Telcos Face Uphill Challenge With Cloud Services- Telstra Accept With $800mill

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Even with their advantageous marketing and infrastructure positioning, a new Ovum report reveals that telecommunication companies are facing an up-hill battle when it comes to offering and supporting competitive cloud services.

The report was conducted by independent telecom analyst Mark Giles and recognises the potential cloud technology has, but also claims the obstacles current telecommunication companies face will be ‘significant.’

“Much has been made of the potential for telcos to leverage existing assets, such as their communications networks, data centres, OSS and BSS systems and existing customer relationships, to offer cloud services to enterprises,” he said. 

“However, while telcos’ assets do provide them with some key advantages over other cloud providers, there are a number of significant challenges that they face.”

“Aside from a perceived lack of brand identity in the supply of IT services, obstacles such as bringing internal network and IT teams together, enabling sales teams, and ensuring that OSS and BSS systems can deliver on cloud’s on-demand nature must be overcome.”

The rate of innovation for cloud services is different to traditional networks, proving a greater challenge for their back office team. There’s also matter of pricing and monitoring the service’s profitability. 

Giles believes that telco’s should follow the examples set by key industry players, such as Telstra and SFR, by considering a joint branding, marketing and sales partnership with existing IT services.

“In addition to helping them overcome their internal operational challenges, a partnership can help telcos to expand their number of sales channels and profit from an association with a premium IT services brand.”

Recently Telstra announced an $800 investment in cloud computing, with chief executive David Thodey believing it will transform the carrier from “an access infrastructure provider”, to a network harnessing enormous computing capabilities. 
 


This investment is believed to be in addition to the operations start-up cost, estimated at an additional $200 million.

“It’s been more and more important the role we play because of what we are,” Mr Thodey said. “It’s part of our DNA.”

On investing $800 million into cloud computing, Telstra enterprise and government managing director Paul Geason, recognised customers will determine the rate of growth. 

“What we’ve tried to do with that number is be as approximate as we can about what we think demand will look like over the next five years but quite clearly that’s in the hands of our customers how they embrace cloud,” he said. 
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