Productivity at Your Fingertips

12/02/13 – “The Battle for Subsribers” – Eldad Barak, Tadiran Telecom’s President & CEO writes about the effect of the Cloud on Telcos, Vendors and Integrators

The Battle for Subscribers

Published by Eldad Barak, President and CEO of Tadiran Telecom, originally published on connect-world.com.

Article abstract

The cloud is changing ‘business as usual’ for telcos, SaaS companies and vendors. The SaaS companies have reduced their client’s capital and operating expenditures, telcos lost business customers and solutions vendors have had to reinvent their offerings for the cloud. Vendors, for example, have developed pure software-based unified communication and collaboration platforms that let customers migrate to the cloud at their own pace and style. Telcos are starting to offer their own SaaS packages, bundled with communications, security and applications-on-demand.

Full Article

The cloud has created a radical shift in how communication is architected, delivered and purchased. The software is hosted at a data centre and is accessed using the Internet or a private IP network. For large enterprises, as well as SMB, this has meant a drastic reduction in infrastructure requirements and administration overhead, as well as generally mitigating traditional IT challenges such as scale, performance, uptime, disaster recovery and maintenance.

Telcos began to lose subscribers. Many interpreted this as the end of telcos' reign and the beginning of a new era, where SaaS companies predominantly rule the business subscriber market. But they will soon realise the battle is not yet lost but has just begun.

Because the Cloud is based on a monthly or usage-sensitive model that typically includes support, configuration, hosting and maintenance, something Telcos are very familiar with, SaaS is whetting the appetite of Telco giants.

Telcos have lost a lot of business subscribers to on-premise solutions and have identified an opportunity to win those back by providing SaaS solutions.

By definition, the SaaS business model requires network connectivity and data centres. Having both of these, telcos are already endowed with valuable strategic assets that are the very foundation of any SaaS architecture.

Bundling new SaaS applications with their communications offering, augmenting them with professional security and QoS, and utilising their unrivalled expertise in billing, telcos can offer their customers every conceivable application ever written, ready to use on demand.

Many telcos have already detailed their approach to providing Unified Communications and Collaboration as a Service (UCCaaS). Their offering is delivered over a private IP network and private, hosted and managed cloud services data centres. We believe that this approach delivers more security in comparison with public cloud applications. To meet the needs of the largest enterprises, these telcos aim to provide their customers an access solution that delivers high uptime, fault tolerant reliability, and scalability.

In the Middle East, IP Centrex or similar cloud services are offered by several big providers but are aimed almost exclusively at small and medium size businesses.

Telcos have already commenced their conquest of the UCaaS arena. This is a strategic inflection point; telcos have direct access to the potential customers. They have been familiar with their customers’ consumption patterns for many years, and they need the data traffic as it is part of their core business. The Centrex could not do this for them – it was expensive and lacked the necessary features – but now they are back in the game.

Unlike in the USA, where cloud implementation was adopted as a federal policy, in the Middle East, as in most regions of the world, change started from the bottom up.

In Israel, for example, telcos have heard the call of the market and are providing basic cloud services, such as hosting and routing, to their subscriber base. As for communications, telcos are still sitting on the fence as the demand is coming primarily by SMBs. Smaller SPs have been quicker to offer their SMBs end-users a range of cloud services which minimize TCO by migrating SMB's communication systems and workload to the cloud.

The change will really take place however, when big enterprises join in. These big organizations can afford private clouds and have complex requirements which telcos are still challenged to provide on the public cloud.

As telcos strengthen their technological offering and enable businesses to fulfil increasingly complex demands on virtual servers, big enterprises will see the added value of migrating their communications to the cloud.

Telco's are looking for telecom vendors to provide them with the technology that will enable them to rise to the challenge. This ready-for-the-cloud technology will be software based, scalable and will feature all the applications a big enterprise requires. In this huge whirlwind, UC&C technology vendors are caught in the eye of the storm. We have realized that we have to give our customers full flexibility, and the choice to adapt to change at their own pace – and still keep our technological vision consistent with cloud architecture.

Some of the solutions vendors provide at present are tailored applications, which the cloud is a long way from being able to supply. For example, mission-critical applications for railways and subways, such as our deployments in Indian Rail, British Rail and in many enterprises in China, or medical and healthcare applications which require high fault tolerance, redundancy and business continuity.

Vendors must embrace the change, as we have. In recent years, we took out the drawing board and created a new pure software Unified Communication and Collaboration platform. The technology we developed is designed for cloud applications. It enables us to leverage the power of a new wave of innovative applications and allows customers to evolve with their market, while enabling them to utilise the most advanced dedicated technologies available.

With cloud compatibility new pure software solutions may allow customers to migrate applications to the cloud at their own pace, and according to whatever works for them.

Now, as Telcos search for the technology that will allow them to prosper in the new, brave and 'cloudy' world, they have to embrace change full heartedly. They have to hear the call of businesses for a single robust but flexible platform that will deliver the features most relevant to them in their vertical markets, whether on or off the cloud, while reducing operating expenses. For this, telcos need an architecture built with the cloud in mind, to provide a dependable enterprise communications solution that's easy to scale and intuitive to manage.

This will enable telcos to bundle new advanced services and up sell to their subscriber base, while opening new markets that are developing and are in need of advanced communications services without the capital expense in infrastructure.
It is also important that the communication services offered by Telcos integrate seamlessly with legacy telephony infrastructure, because although companies will undoubtedly shift more and more applications to the cloud, the progress will be gradual and in some industries on-premise solutions might remain a necessity for a considerable time.

We are speaking of a future in which organisations can get UC&C tailored to their size and their needs. A world where new niche applications are innovated constantly, are immediately made available to industries around the world, and can be integrated with simplicity.
In this new world, unified communications must be so intuitive that it disappears into the fabric of corporate life. Clients demand it and they are looking to us, telcos, vendors and integrators to work in collaboration, solve problems and develop the solutions that will bring this reality to fruition.

Those who embrace change, who collaborate and commit their resources to achieving the technological vision that customers demand, will be the true victors of the battle over subscribers.

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