Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
www.ovum.com 
© Copyright Ovum 2014. All rights reserved. 
Telcos in the Cloud: A Global Status Report 
Camille Mendler 
L...
2 
© Copyright Ovum 2014. All rights reserved. 
Introduction: Some myths need to be exploded 
Myth 1 Telcos are transient...
3 
© Copyright Ovum 2014. All rights reserved. 
Telcos are here to stay in the cloud market 
0 
50 
100 
150 
200 
250 
30...
4 
© Copyright Ovum 2014. All rights reserved. 
Telcos take cloud computing into emerging markets 
65% 
24% 
9% 
2% 
Telco...
5 
© Copyright Ovum 2014. All rights reserved. 
Telco cloud revenues are still small, but growing fast 
1.7% 
2% 
7.5% 
9%...
6 
© Copyright Ovum 2014. All rights reserved. 
Governments buy into operators’ cloud services 
25% 
14% 
11% 
9% 
6% 
5% ...
7 
© Copyright Ovum 2014. All rights reserved. 
CSPs have got what many enterprises want 
15% 
10% 
11% 
8% 
8% 
8% 
49% 
...
8 
© Copyright Ovum 2014. All rights reserved. 
Spotlight: Tata Communications’ IZO illustrates network-centric cloud inno...
9 
© Copyright Ovum 2014. All rights reserved. 
Telcos’ acquisitions focus on space and ICT skills 
20 
15 
7 
4 
3 
2 
2 ...
10 
© Copyright Ovum 2014. All rights reserved. 
Spotlight: NTT Group is creating a global cloud empire 
Division 
Acquisi...
11 
© Copyright Ovum 2014. All rights reserved. 
Warning: A space race is on, but what’s the real asset? 
Since 2010, oper...
12 
© Copyright Ovum 2014. All rights reserved. 
Large enterprises are no longer the primary cloud target 
0% 
10% 
20% 
3...
13 
© Copyright Ovum 2014. All rights reserved. 
Disconnect: CSPs don’t value their best assets enough 
2% 
2% 
4% 
10% 
1...
14 
© Copyright Ovum 2014. All rights reserved. 
More work needed: Clients are not all made alike 
Enterprises that have b...
15 
© Copyright Ovum 2014. All rights reserved. 
Operators are overhauling their cloud sales channels 
Operators are restr...
16 
© Copyright Ovum 2014. All rights reserved. 
Cloud enablement partners have a critical role 
Trusted global brands are...
17 
© Copyright Ovum 2014. All rights reserved. 
Conclusions 
CSPs are here to stay in the global cloud market. 
After s...
18 
© Copyright Ovum 2014. All rights reserved. 
Recommendations to CSPs 
Forget about leadership in the space race. 
CS...
www.ovum.com 
© Copyright Ovum 2014. All rights reserved. 
Thank you! 
Camille Mendler Email: Camille.Mendler@ovum.com Twi...
20 
© Copyright Ovum 2014. All rights reserved. 
Copyright notice and disclaimer 
The contents of this product are protect...
You’ve finished this document.
Download and read it offline.
Upcoming SlideShare
Cloud services for Telco
Next
Upcoming SlideShare
Cloud services for Telco
Next
Download to read offline and view in fullscreen.

Share

Telcos in the Cloud: A Global Status Report

Download to read offline

Communications service providers (CSPs) are serious about cloud computing. They are also a growing force in the global cloud market. Globally, a new telco cloud service is launched every working day of the year. Not least, CSPs build or buy at least 46 soccer pitches of datacenter space every year. This presentation provides a global overview of CSPs' successes and challenges in the cloud.

