Cloud Partnership Strategies -by M Mudassar

Version: 01 Cloud Partnering Strategic Insights 15 Sep, 2012
Reference: NLOB-LIP-09/01 New Line of Business – ICTE & Mega Projects Page 1
New Line of Business
ICTE & Mega Projects
Telco Cloud Partnering Strategies – Intelligence, Insights, Implications
By Muhammad Mudassar: Head Presales & Solutions Architecture, New Line of Business, Qtel Qatar.
September 2012
Summary — The role of Telco 2.0 has evolved from a mere
communication service provider to that of an IT solution full
service provider. To remain competitive and even relevant
in the new Telco world, telecom operators need to develop
strategies to effectively expand their business offerings with
shorter time to market.
Telco Cloud partnering strategies Summit has been
organized to help Telcos make sense of the regional and
global cloud landscape with first-hand intelligence, case
studies and expert insight covering the entire cloud
ecosystem. The focus is on ways Telcos can start to work
together with the key players in the cloud space to leverage
their core assets to fully exploit the upcoming opportunities
and at the same time create valuable new revenue streams
to make up for the declining legacy ones.
This post-event report aims to give Qtel Qatar key ICTE
stakeholders – Senior Executive Management of Marketing,
Sales & Services, Marketing and Business Planning –
strategic insights and understanding of challenges Qtel is
facing in cloud space and how to leverage its strengths via
partnership and strategic alliances.
Cloud computing has taken off
Telcos need trusted guiding hand to fulfill ambitions at own
pace
similar size/industry
capabilities
business
I. BUILDING A CLOUD READY BUSINESS STRATEGY
Cloud has changed the game and many growth markets
are maturing rapidly in the cloud computing space. The
lines between industries are blurring and everyone is after
the same consumers. This is causing disruption in the Telco
industry, for operators and their partners. Greater levels of
creativity are needed to address the following issues:
 The vertically integrated Telecoms business model is
under attack from all sides: tougher regulation, new
technologies, new entrants, and advancing customer
expectations.
 P/E ratios suggest little investor belief in this
improving. They have low confidence in 'converged' or
triple/quadruple-play bundles providing high returns.
 Operators are making investment decisions in Network
& IT, Products & Services, and Mergers & Acquisitions
without a clear view of the future.
 're-thinking the strategic role of the operator' is a
key priority.
 There is an urgent need for all players in the telecoms
value chain to review and renew their business models.

 Fortunately telecom's companies possess a whole host
of assets that could be exploited much more to support
new, sustainable market growth.
 The key is for Telcos to create open platforms that help
other service providers (enterprises, SMEs and
government) interact with end-users in more efficient
ways than they can today.
The 'two-sided' Telco 2.0 business model has
consequences for the design of existing services such as
conventional voice, messaging and data/broadband
products (e.g. "What to learn from - and how to compete
with - Internet Communications Services") and also creates
opportunities to create new revenues and B2B Platform
Services.
 A new ‘Telco 2.0 Opportunity Framework’ for planning
revenue growth;
 The critical changes needed to Telco innovation
processes;
 The strategic priorities and options for different types
of Telcos in different markets;
 Best practice case studies of business model
innovation.
Sell the cloud to secure the core
Communication service providers should remember that
cloud computing can – and must – defend the core. The
core is broadband, whatever their aspirations to become
digital media outlets or ICT service providers.
Using cloud services, Telcos have a multi-billion dollar
opportunity to change the dynamics of ICT wallet share.
Nevertheless, Telcos’ cloud services must fulfill a primary
function of securing revenues on the network assets that
make Telcos positively different from pure-play cloud
service providers.
II. PERFECT STORM FOR CLOUD TRANSFORMATION
Consumerisation of IT offers a perfect storm for cloud
transformation for Telcos. With utility based computing,
concepts of consolidation, optimization, automation and
management of IT resources have become key drivers for
Telco’s to offer complex cloud solutions even by building
confederations or brokerage platforms. Cloud computing
offers strategic agility to telecom operators through:
Telco’s are strategically well positioned with its massive
infrastructure, economy of scale, E2E service delivery and
assurance mechanism, set to reap the benefits of the cloud
innovation wave, however the challenges it face include an
effective Telco to IT organization transformation, Go-To-
Market Strategy, Product development team and
Sales/Support team capabilities, customer care and overall
service value chain control. Therefore many leading Telcos
have setup separate business units and special teams to
tackle new business / cloud business.
Economics of cloud computing is more than just hard-
dollar saving achieved through automation of orchestration
and provisioning (traditional 40 days to cloud 5 minutes)
III. THE JOURNEY TOWARDS CLOUD
Cloud is a journey and not a destination. Though smart
Telcos can strive to tap on their existing infrastructure for
transition into cloud, there is significant investment and
experience required when expanding their IT

