Why were carriers left out? The answer is simple: some of their models are cost based. Even though carriers have seen up to 70% ramp up in their mobile business, there are still challenges that they have not tackled. How do you maintain revenue when there are a finite number of customers to penetrate the mobile space? Competition is forcing carriers to be creative in developing new services and innovative products so that with their existing customer base the priority is customer retention and increasing average revenue per user.
Because both consumers and enterprises have become savvier about their spending, providers now are looking at monetizing their networks, technology and equipment through differentiated services that transform the customer experience. And it isn't always about price. Even in the recession, companies introduced high-priced products that transformed customers' experiences, for example, the iPhone, and these products sold well despite the economic conditions.
Why? What is most interesting is that the iPhone technology did not introduce anything new to precipitate these sales. What the company did was focus its capability on how a consumer interfaced with the phone. Apple made it so simple that consumers purchased it in droves.
The situation is similar with Amazon's EC2, which is not a new cloud hosting service. The company focused on the interface and created a front-end called Instance, which essentially walks the user through the server set up process, resulting in a start up time in a matter of minutes.
Adding value
When markets initially faltered, analysts were screaming cost reductions, operational efficiency, consolidation and optimization. However, after surveying global service providers, even in this type of recessionary market, providers cited how to continue adding customer value as the No. 1 priority and how to differentiate and remain sustainable. Their No. 2 priority was service innovation and finding those that aligned with their business initiatives to continue delivering customer value. Even in tight economies people were willing to pay for a differentiated experience.
In a negative economy or the perception of a negative economy, two things tend to happen: companies rely on advanced technology products because they have less staff and need the technology to accommodate for this reduction to maintain productivity and the tend to outsource more because they reassess and focus on their core competencies. These scenarios provide carriers with the ideal opportunity to penetrate the enterprise space.
Although carriers have more opportunities for managed services, they need to have the capability and trained staff to offer and maintain managed services to ensure they become trusted business partners vs the carriers that offer just a less expensive internet pipe.
As managed services gain momentum, IT is moving from technology to technology-as-a-service and carriers are in a strategic position to take advantage of that transition. When we look at the opportunities for the carrier, the first factor in their favor is that they know how to build highly reliable, scalable IP networks. They also know how to design and support large, complex networks as well as set up contracts to manage SLAs.