Why telcos should offer cloud services

Ray Mota, ACG Research
22 Feb 2010
Competition, cost pressures, and the demand for “anytime, anywhere, any device” services and apps are forcing telecom service providers to consider alternative models for the delivery of IT services.
Service providers regard their networks as a strategic asset capable of driving incremental revenue and increased profitability, but how do they extract maximum value from that asset? This is where a cloud computing services model has an advantage for service providers over their current enterprise IT models. With a cloud computing services model, service providers can insert themselves into the value chain by redefining their roles to expand beyond connectivity and provide Web-based application delivery services.
Here are five reasons why service providers should capitalize on cloud computing for their business and for their customers:
The value proposition
Cloud computing has the potential to affect service providers' operating costs by reducing the hardware and software requirements of their current networks and platforms.
Network architectures that build on optimization and consolidation are a key interest -- also, increasingly, a requirement -- for all service providers. Cloud computing platforms also enable enterprises to provision an infrastructure and add computing capacity on demand. This elasticity promotes rapid deployment of solutions and allows service providers to scale their infrastructure based on demand and consequently to improve time to market for new services.
IT independence
With more employees scattered in global offices or telecommuting, web-based services and applications are perfect for the rapidly changing enterprise workplace. Service providers can increase their revenue and market share and capitalize on web-based application services by communicating and promoting the tangible business benefits to their customers.
Mobile communication, accelerated developments in broadband networking, open source technologies, and web 2.0 have made on-demand services more reliable and affordable. Using cloud-based services, businesses can store more data than on private computer systems, allowing them to save on the processing power and hard disk space required for desktop software while giving them access to an unlimited number of applications.
Additional benefits for businesses -- and selling points for service providers -- include lower costs, improved system performance, reduced software cost, instant software updates, data reliability, universal data access, and hardware/device independence.


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