Related Books

Free with a 30 day trial from Scribd

See all

Telcos in the Cloud: A Global Status Report

  1. 1. www.ovum.com © Copyright Ovum 2014. All rights reserved. Telcos in the Cloud: A Global Status Report Camille Mendler Lead Analyst, Enterprise Services Nov. 25, 2014
  2. 2. 2 © Copyright Ovum 2014. All rights reserved. Introduction: Some myths need to be exploded Myth 1 Telcos are transient and trivial players in the cloud market. Myth 2 Telcos’ cloud strategy consists of copying Amazon Web Services (badly). Myth 3 Telcos can’t innovate in cloud services.
  3. 3. 3 © Copyright Ovum 2014. All rights reserved. Telcos are here to stay in the cloud market 0 50 100 150 200 250 300 350 400 2009 2010 2011 2012 2013 2014 CSPs CSPs selling cloud services Africa Middle East Latin America North America Eastern Europe & CIS Asia Pacific Western Europe 1H for 2014 Source: Ovum Telecoms Cloud Monitor More than 330 communication service providers (CSPs) are active in the cloud market today. Globally, a new telco cloud service is now launched every working day of the year. On average, CSPs build or buy 46 soccer pitches of datacenter space per annum.
  4. 4. 4 © Copyright Ovum 2014. All rights reserved. Telcos take cloud computing into emerging markets 65% 24% 9% 2% Telco cloud service availability by country type, 2010 High income Upper middle Lower middle Low income N = 46 countries 52% 28% 15% 5% Telco cloud service availability by country type, 2014 High income Upper middle Lower middle Low income N = 98 countries Operators are often the largest, most visible cloud service providers in lower-income countries where global cloud players are unlikely to set up direct operations. Availability of telco cloud services by country 1H for 2014 Source: Ovum Telecoms Cloud Monitor
  5. 5. 5 © Copyright Ovum 2014. All rights reserved. Telco cloud revenues are still small, but growing fast 1.7% 2% 7.5% 9% Rostelecom Orange Business Services T-Systems NTT Communications Group Cloud-related percentage of revenues Estimated 2013 revenues. Note: Cloud definitions vary by CSP, notably treatment of UCaaS and professional services. Source: Ovum Most CSPs report annual revenue growth in 25%-30% range. 2014 is tipped to be a record year for many, per our interviews. T-Systems has already reported 40% year-on-year growth in 1H14. However, cloud services often replace legacy offers, and in the short term this substitution effect may mean zero growth or decline in some telcos’ overall revenues. 116 182 764 1061 Rostelecom Orange Business Services T-Systems NTT Communications Group Cloud-related revenues, selected operators ($m)
  6. 6. 6 © Copyright Ovum 2014. All rights reserved. Governments buy into operators’ cloud services 25% 14% 11% 9% 6% 5% 5% 5% 5% 5% 12% Telco cloud customer wins by industry, 2013 Government Manufacturing Retail Professional services Financial services Health Insurance Education Media and broadcast Transport & logistics Other 36% 19% 13% 3% 3% 2% 2% 2% 2% 2% 16% Telco cloud customer wins by service, 2010–14 IaaS UCaaS ICT services Healthcare mgmt Government cloud Security Storage Vehicle / fleet mgmt ERP Content distribution Other 1H for 2014 Source: Ovum Telecoms Cloud Monitor Publicly announced contracts reflect only a proportion of all activity, but are indicative of market trends. Central and municipal governments are frequent buyers of operators’ cloud services. IaaS (virtual private) is a highly popular service, usually sold with professional services support.
  7. 7. 7 © Copyright Ovum 2014. All rights reserved. CSPs have got what many enterprises want 15% 10% 11% 8% 8% 8% 49% 51% 48% 49% 40% 38% 36% 39% 41% 43% 52% 54% 0% 20% 40% 60% 80% 100% Co-location services App performance monitoring for cloud workloads IT infrastructure management/outsourcing End-to-end SLA across network and cloud Professional services (e.g. security) Network services (e.g. MPLS, Ethernet) Enterprises: Additional capabilities valued in selecting a cloud infrastructure provider Unimportant Desirable Very important Enterprise cloud buyers are beginning to recognize the power of the network – and the need to orchestrate compute and connectivity. CSPs - like AT&T with its NetBond strategy – are differentiating by providing secure, flexible and increasingly on-demand cloud connectivity. Consequently, telcos are rising in the ranks as preferred cloud service providers – in a few countries they are now the top choice. N=2,708 ICT decision makers Source: Ovum 2014 Telecoms Customer Insights Survey - Enterprises
  8. 8. 8 © Copyright Ovum 2014. All rights reserved. Spotlight: Tata Communications’ IZO illustrates network-centric cloud innovation Solutions around the ‘best effort’ Internet. Offers secure access to public and private clouds via the Internet using internally-developed deterministic routing technology. Available in 34 countries; 100 planned within 18 months. Claims up to 30% savings compared to static VPN connections to cloud services. Ultimately, telcos can differentiate best by providing the widest range of options to enterprises as they match cloud type and connectivity to specific workload and budget. •IZO Internet WAN: business-class SLAs over the public internet in partnership with 20+ service providers •IZO Private: private connectivity to cloud service providers including AWS and Microsoft Azure •IZO Public: prioritised content for Tata Communications’ enterprise customers
