Why Telcos Are Still Moving to the Cloud

November 9th, 2018 by · Leave a Comment

This Industry Viewpoint was authored by Stacey Kuyfwriter and content strategist for atmail

The cloud is no longer new technology. In fact, according to research by Citrix, by 2025 it will be so entrenched in our business processes that the term will be obsolete. This is because the cloud will simply be synonymous
with business, and organisations storing their data on-premises will be the minority.

Just like many other industries, telecommunications has already faced disruption from the cloud. And the future of many telcos will depend greatly on how well they can capitalise on everything that technology like the cloud, automation, and AI has to offer. There are many opportunities here, with the global market for cloud computing predicted to be more than $241 billion by 2020.

The cloud gives telcos the ability to scale rapidly. Customers can grow their businesses as needed, without worrying about on-premises limitations like bandwidth, CPU memory, and hard-drive space. Vodafone and AT&T are already using Network Functions Virtualisation (NVF) which allows them to reduce their reliance on hardware and instead use software which can be located on servers anywhere in their networks.

Telcos can also more easily design, deploy, and test new services within the cloud, allowing them to stay at the forefront of innovation. The cloud allows businesses of all sizes to achieve their goals, while their customers can also adopt the technology for their own business objectives. It’s easy for telcos to position their businesses as single-service providers- encouraging customers to use the cloud services available from the same telcos that keep them connected.

The cloud also presents an excellent opportunity for revenue generation. Messaging and voice message services are becoming extraneous as customers use apps like Facebook, WhatsApp, Skype, and Facetime instead. This is having a big impact on revenue, and it’s likely that revenues will continue to decline unless telcos can find new offerings for customers.

At the same time, customers are using more data than ever before. This presents a huge opportunity for telcos, as 5G is slowly rolled out and the IoT connects consumers to everyday objects. From smart watches to smart thermostats, these devices will be constantly sending and receiving data- requiring additional infrastructure services.

To remain relevant, telcos need to make their businesses as cost-efficient and agile as possible, while identifying potential growth areas. Connectivity is now just another utility and consumers will happily switch providers for a better deal. That’s why it’s crucial that they focus on the services that customers already want. These include storage, SaaS enablement, and hosting on demand.

Another benefit for telcos using the cloud? The ability to move to an OPEX model. For telecommunications companies that have been using a CAPEX model, which includes expenditures like servers and hardware for on-premises use. A shift to an OPEX model means that they’ll only pay for ongoing cloud costs- allowing them to limit large capital expenditures.

According to Cisco, 70% of all internet is already video, and this is expected to hit 90% by 2020. For users to have the best possible experience when streaming music, movies, and more, that connection needs to be lightning fast.

By moving to the cloud, telcos can stay competitive, as they can use analytics to better price and manage their services based on user traffic predictions. They can also use big data to tap into potential opportunities for revenue and develop new offerings to make up for declining revenues.

By using the cloud, telcos no longer need to worry about securely storing data and maintaining hardware. They can instead focus on innovation, utilising this technology to offer a broad new range of products, such as cloud storage which can be integrated into mobile plans. Forward-thinking telcos will recognise their limitations while considering opportunities for growth. They can do this by partnering with cloud specialists or by buying external cloud expertise.

Stacey Kuyf is a writer and content strategist for atmail, a cloud mail company for telcos, hosting and service providers. Follow their news and updates here.

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Categories: Cloud Computing · Industry Viewpoint

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