Why won’t enterprise choose telco operators for Cloud services?

At the recent Cloud Net Summit in London, there was considerable discussion regarding the role carriers and telecoms service providers can play in the provision of cloud services. One of the most noteworthy observations came from research by Current Analysis, which suggested that only 6% of businesses choose carriers as their “go-to” source for cloud services.

A number of reasons were advanced for this perhaps surprising conclusion, including the suggestion that carriers are perceived as having more voice expertise than data. It’s certainly true that most carriers come from a strong legacy business in voice, but it’s equally true that very few are solely dependent on voice today.

Perhaps more pertinent was another reason proposed – that carriers simply do not have the consulting resources to develop solutions for businesses. We know from previous conferences and research that some carriers have invested heavily in this area, but the findings suggest there is still some way to go.

Carriers have a unique set of resources and attributes that can enable them to deliver cloud services – or to carve out a role as a enabler to other service providers – but they clearly need to articulate their proposition more effectively.

Businesses want solutions that fit their needs. These can be complex and may involve multiple solutions. There isn’t a one-size fits all approach that can be usefully adopted. What carriers need to do is to ensure that they focus on two things:

  1. A portfolio of tangible, flexible services that can be clearly understood by enterprises of all sizes; and
  2. A clear proposition of the value that they can play in this role, both for end-user customers and other service provider partners.

Without a clear understanding of what’s on offer – and one that matches their needs, expectations and experience, enterprise users will continue to look elsewhere. Similarly, unless all stakeholders appreciate the value that carriers can offer, their role may be merely to support access to cloud services from other providers without capturing any appreciable share of the value.

As we have been proposing for some time, carriers have a clear ability to deliver a number of unique capabilities to support cloud services, such as end-to-end QoS, reliability, security and privacy. While many are aware of these capabilities, carriers clearly need to do more to build awareness among end-users and other service providers about their ability to offer something different – and better.

But while that’s necessary, it’s not sufficient to change enterprise perceptions. Carriers need to not only clarify their propositions, but to develop the resources to deliver them via consultancy teams who can work with customers to ensure that what’s on offer is understood and that it meets the evolving needs of all. If they don’t, regardless of the value that they can offer, they will be out-competed by more nimble players with the appropriate customer focus and orientation.

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12 Apr 2012, 3:24 p.m.

Matt, Interesting statistics. Would be interesting to see a the differences in carrier cloud service offerings for end-to-end QoS, reliability, security and privacy.

Could it also be possible that people are concerned about having "all their eggs in one basket"? Not that this is actually an issue because of the close consideration carrier engineering teams have given to redundancy and resiliency.

Think I'm going to poke around and see what they are saying in their marketing material. Possibly as you mentioned, they may need to assess their message.

Best regards,

Matt Dwyer