infrastructure. Thus smart partnering with ICT solution
providers is a must, so as to shorten the time to market and
strengthen the market leadership position.
The complexities involved in a successful cloud journey
include challenges such as:
Success Factors:
 Broadband, and increasingly mobile broadband, is
the anchor service that Telcos must support and
integrate into their cloud service propositions.
Telcos must not seek to simply copy pure-play
cloud service providers; they must emphasize how
they positively differ.
 Telcos must also suppress the urge to silo cloud
services into the ‘ownership’ of a particular
division: Cloud is a consumption model for digital
goods which touches all customer segments – as
well as Telcos’ internal processes.
 Telcos can act as a distribution channel for third-
party cloud services. But a central role in the cloud
value chain – and a bigger share of the revenue pie
– is sought. Reflecting this desire is the growing
focus on IaaS.
 Telco must not re-architect the boom and bust cycle
of the Enron Era. Two duties are clear: To assert
service differentiation and to lower costs. In a post-
PC world, Telcos must remember that their ability
to secure, mobilize and democratize access to cloud
services is increasingly valuable.
Recommendations
Secure core income: Cloud services must drive usage
of Telcos’ broadband networks and secure
customer loyalty.
Differentiate, don’t copy: Telco’s must emphasize
their multi-device and multi-platform cloud service
delivery and support capabilities.
Remove silos: Telco’s must develop a holistic cloud
strategy that delivers both go-to-market and
operational benefits across their customer bases
and business processes.
Apply the power of consumerization:
Consumerization of the enterprise is a weapon to
use proactively to drive cloud service demand.
Beware cloud hypermarkets: Brokering apps, storage
and compute services mustn’t downgrade a Telco’s
differentiators in the cloud ecosystem.
Pursue open source: Open source cloud stacks are still
maturing, but could improve Telcos costs and
competitiveness.
Promote trust over cost: Telcos must find new ways to
help SMEs to do business using the cloud, not just
cheaper ways. Trust is a differentiator.
Verticalize the SME universe: Telos should market to
large subsegments within their SME universe.
Sizeable groups exist where discrete targeting is
justified.
Don’t downplay broadband: Telcos should promote
services that offer fundamentally new ways for
SMEs to do business using assets that Telco control.

IV. PARTNERING FOR CLOUD ENABLEMENT
According to Informa’s Telecom Cloud Monitor, the
average Telco works with almost 16 cloud enablement
partners, Many relationships simply involve SaaS resale,
but more complex relationships are also common.
Cloud enablement can be defined as a sub-set of telecom
managed and professional services, divided into two inter-
related types.
Go-to-market services involve helping Telcos to sell cloud
services to end customers.
Operational services, meanwhile, may include the construction
and operation of cloud service infrastructure, but also the
migration of Telcos’ existing processes to the cloud’s
operational model, such as provisioning, billing and service
orchestration.
Telco’s leading partners illustrate the diverse, multi-faceted
nature of cloud enablement. They included:
• Microsoft: Over Twenty eight Telcos developed and
launched services (largely Office365) with Microsoft in 2012.
• Cisco Systems: A leading unified communications and
collaboration (UC&C) provider, Cisco was also a global IaaS
enabler with EMC and VMWare.
• CE On-Demand: The Hungarian Office365 syndication
partner helped Telcos in Austria, Bulgaria, Hungary, Poland
and Slovenia.
• Google: GoogleApps won support as far afield as the
Maldives with Dhiraagu, but also major Telcos like Vodafone
Germany.
• Dimension Data: The NTT Group subsidiary provided its
onecloud IaaS platform to Telcos including BSNL, Hutchison
Global, Indosat and PLDT.
• Parallels: The vendor’s cloud-service automation tools
helped Charter Communications, KDDI and KT in 2011.
• NEC: Most prominent in Telefonica Espana, NEC’s SaaS
enablement services extended to Latin America, and Telcos
like MTS Belarus.
Today, the transition to cloud-based operations ranks
among Telcos’ top three operational investments for the
2012-13. Ultimately, telecom cloud market dynamics will
favor enablers that can provide a lifecycle of services – and
shared reward.
Recommendations
Demand gain sharing: Favor partners willing to share risk
and reward.
Evaluate wider partnership benefits: If a partner’s
proposed financial terms are unfavorable, consider if the
cloud service can act as a loss leader to secure broadband
subscriptions before walking away.
Streamline partnerships: Look to lifecycle partners that
can simplify partner onboarding and management burden.