  9. 9. 9 © Copyright Ovum 2014. All rights reserved. Telcos’ acquisitions focus on space and ICT skills 20 15 7 4 3 2 2 8 Telco cloud acquisitions by type, 2010–14 Datacenter ICT services Unified comms & collaboration Security Application management IaaS Content distribution Other Note: investments are allocated to the investor’s headquarters region 1H for 2014 Source: Ovum Telcos have spent $37.5bn on cloud-related assets since 2010, with datacenters the most common type of acquisition. There is also a distinct trend of targeted smaller purchases to build competence in a specific area, such as video collaboration, security, or system integration skills. 19,933 10,535 4,368 1,707 493 320 289 Telco cloud investments by region, 2010–14 ($m) Asia Pacific North America Africa Western Europe Eastern Europe & CIS Middle East Latin America & Caribbean
  10. 10. 10 © Copyright Ovum 2014. All rights reserved. Spotlight: NTT Group is creating a global cloud empire Division Acquisition HQ Value Comments Dimension Data NextiraOne France $600m* Ex-Alcatel convergence integrator has 43,000 clients. Teliris US $50m* Video-as-a-service provider complements DiData’s UC offers. Nexus US $200m* IT consultancy boosts western US and mid-market presence. NTT Com Virtela US $525m Network services provider Virtela has network functions virtualization skills. Raging Wire US $350m Hoster has 60,000 square meters of space in high-power datacenters. Arkadin France $300m* More than 30,000 clients globally. Several operators (including CHT, HGC, Orange, and SingTel) resell Arkadin’s UC services. BDG Germany $20m* Security consulting for medium to large firms. Infotrust AG Switz. $25m* Managed security services and consultancy. NTT Data Everis Spain $509m Integrator and software developer has a footprint across Latin America, a region where NTT wants to grow. Optimal Solutions Integration US $150m* SAP specialist and IT consultancy with mid-market, Fortune 1000 company focus. NTT Group Solutionary US $150m* Cloud security services provider to work across NTT Group. NTT Group acquisitions, 2013–14 *Estimated deal value Source: Ovum Telecoms Cloud Monitor NTT Group is the world’s most acquisitive telco cloud provider. In the past 18 months NTT has spent an estimated $3bn across its divisions. NTT’s challenges are to ensure collaboration across often competing groups and to integrate its various sub brands.
  11. 11. 11 © Copyright Ovum 2014. All rights reserved. Warning: A space race is on, but what’s the real asset? Since 2010, operators have added more than 1 million square meters of datacenter space to their asset base. Ultimately, AWS, Google and Microsoft dwarf these investments. Unless there’s proven scarcity, CSPs shouldn’t be distracted by real estate and power plays. Telco datacenter space under construction or acquired, 2010–14 1H for 2014 Source: Ovum Telecoms Cloud Monitor North America 405,279m² Latin America and the Caribbean 11,000m² Africa 11,472m² Middle East 15,800m² Western Europe 139,000m² Eastern Europe and CIS 17,870m² 553,152m² Asia-Pacific = 10,000m² KEY
  12. 12. 12 © Copyright Ovum 2014. All rights reserved. Large enterprises are no longer the primary cloud target 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 Services launched Telco cloud services by customer targeted Large enterprises SMEs Consumers Public sector Wholesale Note: some services target more than one customer segment. N = 339 operators 1H for 2014 Source: Ovum Telecoms Cloud Monitor Telcos initially targeted large enterprises, but are broadening their cloud portfolios. Small businesses (including SoHos) are the emerging hope for revenue growth. However, CSPs have not solved the conundrum of how to tell sell these organizations profitably.
  13. 13. 13 © Copyright Ovum 2014. All rights reserved. Disconnect: CSPs don’t value their best assets enough 2% 2% 4% 10% 11% 22% 46% 53% 56% Other Consulting / integration skills Security expertise Customer service Breadth of cloud portfolio End-to-end service mgmt Local presence Network ownership Client base What ICT vendors say 1% 12% 13% 20% 28% 32% 36% 57% Consulting /integration skills Customer service Security expertise Breadth of cloud portfolio Client base Local presence End-to-end service mgmt Network ownership What CSPs say Shameful: CSPs are overlooking the extraordinary value of a captive customer base. Many cloud operations are run separately – operationally and commercially - from other services. Source: Ovum 2014 Telecoms Cloud Global Insights Survey N=135 CSPs N=94 ICT vendors What are telcos’ biggest strengths in the cloud market?
  14. 14. 14 © Copyright Ovum 2014. All rights reserved. More work needed: Clients are not all made alike Enterprises that have bought a cloud service from an online marketplace 14% North America Latin America Developed Asia Emerging Asia Europe Middle East & Africa N=2,708 ICT decision makers Source: Ovum 2014 Telecoms Customer Insights Survey: Enterprises 33% 20% 16% 34% 23% Key > 30% 20% to 30% < 20% Willingness to buy online varies dramatically by region, by size of company and also by industry. CSPs must invest in better customer segmentation to refine sale channel choice.
