Industry Thought Leadership

Four-pronged Mantra for Transforming Service Providers

August, 2018
Ali Amer
Managing Director, Global Service Provider Sales Cisco Middle East and Africa

Cisco

Global and regional service providers have a challenge coming up, and it is not a small one. Collectively, as a group, they will need to be able to manage more than 10 billion mobile-ready devices. This means cleaning up the house to get nimbler, more secure, be able to scale up and out faster, provide new revenue generating services faster, and overall be more efficient than today’s yardstick.

Business customers are demanding more and more sophisticated services to be bundled in the same package. The underlying note to watch out for is to have the right technology platforms onboarded. Today’s cloud-based security, networking, and analytics platforms, once onboarded are set up to provide just those types of services that businesses are asking for. Business expect to get ready-to-use platforms for their WAN, VPN, security, mobile, and IoT application requirements.

Increasingly for most businesses, service providers are now a one-stop shop to get all their technology solutions and services delivered from. On-demand, pay-as-you-use, easy to setup, managed in the cloud, are now basic ingredients of their expectations from service providers.

On the opportunity side, such enabling technology platforms are attracting enterprises to self-disrupt and adopt digital transformation technologies. Early adopters are triggering disruption in almost every market and industry including governments, banking, hospitality, healthcare, retail, logistics, trading, and others. This is an opportunity for service providers to meet their expectations for value added services built around corporate connectivity.

Service providers can see it happening as the demand for their connectivity services keep soaring, but are also on the wrong foot to provide the larger basket of offerings. Business customers are often looking at top of the line value-added services including streaming video, seamless application integration, plug and play connectivity for any device onboarded, high speed network responses at any location and at any time, fool proof security, amongst others.

Service providers are well positioned to be an enabling partner for businesses in their digital transformation journeys. But in most cases in order to meet the expectations of their customers and to be profitable and efficient, they also need to have adopted the right technology platforms for themselves.

Service providers need to be beef up their capabilities in multiple areas. They need to be able to go to market much faster than their current average of 18 months. This is much too long to keep pace with the changes triggered by digital transformation. They need to be able to build, deploy, adapt, and takedown offerings based on success and failures in the market on a much faster, but smaller scale.

The rate of technology obsolescence is much lower inside service providers than within their business customers. While businesses refresh their technology platforms every three to five years, service providers have a much longer write-off cycle. This has multiple implications.

For one, their applications and data repositories will remain more siloed, than what is optimally available from the latest technology cycles. This reduces the ability of service providers to leverage the large repositories of customer generated data analytics, and impairs cross-selling and upselling revenue leverages. The entire technology framework inside a service provider may also be inflexible and obsolete leading to diminishing returns on investment. This has a direct impact on profitability.

Market estimates put - keeping the lights on - cost at $7 for every $1 spent by service providers on technology asset purchases. The forward solution for service providers - to aggressively automate and adopt the latest technology solutions.

Service providers also need to build the right eco system of technology and solution enabling partners. This will ensure that they are continuously exposed to the most innovative opportunities available, and are aggressively building and testing proofs of concepts to adopt and move forward upon. Hyperscale and hyperconverged data centers and compute server technologies can allow service providers to scale based on their requirements without encountering performance limitations at any time.

For service providers, security is not a value-added service in the typical sense but it is a key underlying requirement built into performance, delivery, reliability, integrity and long-term financial sustainability of the service provider. No amount of investment can be said to be sufficient in this area and service providers need to diligently spend their budgets selectively and in the most optimal areas in order to build the best protection envelope. This needs to include the service provider as an organization, its customers, its partners and suppliers as well.

As an offshoot, the sheer capability developed by the service provider to meet its own internal security expectations, can be used to build an external facing, commercial security service. This can at times help the service provider to get a return on its internal cost center investments from an externally facing, commercially viable, sustainable and competitive service.

For service providers, to revamp and build their capabilities is not an uphill task. However, it does require a pragmatic understanding and realization of its technology strengths and weaknesses. Reducing the dependence on hardware, by adopting network virtualization is one of the most powerful steps in its internal transformation.

Orchestrating the many elements built into the software layers, by intelligently automating and optimizing, rather than relying on human intervention, is another step forward. Advanced analytics and monitoring can help generate revenue and improve customer experience at a much faster rate.

Reducing network complexity and simplifying architectures using software defined everything and cloud platforms, helps in the delivery of rich value-added services, at a vastly reduced setup and operating cost. Also, real-time and near-real-time analytics and reprogramming ensures that applications, policy and services are well tuned to the demands from business customers.

By focusing on four buzzwords - speed, efficiency, growth and security, service providers can ensure they are successfully building their viability for the next phase of business innovation and expansion.

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