Ovum analyst Mark Giles wrote on the company’s StraightTalk opinion blog that telcos will face “considerable challenges in moving to a cloud-based delivery model” because, along with lacking “credibility in the supply of IT services” they haven’t focused on “adapting their existing OSS/BSS to fit a cloud delivery model.” Giles specifically cites that “some telcos” have “saved integration with their billing systems…for after launch” of their cloud offerings.
This is a sweeping generalization about the global telco community that smacks of hyperbole and is difficult to accept as fact. It’s hard to refute the point that most telco OSS/BSS infrastructure was built to suit a “build to order” service delivery model, as has been the norm in enterprise markets for many years. But suggesting that telcos aren’t ready for any kind of on-demand service delivery model overlooks the investments that have been made in technologies like real-time charging and policy-based service delivery infrastructure. These OSS/BSS capabilities enable, for example, real-time content downloads, on-demand video programming, and the kind of sophisticated online self-care and provisioning tools large enterprise customers utilize.
Certainly, there’s a significant effort required to bring these OSS/BSS technologies to bear for the purpose of delivering infrastructure-as-a-service, platform-as-a-service, and software-as-a-service models. But major players in the industry have demonstrated a willingness to invest in this evolution, such as the $800 million Telstra committed to cloud computing in June, or the $1.4 billion Verizon invested in January to acquire infrastructure-as-a-service provider Terremark (CP: Verizon bolsters everything-as-a-service cloud strategy with Terremark acquisition).
Certainly these companies face challenges in winning in the cloud market, as does any competitor in what is among the most contested of markets, sitting at the crossroads of IT and communications. But the proverbial dog that won’t hunt is the inference that the entire industry will struggle to overcome these challenges. Not all research houses appear to agree with Ovum’s position as, just this past January, Gartner rated Verizon and AT&T as leaders in cloud services, specifically in infrastructure-as-a-service and web hosting. (CP: Surprise: AT&T,Verizon leaders in Gartner cloud rankings)
For at least a decade and half there have been many voices within the OSS/BSS space that have cried wolf, arguing that an industry-wide lack of OSS/BSS integration and innovation would somehow lead to the industry’s demise. During the same period, OSS/BSS infrastructure has played a critical role in the innumerable new services and business models that industry has delivered with smashing success. The bottom line is that most of the communications industry’s leading service providers have grown and been highly profitable amidst the weak global economy’s struggles. Though these companies may be criticized fairly for missing some large opportunities that over-the-top plays have created, it’s inaccurate to argue that telcos, as a breed, are incapable of adapting to and winning in new markets like cloud services.
How right you are, Alex. True growth in the cloud for telcos will require hyper-intelligent BSS/OSS systems — and analysts in general seem to know full well that smart BSS is right here right now, providing the framework for today\’s revolutionary communications offerings, and fully ready to bring about tomorrow\’s. For a Q&A on telcos and the cloud, see this post from Convergys: http://www.convergys.com/insights/guest/7-questions-and-answers-about-cloud-billing-for-the-telecom-sector/