Enterprise play
The fear of becoming a "dumb pipe" has already driven many cellcos to think of ways to leverage their network assets as a differentiator. Ryudi Yamada, president and CEO of NTT DoCoMo, cites it as a key element of the company's business transformation strategy.
"The most important aspect of business transformation is to provide unique and competitive services, to include offering value added functions that can only be offered by operators, such as authentication and billing," he said at MAC. "Carriers can offer unique value to customers and avoid the risk of becoming a dumb pipe."
More to the point, cellcos have an opportunity to target enterprise customers with that unique value-add, says Sharat Sinha, managing director for the managed and cloud services division at Cisco Systems, in part because much of the opportunity in the consumer segment has already been commandeered by the mobile OS vendors and other OTT content providers.
"In the consumer segment, most of the major OTT players have already taken control - Apple and Google and the likes of them -because of the end device and the application in the cloud connection," Sinha told Wireless Asia. "Telcos can make use of their network characteristics for specific apps around electronic banking, for example, but that is limited in scope, because all the major OTT players have taken up a significant part of the value chain."
As such, he says, there is a significant opportunity for cellcos to target enterprises, particularly SMBs, with apps and services that leverage their ability to create a hosted and secured cloud environment, from software-as-a-service to platform-as-a-service and even infrastructure-as-a-service.
"When you look at hosting and collaboration services on top of a data center, telcos control about 80% of that value chain," he says.
Targeting enterprises also makes sense because they tend to look for the kinds of security guarantees and SLAs that operators can offer, Sinha adds. "On the consumer side, if the link breaks a couple of times or there's a little delay there's not much of an impact. But for enterprises, they want security and some level of privacy for content, and telcos are in a position to provide that, as well as things like bandwidth control and scalability. Telcos can do that better than OTT players."
Ironically, this advantage also enables operators to partner with OTT content/service providers who need that kind of secure value-add, Sinha notes.
"Companies like SAP and Oracle have been coming out with on-demand services, and when they do they typically tie up with telcos to deliver those services, whether it's purely white-labeled or joint-branded," he says. "Apps are usually either mission-critical or handle the core functions of that SMB, therefore there's a level of SLA that needs to be provided that's closely tied to bandwidth and network availability."