telecom Cloud, DC modernization, operation & support clouds to achieve future success. In China, China Telecom, China Mobile and China Unicom define digital transformation into company strategy to meet the new cloud opportunities from IoT, Internet +, telecom services and public cloud; they are making the similar approaches to plan for DC modernization, NFV deployment, migrating telecom services in cloud platform and optimizing BOSS through cloud technology.

In enterprise IT perspective, enterprises rely on carrier cloud platform. Carrier shall create cloud business portfolios to cater different cloud services and operation support to address different market segment customers which are depending on the needs to acquire services from public cloud, vertical market cloud and/or managed enterprise cloud. In the future, carriers will play the role of business advisor to enterprises in the sense of prime contractor for government or vertical market projects as well as solution planner for large enterprises and SMB. Carriers have to build up cloud ecosystem and partnership management capabilities for such new role. The importance of the business advisor is to propose appropriate IT solutions to customer project requirements with mature, stable and manageable conditions. These are the challenges to carriers and the challenges are the driving force for carriers to do transformation with “cloud advantages”. However, it is not as simple as deploying a cloud platform to sell cloud features. A series of business operation processes, security compliances, selling approaches, pricing models as well as support services will be different from traditional telecom business model. Carrier can make different ways to allow their IT Division to manage and market the new cloud business or a new Digital Division as well as subsidiary to run the cloud business. 

As a leading ICT solution provider, Huawei in cloud transformation perspective defines 4 segmentations which are (1) dc modernization, (2) Internal IT Cloudification, (3) telecom business cloudifiction and (4) B2B cloud service to support carriers in doing their transformation. The foundation is from carriers’ datacenters to be modernized to reduce telco IT complexity for carrier internal usage and in the other hand to allocate the dc resources for external business in doing public cloud or enterprise cloud services. The key CIO consideration in dc modernization is the physical, network, IT and virtualized resources can be centralized to manage and monitor.  In order to launch commercial cloud services as well as other cloudified telecom business, carriers have several business systems and supporting systems to run business for the purposes of sales & marketing, accounting, billing and other departments. During dc modernization, new IT expansion or IT equipment replacement, every system may already have multi-vendors to supply servers and storages to create heterogeneous IT environment; it leads the challenges on vendor management, support SLAs, cost control and the most challenge is about CIO to plan for new businesses to satisfy new business or market opportunities. Internal IT Cloudification creates the simplicity in central resource management and distributed resource allocation under heterogeneous IT environment; CIO can make all different carrier departments to maintain their assigned, allocated & virtualized IT resources in cloud platform.

Traditional telco services are now considered to move into new generation business model. Carrier CTO is making different approaches for core & mobile businesses as well as telecom value-added services; those are still carrier cash cow nowadays. From recent technology consideration, software and hardware decoupled makes carrier services to be more agile to deploy and makes network resources to be more dynamic to scale out and manage. CTO takes cloud advantage to enter into NFV as well as migrating telco VAS into cloud platform. It makes the future telecom core services or VAS services to deploy like internet player to quicken on service launch.

As mentioned above, cloud B2B service is new market opportunity for carries to sell IT resources as well as IT applications. Carrier CMO can approach different enterprise segments by understanding government policy on ICT such as Industry 4.0, Internet +, Industrial Internet or market solutions. Vertical cloud is suitable for local companies who demands local carrier service support, data localization and data privacy. CMO can think simple IaaS features with specific PaaS & SaaS applications to make local companies to have self service from web portal to use IT on-demand, online and real time basis. For global carriers, they can approach MNCs which have branch offices worldwide but lacking helps from local IT supports. Carriers use their worldwide sales operation to support and bundle together with VPN, lease line and telecom services to form enterprise ICT bundle services. Vertical market and government segments are very different from enterprises; they require industry knowledge and standard to support. The advantages of carriers selling to them are (i) well-known market reputation, (ii) network and IT infrastructure readiness, (iii) trusted business partner, (iv) support and service and (v) expertise. Carriers can also up-sell NBN and National DC solution to help government to formulate National ICT policy and to plan for e-GOV strategy for G2C, G2B and G2G.

In the 4 segmentations in cloud transformation, Huawei offers carriers the business visualization on how to transform from existing DC infrastructure to Cloud DC, how the cloud resources to improve business operation efficiency, what new NFV infrastructure to evolve telecom service in cloudified telco service and what cloud services to launch into different enterprise segments. Huawei will go through product capabilities, solution approaches, business consultation and enterprise architecture to actualize carrier cloud transformation.

Huawei was named several times by different carriers to be the prime partner in doing cloud transformation; DT in Open Telekom Cloud project indicates Huawei has excellence in Technology Knowhow, R&D Capabilities and Efficiency Leader to expedite the public cloud project launching. In Jiaxing city government cloud project, China Telecom chose Huawei to transform government IT service in cloud service because of (i) Huawei brand in China market, (ii) strong software development and support capabilities, (iii) integration with China Telecom network infrastructure and (iv) adopted to new business service model.

[1] Huawei MI research data on carrier cloud service revenue forecast on 2020