The Profit Opportunities of Cloud Computing for Telecom Operators


Rising traffic volumes, falling incomes, the difficulties of managing facility investment and the increasingly complex needs of Business Continuity Planning are all examples of how the environment of Telecom Operators is changing. It is against this backdrop that many Operators have started to address the possibilities of Cloud-based business.
There have been many examples of Operators who have tentatively started free Cloud businesses, but are these really examples of a full Cloud business? Is it even possible to make money from Cloud businesses? These are common questions, and to answer them, Shinya Kukita of NEC replies:

Cloud services combine IT service provisioning capabilities with Network connectivity. A Cloud business has many advantages for Operators because they already possess the necessary tangible assets of IT and network capabilities, plus many relevant intangible assets such as a track record of trusted service, a large local customer base of SME with whom they are regularly in contact. Most importantly, they have the trust of their customers – nearly all customers view Operators as reliable, safe and secure enough to entrust them with valuable data.”

How Should Operators Take Advantage of their Strengths to Build a Profitable Business?

Ken Sugata responds:
“Operators provide telecommunication services, and are established entities in every country in which they operate (as well as being subject to each country’s local regulations). In the early days of Cloud Computing, when the ideal was for services to be globally homogeneous, Operators’ local presence and image were seen as a handicap, but it is now turning out to be quite the opposite. Operators should make their local or regional presence a key part of their Cloud business’ strategy. In particular, they should work together with local software vendors and expand their services from their SME and LME customer base in each market. One key area, as I see it, is for cloud applications to be customized for SMEs that have not heavily invested in IT up to now. These services should not simply be copies of general applications designed for the needs of large enterprises but take into account their business characteristics and conditions.”

Furthermore, a close eye should be kept on the trends in enterprise and Cloud services. For example, for large businesses, cloud-based general clerical software has come full circle but industry verticals, such as healthcare, education, retail and logistics are looking to reduce their investment in traditional IT solutions making them likely prospects as customers.

An Advantage of Cloud business is Synergy.

Cloud business is evolving to be more than just connecting IT resources and services. The next wave will address the specific needs of vertical industries such as healthcare, education, retail and government. This will result in increasing amounts of data being accumulated from outside the cloud, and the growing need to integrate services and processes will require a wider range of sensors and devices to be linked with an Operator’s Cloud.

Increasingly, Machine-to-machine (M2M) communications are coming to the forefront of services focused on vertical industries. This is a prime opportunity for Operators to both start and expand a Cloud business.


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