Three telecom strategies emerge
Telecom players have three basic strategies that can be used to differentiate their own X as a Service offerings:
Couple these offerings more tightly to the network in order to improve Quality of Service (QoS) and availability and utilize their information about customers to maximize service benefits.
Exploit their credibility, which is their potential to provide superior operations and customer support that facilitate the use of their services, and ensure that users remain satisfied with performance.
Exploit their superior economy of scale and relatively low return on investment (ROI) expectations to be a price leader in the market.
1. Differentiating by service qualityIn this case, service quality means low delay or packet loss rates and stability of jitter. This is difficult in the consumer market because of the growing interest in net neutrality. In the enterprise space, however, business network services have always been available at a higher price for higher QoS. For example, operators can bundle cloud computing and Everything as a Service offerings with VPN services. But since VPN services are also available directly, a competitor could presumably either buy the service and bundle in its own X as a Service offering or integrate its offering into a customer-purchased VPN.
Integrating information about the customer (from an HSS database, for example) and exploiting knowledge of network conditions and trends can create a more durable differentiator. In fact, many operators are already looking to create service assets of this type through the general process of creating a new service-layer architecture for their networks.
Operators see the service layer as a cloud computing platform on which they can host content, features and applications. The fact that Amazon has now offered its Elastic Computing Cloud (EC2) as a media/CDN platform is proof that cloud computing can be the basis for nearly any future service. By taking a leading role in treating services above the network layer as services of the cloud, network operators can grab an early lead in emerging services.
2. Selling credibility
The credibility of network operators as partners in enhanced services and as reliable sources of technology support may be one of the most important yet overlooked assets that operators have in the Everything as a Service space. The overall trends in the industry toward managed services and outsourcing network operations clearly show that both enterprises and consumers need help with complex technology and are willing to pay to obtain it. They're especially willing to pay trusted partners from past relationships, and phone service is still the gold standard of service availability.
The fact that network operators need to reduce their own operations costs, or at least contain their growth, means that operators are making their support processes even more efficient. As these efficiencies develop, they present what may be the most credible and profitable of all "as a service" opportunities -- "Service as a Service." Over-the-top players, which usually lack any significant support staff, cannot compete here without incurring enormous new costs, while telcos already have significant economies of scale to exploit. By making service and support their differentiator, they take the market to a place where few competitors could ever hope to go.