Ian Moyse, Cloud Industry Influencer
The telecommunications sector remains, for the majority part of the legacy world. It may not appear so to many, as customers often interact with the web and cloud-based interfaces and apps at the front-end, which hide the traditional infrastructure and process challenges under the surface at the telco provider.
This is mostly a plaster onto an old legacy architecture wound. Most are still utilising monolithic applications on-premises or at the most make a lift- and- shift into a private cloud. This means sluggishness in development, testing and release processes, slowing down go-to-market initiatives. It lumbers the organisation with a ball and chain, preventing agility in a faster moving, more demanding customer world, all while costing more.
Today’s telecom providers need to review other technology sectors and take heed now of the disruption that not becoming ‘new’ is causing. Legacy approaches leave you in the duck-on-water model; It may look smooth to the customer on the surface, but underneath, wild kicking is going on. As each day passes, the demand at the surface is growing, and by not addressing these hidden challenges, organisations are left with expensive infrastructure models requiring complex capacity planning, growing hardware Capex needs and a time-to-market that will allow competitors to take the lead. Waiting until a competitor starts to disrupt is too late! By this time, they will have already undertaken the transitional digitisation work, starting your journey will leave you in a heavy catch-up mode, which is costly, risky and painful!
The core components of any telephony offering are network, connectivity, service delivery and billing management, alongside engagement with the customer, a series of complex recurring processes that are better suited to cloud based platforms. Recently, these have most commonly been extended out to private cloud architectures which have testing and disaster recovery hosting built into the design. Whilst this approach, like in many technology sectors has been a step up from the on-premise solutions, the world has moved on quickly to a point where the public cloud has removed its initial limitations to deliver near private cloud services at far lower and diminishing costs.
Accelerating digital transformation is key. In the cloud, game-changing technology is appearing rapidly and in an affordable commercial fashion. The barrier to overcome, as I have written and spoken on before, is no longer a technology one, but the human barrier. The resistance comes from the ‘perceived pain of change’! Deferring the pain is an easier decision than taking it on sooner. Everyone has enough on their plate, transformation involves change of process, complex discussions, often a step back before five steps forward and some level of risk to be mitigated. Having to learn something new, take on extra work and engage with some risk is not something the average person seeks out. Hence, the clearer the gain and upside, the sooner you need to start with strong leadership to drive past these human barriers. Many do not engage change until the pain of not changing outweighs that of the effort to do so.
Utilising the public cloud feels harder than the prior lethargy of doing nothing. And whilst there are some minor gains in the model of ‘lifting and shifting’ an existing application to a private cloud, they are not of the scale achievable now from the public cloud, nor could they really be considered a true digitisation initiative.
What is required is a transformation to cloud native-ness, utilising the true possibilities of the cloud in as far reaching a way as possible. Public cloud now empowers you to benefit from elasticity, both technically and commercially, an auto-scaling of resources in a pay-per-use model which delivers dramatic cost and operational benefits. The capability such platforms enable have greater reach than simple cost savings and flexibility, but extend to new revenue-generating opportunities. It means being able to address new market paradigms, such as those coming from the Internet of Things (IoT) and the coming 5G.
Telcos now need to take the step to address their platforms to support the market growth and customer demand, and need to do so quickly. Cloud, IOT, 5G and other emerging technologies are accelerating and in parallel to customers’ expectations, the situation for telco operators get more fickle than ever before.
Core BSS applications for telco, based on the public cloud, from the likes of Optiva is going to enable ‘some’ who choose, to be the makers and shakers who ‘take’ the market on the new cloud journey. The ability to have real time billing and charging on the public cloud and deliver a greater user experience, faster time-to-market and more agility, all at a lower TCO, is going to be critical to a CSP’s ability to stay ahead of the competition and to maximise their revenue opportunity – throughout all of the challenges they face.
Tools and systems enabling rapid rate card deployment, any-play offerings, storefront provisioning and cross-service promotions are going to be essential; where the market could previously sustain months for delivery is fast becoming weeks to days as customer experience expectations heighten and the need to react quickly to competitors grows.
Customer experience and the demand for a shortened and personalised experience is industry reported as becoming the number one differentiator, outweighing price and feature set. With this the case, the window to get your house in order is closing. For those that successfully deliver on this need, the ability to retain margins and still gain market share is the panacea laid out. Reducing churn whilst increasing attraction is a mantra not easily achieved and is expected to become harder as the buyer dynamics continue to shape and change. Now is the time to achieve deeper integration.
Public cloud is here now, established, proven and changing the way everything is delivered. CSPs need to take heed and move now, not in 5 years’ time. The speed of change needed previously allowed the telco market to change at a slower pace, but now as other industries move faster and faster, the excuse that this is the way telcos have been, will not wear. With a clear focus on top and bottom line pressures in a market getting ever more competitive by the day, CSPs are under growing pressure to achieve cost savings and operating efficiencies whilst increasing the service quality and flexibility to clients, a tough ask in any sector.
What Optiva has launched is a key opportunity for the telco market to grasp this opportunity, to achieve change and to better serve the market opportunity, gaining an agile foundation for continued success. Basing it on Google Cloud Platform with its flexibility and scale, is allowing Optiva customers to get the best of both worlds, cost-effective elastic compute power alongside a reliable and fast platform. With customers such as Truphone already adopting Optiva and reporting expectations of 40-60% reduced TCO against their OCS costs with accelerated speed to market, others will quickly be jumping on board to be early out of the gate.
Operators need a clear plan of action to revitalise their services for agility in the world we now live in which is only going to get more demanding! There is no going back, customers live in a world of choice and greater freedom to move provider than in previous times. Ignoring this fact and not reviewing public cloud options now will cost operators millions in loss of both revenue, market opportunity and competitive displacement, not to mention direct costs of their OSS/BSS stacks. It is time right now for CSPs to start their diligence on public cloud offerings, both for their short term and long-term success and brand reputation.