Telcos, It’s Time to Deliver Hybrid Cloud
“Everyone wants hybrid multi-cloud” – This is what we heard from both the head of open source strategy for Google Cloud Platform and a principal program manager (in the office of the CTO) for Microsoft Azure, at the Linux Foundation’s Open Source Leadership Summit, as the overwhelmingly clear message they’re hearing from their many customers. That is to say, end users want to leverage multiple hyperscale public clouds, and regional edge computing resources, while continuing to leverage their on-prem infrastructure within their IT environments.
There’s a lot of value telecom service providers can provide based on the industry’s direction towards hybrid multi-cloud, such as leveraging their urban assets (data center and central office locations “at the edge”) to incentivize use of their infrastructure for latency-sensitive applications, as well as providing differentiated value on top of clouds through managed services, support and other integrated commercial offerings (including disaster recovery as-a-service, security as-a-service, etc).
For the last several years, CloudOps’ CloudMC product has been enabling service providers across seven countries (including Canada, United States, United Kingdom, Panama, Colombia, Curacao and the Cayman Islands) to deliver and monetize their portfolio of hybrid cloud and network services.
With three years of CloudMC production-use across multiple countries, one of our telecom service provider customers, delivers cloud services to 650 customers, billing an average of $6,500 USD per month (per customer), resulting in a delivering cloud business that monetizes over $50,000,000 of annual revenue, while continuing to grow and provide differentiated value to their target markets.
So, why is it time for CloudMC to come out of stealth mode and get into the hands of service providers that are keen to deploy, deliver and monetize hybrid cloud and network services? Let’s look at the trends.
Service providers need time to market and margin sustainability
As a service provider, keeping costs low while maintaining high quality is essential to sustainable margins. At the same time being able to deliver new innovative products to market in a timely cost-effective manner is critical to long-term relevance. In this sense, the business model ‘IT-as-a-Service’ differs radically from traditional cost-centric, ‘keep-the-lights on’-focused IT services.
Traditional vendor solutions are designed to sell to capex budget-rich enterprises for largely single tenant silos, without regard for secure multi-tenancy, multi-level reseller enablement or the need for continuous delivery of capabilities and capacity.
Own your destiny (avoid lock-in)
Fully automated cloud solutions are the key to delivering cost effective products to enterprise customers as-a-service. The use of standardized, open source automation allows flexibility to choose best in class components while avoiding lock-in and ensuring vendor competition to lower costs.
Margins matter, so it’s time to make vendors compete with one another by leveraging open source frameworks. This requires building up the service provider’s internal expertise or the vendors will own the lion’s share of the margin.
After a period of rapid globalization, regions are retrenching. This is good news for regional telecom providers who can leverage their enviable market positions, plus network and data center assets to deliver edge computing to regional enterprises and governments, while providing data sovereignty. Data is the new gold, and service providers have the “beachfront property” assets and market position necessary to create “gravity” to attract the data for services to follow.
This can be the opportunity to win or lose. Depending on an organization’s ability to bring the right products to market, avoiding the network-as-commodity trap by combining it with other resources can lead to high value and high margin solutions.
Converged providers who combine their network data center and software defined services are becoming the platform for a huge shift in modern IT from on-premises DIY to ‘as-a-service’ consumption. This delivery model requires a new, more flexible and customer-centric generation of BSS/OSS tools. Not only is the user experience and branding important, but the market wants choice over whether a product is consumed on a self-service basis or fully managed. This requires new solutions that integrate well with all the underlying and disparate products and services in the portfolio.
CloudOps’ CloudMC and MasterPortal are examples of this new required tooling, that sit on top of largely open source middleware into which vendor components can be “plugged” and therefore controlled and commoditized via automation.
Telco Digital Transformation
Traditional telecom services will benefit from software defined networking (SDN) and automated approaches (i.e. Ansible, Terraform) in the delivery of next generation networks. The rise of OTT means that incumbents are scrambling to deliver more flexible products faster than ever. Again, open source automation is coming to the rescue, allowing for SDN and NFV solutions that work with traditional vendor products and allow them to be delivered faster and operated more efficiently at more competitive costs.
In the shift from incumbent telecom providers to regional IT-as-a-service platform, the more mature businesses have an opportunity to leverage and integrate with next generation services allowing end-to-end product integration.
New business model requires new operations model
The key to success in shifting to a higher value and higher margin business model is a change in operations model, requiring a dedication to integrating teams across traditional telecom silos and ‘automating all the things’ such that processes do not get blocked by dependencies on people and manual work. Shifting from a “rental income” business model to customer-centric product delivery is essential to remaining relevant as businesses continue to undergo ‘the big shift’ from building their own on-premises IT to consuming IT-as-a-service.
Many of our service provider customers have experienced the need for DevOps transformation – a shift in how projects are planned and delivered, and how customers implementations, operations and support are practiced. Shifting the culture of work is the hardest part of this transformation, compared with implementing the required technologies and processes. Our colleague, Jessie Hurkens, wrote a great blog on how companies can drive feature velocity through cultural change.
If you’re stuck on your path to delivering hybrid cloud and network services, enabling self-service, utility economics and API-automated, continuous delivery of IT – we’re available to chat and you can click here to learn more about our cloud delivery platform, CloudMC.
Written by Maddison Long, CloudOps’ VP of Product with notable contributions from Ian Rae, CloudOps’ CEO