The telecommunications industry remains in the throes of a significant digital transformation.
Connectivity remains the bedrock, powering all things digital and enabling operators to expand and diversify their services. But operators understand the requirement to move beyond basic connectivity. They have lost ground to nascent internet businesses that have brought dynamic products to market, underpinned by fantastic customer experience, with greater speed and agility. Then there are the billions that have been invested in 5G infrastructure, producing massive pressure to begin monetizing sooner than later.
On the path to digitization, CSPs find themselves confronted by several hurdles. Some stem from the inherent culture and nature of the business. After all, these are businesses that have been around forever with employees who have an embedded way of thinking and resistance to change.
Then there are the operational hurdles. Most, if not all, CSPs have on-premise systems for billing and managing subscriber accounts that are expensive and inflexible. Significant costs and resources have been sunk into these systems over the years, and they are deeply woven into the fabric of the organizations. They are admittedly critical for continuing to support existing lines of business, so likely to continue serving as the primary source of revenue as the newer digital business comes online.
While these behemoths may still be doing the job for which they were commissioned, operators are quickly realizing they are not capable of supporting the evolving digital business and a new world where they are hosting products created and owned by partners, co-curated with disparate business units, or enterprise customers themselves.
CIOs and CTOs are aware of the need to modernize and adopt cloud-native and flexible IT solutions. But they are left with questions and faced with trust issues as they move away from the old guard whose business models are based on selling as many services as possible to the operator. Deeply existential questions are being asked:
- Should the existing system be replaced entirely with something new and modern?
- Can I (or should I) get a separate billing platform to handle only the new product lines we intend to launch and support?
- Should we continue to pursue an on-premise approach, or look to the cloud?
- If I look at the cloud, am I limited to only Private Cloud platforms or are there viable Public Cloud solutions out there?
- My current on-premise vendor says they are “moving to the cloud”. What does that mean and can I believe them?
We humbly offer our perspective on the questions above and advise CSPs to take caution.
You see, providers of older-school telco billing systems have proudly proclaimed their move to the cloud to appear modernized and capable of servicing CSPs in this new era when everyone wants to be in the cloud – or thinks they should be. But not all cloud solutions are the same. Not even close.
CSPs engaging in digital transformation projects need to understand the distinction between these offerings and true cloud-native SaaS platforms. From every conceivable perspective – culturally, operationally, commercially, architecturally, etc. – everything about how a SaaS public-cloud system is designed is different from legacy systems. The advantages are numerous:
- They were designed to serve multiple customers at once, so all customers get access to new features and product upgrades at the same time, eliminating both custom code (moves to no-code configuration instead) and the expensive and slow change request culture in telco that impairs speed to market.
- They can be configured by business users, eschewing the need to retain and pay expensive IT and system analysis teams.
- They offer a lower total cost of ownership than on-premises or the cloud solutions legacy providers are marketing, in some estimates by as much as 80%.
- They are designed to be open and API driven from the start so you are free to integrate new cost-efficient and best-of-breed cloud technologies, from AI engines to customer engagement bots, to enhance the way you serve your business and market.
- They make the best available use of all global cloud services, freeing the service provider from a potentially expensive long-term commitment to one cloud provider or the other.
- They offer backward compatibility, ensuring that older features and applications continue to operate as they should amid platform upgrades.
- All incremental fees typically assessed for enhancements, infrastructure, and system administration are baked into the total price, eliminating costs related to infrastructure management, security, scalability, and performance.
The cautionary note for CSP decision-makers is this: Not everything that says cloud is cloud. Simply moving software that was once deployed onsite into a cloud environment won’t deliver the full range of benefits, flexibility, security, and scalability operators need as they evolve to become a modern, digital enterprise.
