Six Tips for Telcos to Cross the Cloud Chasm

cloud computing in telcosCloud technologies are changing both consumer and business behaviors. Breaking down barriers associated with storage and compute power, cloud solutions are freeing users from the limits of their smartphones, tablets and PCs allowing them to access unlimited resources and pay only for what they need. But how do providers of cloud services and solutions move beyond their initial offerings to these consumers and business customers and cross the “cloud chasm?”  Gartner Group released a report recently estimating that the worldwide cloud market is worth about $131 billion in 2013.¹ Successfully crossing the chasm will allow providers to capture a greater share of this growth market as well as gain additional cost economies.

Earlier this year, Caroline Chappell, Senior Analyst with Heavy Reading, interviewed 19 service providers from across the globe to better understand their views on migrating to the cloud.² And to no one’s surprise, she found that the majority want to operate as many IT, OSS/BSS and network functions in the cloud as possible. Although many expressed readiness to move further and faster in their cloud initiatives, only a few of the most advanced providers had formalized a long-term strategy.

To help providers cross the cloud chasm, here are six tips.

  1. Foster alignment or adjustments that unite network, cloud and IT organizations. The most advanced providers who are on their third or fourth iteration of cloud services are driving their IT, cloud and network departments closer together. If these groups are not already physically together, consider actively converging or collocating them. You may also want to establish a process to formalize relationships between them in the shape of joint working groups/forums or cross functional teams.
  2. Adopt a “Cloud First” mandate. Establishing and strongly communicating a “Cloud First” mandate will drive scale and give recognition that moving to the cloud means a change in the corporate culture. Corporate culture cannot be changed overnight.   Implementing this policy early on will help decision makers look for opportunities to leverage the cloud rather than make excuses why applications cannot be migrated. Roadmaps from application developers will in turn push vendors to offer cloud versions sooner rather than later.
  3. Establish a center of excellence for cloud.  Creating a cloud center of excellence that combines all the knowledge in cloud, data and network from across the provider. With development typically happening in many different parts of the company, providers are not capitalizing on the skills and learning that may already exist. These silos also have incremental development costs that can be avoided by creating a center of excellence.  Leading providers are beginning to bring initiatives together to create a critical mass of cloud, data and network expertise, exploit the knowledge of different cloud stacks, establish consistent processes and agile ways of working for operational efficiency, benefit from infrastructure and procurement economies of scale, raise the profile of cloud within their organizations and evangelize the benefits of the cloud to the rest of the business.
  4. Start with greenfield products/applications. Re-engineering existing applications that are often tied to hardware platforms can be costly and complex. By focusing cloud initiatives on new applications there are no such barriers.  Time to market has already been reduced with some providers citing weeks rather than months to onboard third party software-as-a-service (SaaS) offers, such as Microsoft Lync.
  5. Buy or outsource rather than build. Most providers recognize that buying or outsourcing provides cost and time-to-market benefits that cannot be achieved with in-house development or customized applications built from scratch. Issues with scalability of customized development can no longer be overlooked. Use of an outsourcer running commercial cloud stacks also spills over to business customer confidence. Providers can see not only a cost benefit but gain new customers who understand the benefits of commercial cloud stacks.
  6. Participate in or monitor closely standards bodies and outsourcing options. Standards bodies such as the ETSI NFV group, Open Networking Foundation, IETF and related standards bodies are helping shift the cloud market across the chasm. By joining or monitoring these and other standards activities, providers can put pressure on vendors and outsourcers to move at a pace that helps propel them to achieve cost economies and win new customers. Leading providers are also lobbying for the creation of vendor ecosystems or seeking outsourcers who can offer the stability and financial muscle of leading IT/network equipment vendors with the creativity and agility of start-up players.

Converting cloud concepts into operational solutions is not easy. Providers need help to cross the chasm to achieve cost economies and capture their fair share of the cloud market opportunity. By implementing these tips and starting proof of concept projects, providers can successfully cross the chasm and get ahead of their competitors. Consider working with outsourcers and vendors who offer best of breed solutions.

[1] http://www.wired.com/insights/2013/03/the-real-market-size-of-public-cloud-services
[2] http://www.alcatel-lucent.com/solutions/cloud

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