  15. 15. 15 © Copyright Ovum 2014. All rights reserved. Operators are overhauling their cloud sales channels Operators are restructuring their sales channels to improve reach, volumes and margins. For most, only 1 in 10 cloud-related sales transactions are online. Telcos are using more staff with hybrid customer support and commercial skills to facilitate sales, and nontraditional channels such as banks are becoming part of the mix. Service provider Partnership type Location Partner(s) Comments Belgacom Alliance Europe Numergy (SFR and Bull), KPN, PT The Cloud Team Alliance aims to provide a superior pan- European alternative to North American and Asian cloud service providers encroaching on the European market. Colt Technology Services Franchise Europe IT resellers and integrators Colt’s Ceano franchise program provides off-the-shelf services to service providers targeting small firms. Eircom Resale Ireland Amazon Web Services (AWS) The Irish incumbent has successfully resold the AWS portfolio to many private and public sector enterprises. Interoute Two-tier distribution Europe Arrow ECS Interoute’s IaaS is resold to 12,000 resellers through the distributor’s Arrowsphere cloud marketplace. Safaricom Joint venture Kenya KCB JV with local bank provides all services small firms need to run including banking, voice, data, and cloud services. SE Telecom White-label brokerage Denmark Also Holding The SE Cloud Factory sells exclusively to partners using IT distributor Also’s Nervogrid brokerage platform. Selected sales partnerships Source: Ovum
  16. 16. 16 © Copyright Ovum 2014. All rights reserved. Cloud enablement partners have a critical role Trusted global brands are a core element of operators’ cloud portfolios – a good example is the ubiquitous Microsoft Office 365. Global brands draw in customers, while niche local partners differentiate portfolios. Local ISVs usually offer more generous revenue shares, reflecting their reliance on telcos for exposure. CSPs need to keep a balance between partner types to achieve higher blended margin overall. Differentiation among cloud enablement vendors is based increasingly on go-to-market, not just technical, capabilities. 70% 1% 1% 1% 1% 1% 1% 1% 1% 2% 2% 4% 5% 7% 0% 10% 20% 30% 40% 50% 60% 70% Others Oracle Amazon Web Services Parallels Citrix Google HP F-Secure SAP IBM EMC VMWare Cisco Microsoft Telcos’ top cloud technology partners N = 1,473 partnerships Source: Ovum Telecoms Cloud Monitor, 1H14
  17. 17. 17 © Copyright Ovum 2014. All rights reserved. Conclusions CSPs are here to stay in the global cloud market. After some false starts, CSPs are now carving out distinct market roles for their local markets and customer bases. CSPs are steadily building credibility in hybrid cloud services. There is less bluster about competing head-on with commodity public cloud players, and more discussion about orchestrating cloud services. CSPs still covet earth-bound assets. Despite fundamentally different business models, most operators maintain a co- location and hosting business while also touting various flavors of IaaS. Customer self serve is an exploded myth – for now. Most customers will not buy without support and encouragement, even if cloud services are free to try.
  18. 18. 18 © Copyright Ovum 2014. All rights reserved. Recommendations to CSPs Forget about leadership in the space race. CSPs will never catch up with the gargantuan investments of pure-play cloud providers – Google’s planned investment in a new $770m datacenter in the Netherlands is an example of the scale on which such providers invest. Focus on orchestrating hybrid clouds. Competing with price discounters such as AWS is a race to the bottom, but there is sustainable value in managing workloads between public and private clouds and helping enterprises navigate national data sovereignty rules. Do not squander the datacenter interconnect opportunity. The popularity of hybrid clouds will also fuel demand for secure, high-performance links between enterprise, telco, and other third-party service provider clouds. Invest in the art of selling – using humans, not platforms. Despite the ability to automate the ordering and provisioning of some cloud services, local culture, technology knowledge, and degree of supplier trust will continue to demand human engagement in cloud sales.
  19. 19. www.ovum.com © Copyright Ovum 2014. All rights reserved. Thank you! Camille Mendler Email: Camille.Mendler@ovum.com Twitter: @cmendler
  20. 20. 20 © Copyright Ovum 2014. All rights reserved. Copyright notice and disclaimer The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited. Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited.
  • FarhanMOHAMED2

    May. 8, 2017
  • manaspadegaonkar

    Apr. 25, 2017
  • TipaKaka

    May. 12, 2016
  • richardoh

    Jan. 24, 2016
  • gsquillace

    Nov. 18, 2015
  • kcyoon

    Mar. 11, 2015
  • GinaMellott

    Feb. 25, 2015
  • serviola

    Jan. 21, 2015
  • alcaond

    Dec. 12, 2014
  • ananinslides

    Nov. 28, 2014
  • camillem

    Nov. 27, 2014

Communications service providers (CSPs) are serious about cloud computing. They are also a growing force in the global cloud market. Globally, a new telco cloud service is launched every working day of the year. Not least, CSPs build or buy at least 46 soccer pitches of datacenter space every year. This presentation provides a global overview of CSPs' successes and challenges in the cloud.

Views

Total views

3,575

On Slideshare

0

From embeds

0

Number of embeds

59

Actions

Downloads

180

Shares

0

Comments

0

Likes

11

×