Operators must tap the cloud

Jan-Jaap Jager/Parallels
25 Oct 2010

The next big opportunity for traditional operators, in these times when voice is no longer king, is coming up with new offers such as cloud services. Telcos that don’t get involved in the race early on may find themselves missing out on valuable revenue opportunities to other ICT service providers.

Operators are in a position to capitalize on cloud services because they own the underlying network infrastructure and they have existing commercial relationships with millions of customers. In general, all customer segments will adopt -- or already use -- some cloud services, whether its enterprise, small business, consumer, education or government. Telcos must provide cloud offerings that align with the specific market being addressed, which have been focused on the enterprise and public segments.

While the cloud opportunity in the enterprise and government sectors is exciting in terms of potential deal size, our experience has shown that the fastest adoption of cloud services is among SMBs where the cloud allows for fast deployment of IT services in a cost-effective and flexible manner. These are the businesses that typically have very little in terms of their IT resources and can benefit the most from the cloud services and applications.

Asia is a huge growth area for enterprise cloud services, representing an estimated 38% of the world’s SMBs. Virtually all SMBs need a “web presence” and simple email. However, the majority of them would also greatly benefit from a range of applications, including some which were traditionally available only to bigger organizations. These are messaging and collaboration, backup and archiving, customer relationship management, and hosted PBX.

SMBs are and will be adopting these cloud services very quickly -- partly because it improves productivity and efficiency, and partly out of necessity since they do not have an internal IT department.

According to industry analysts at IDC, global SMB IT spend was close to $500 billion last year. Every IT player -- from Microsoft and Google to one-person IT consulting shops, hardware vendors, distributors, telcos and web-hosting companies -- are trying to capture both mindshare and dollars that the cloud will bring.

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