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Carriers Chasing Clouds on Day 2 of MWC 2012

by User Not Found | Feb 29, 2012

On day 2 of Mobile World Congress 2012, the CEO of Deutsche Telekom Rene Oberrmann spoke openly and honestly during a keynote panel about the critical importance of cloud services for carriers. “We don’t want to be dumb pipes,” he said, acknowledging that until recently his company, like other carriers, had focused on the technology needed to protect its existing telecommunications business rather than on focusing on finding innovative ways to better serve customers with new products and services. Cloud services, based on equipment developed collaboratively by carriers and their suppliers that include Cisco, Alcatel-Lucent, IBM, and HP, are seen as offering carriers the opportunities to expand from "dumb" network connectivity to "smart" business services.

But should carriers be chasing the cloud?  That depends on how well positioned carriers are in relation to other players to offer business services from the cloud.  Before business use of mobile devices exploded, carriers had a relatively tough time convincing business customers to choose carriers for business services beyond connectivity.   Carriers did a great job building and operating networks for transporting voice and data traffic. Delivering and charging for usage of network-delivered services were natural for carriers.   

Unlike software vendors or dedicated hosting service providers, however, carriers have tended to lack the experience and skills to deploy, configure, customize, back up, sell, and support business applications such as customer relationship management (CRM) and enterprise content management (ECM), web conferencing and corporate email.  Most enterprise applications such as these evolved over the years from departmental solutions to enterprise-wide solutions to multi-tenant hosting solutions designed for shared server resources across multiple customers.  Carriers had neither the developers nor the corporate IT  staff with direct experience running large instances of these solutions in IT data centers. Beyond business communications, carriers typically didn't have the same understanding of the many other aspects of their customers' businesses as did enterprise software and services firms.

To bridge this gap, carriers have partnered with software vendors such as reselling Microsoft-hosted Office 365 services or have acquired cloud service providers for their credibility and professionally run data centers to offer business cloud services within the carrier’s service portfolio, such as Verizon’s acquisition of CloudSwitch.  These strategies have helped somewhat to improve the chances that business customers would consider carriers when looking for cloud services.  Still, customers tended to look elsewhere.

The explosion of enterprise mobility has added further credibility to carrier cloud services because of the carriers’ deep understanding of mobile devices and their central role in working with mobile handset and operating system vendors to develop, distribute and support smartphones and tablets that address customer needs and preferences (mostly for consumers so far but this can change).  By owning the sales, billing, and support relationship with corporate and individual customers who are increasingly choosing corporate or BYOD mobile devices to access business applications and corporate sites, carriers are in a stronger position to handle the front office function of providing users with voice and data services as well as business application and infrastructure services that are optimized for mobile devices.  Carriers will need to continue to partner, acquire, and hire expertise to ensure smooth operations of back office business applications and infrastructure.

 

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