What Characteristics can define QTEL as a ‘cloud service
aggregator/broker’?
Qtel NLOB believes that the boundaries between cloud and
non-cloud are not rigid. As enterprises embrace new ways of
working in which the divisions between private and
professional lives begin to dissolve, they need service partners
with a new perspective for a new age. QTEL NLOB aim to
positions Qtel as the single-point-of-contact (SPOC) for
clients looking at procurement, provisioning & support of
ICT. The complexity of ICT moves to the background and at
the same time the business is moving to short-term pay-per-
use contracts. Services of Qtel but also 3rd party services can
be bought and will be delivered with one mouse click over its
cloud application platform. The QTEL Corporate Market is
shifting its focus from IT services to business service
aggregation. In this new role, we focus on all critical business
discussions relating to cloud and delivery “as-a-service”.
How Qtel can be well positioned to deliver optimal cloud
services to enterprises?
Qtel NLOB believes that the telecommunication industry at
large is well suited and perfectly positioned to lead this
change. Cutting through all the details, at the end of the day,
Cloud Computing is nothing but a new way of delivering
applications to its consumers and Telcos are the ones who own
the “last mile” to the consumer. Consumers are connected
through the network owned and managed by Telcos and any
new information delivery model has to leverage this existing
network infrastructure in order to be successful. Because of
our dual enterprise IT service and telecommunications
heritage we are well-positioned to enable organizations to
bridge existing legacy/IT with new, cloud-based technologies.
Next to leveraging infrastructure, Telcos are well positioned
from a business model perspective because of their experience
with complex pay-per-use provisioning, billing and marketing.
Enterprises are moving into the cloud world but through baby
steps. Instead of moving all applications from in-house to
cloud all at once, enterprises are choosing point applications
one at a time. For example, they start with Infrastructure as a
service first where the focus is to buy Virtual Machines hosted
in 3rd party data centers to meet their elastic storage needs as
and when needed. Next they may buy external cloud software
(SaaS) for less critical business processes and slowly evolve to
a stage where they start pushing their mission critical
applications and data on the cloud. Qtel NLOB believe that
the enterprise market will need a central Cloud Broker
platform that will serve as the single point provisioning engine
for all cloud based services cutting across IaaS, SaaS and
PaaS.
Establishing ourself as a cloud broker is asking for a solid and
open architecture which at the same time respects security and
compliance demands.
ACKNOWLEDGMENT
The information contains comments / excerpts / notes
from the conference Telco Cloud Partnering Strategies,
organized by Questex Asia and TelecomAsia.
REFERENCES
Cloud Partnering Strategies Summit speakers, panelist,
guest speakers from: Reliance, Chungwa Telecom, Globe
Telecom, Indosat, Telstra Global, Korea Telecom, Asia Cloud
Forum, NEC, Brocade, Hong Kong Broadband Networks,
Analysis Mason, Frost & Sullivan, Singapore Cloud Forum.
[1] Ericsson Thinking Ahead Blog: Redefining the Cloud: Mobile
and Connected
http://www.ericsson.com/cn/thinkingahead/themes
[2] IHS, Wireless Service Providers Look to the Cloud to Regain
Profits Press Release, October 2011
http://press.ihs.com/press-release/design-supply-
chain/wireless-service-providers-look-cloudregain-profits
[3] Telco 2.0, ‘Cloud 2.0: don’t blow it, telcos…’ Executive
Briefing, September 2011
http://www.telco2research.com/articles/AN_cloud-2-dont-
blow-it-telcos_Summary
[4] U.S. Government ‘Federal Cloud Computing Strategy’,
February 2011 http://www.cio.gov/documents/Federal-
Cloud-Computing-Strategy.pdf
For further information please contact:
Muhammad Mudassar
Head Presales & Solutions Architecture
ICTE & Mega Projects, New Line of Business
T +974 4400 1481: M +974 6699 2099
mmudassar@qtel.com.qa

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