Why an intelligent cloud strategy is key to surviving market disruption
Communications service providers face a disruptive market landscape. While data usage and network capacity requirements continue to grow unabated, data monetization and revenue remain significant challenges. Meanwhile, competition is intensifying – and not just from traditional service providers and cable operators. Webscale tech players, led by the FAANGs (Facebook, Amazon, Apple, Netflix and Google) are making enormous gains into areas such as comms and messaging, video streaming, gaming, music and financial services – which most service providers also see as their own growth opportunities.
Yet the biggest market disruptor for traditional service providers stems from rapidly changing customer expectations. Webscale players have elevated digital customer engagement into an art form by placing the customer at the center of their digital-first strategies and tactics. They’re investing massively into creating frictionless digital experiences: where a deep understanding of user needs and preferences meets a tailored, contextualized service experience, on an industrial scale. This is leading consumers to expect their service providers to provide easy-to-use digital tools that empower them to quickly and efficiently achieve their goals. And increasingly, they’re turning their backs on those who fail to live up to those standards.
The secret of the webscale player advantage is cloud strategy and in particular, the use of cloud-native applications. And while for service providers, adopting such systems will provide many advantages to enable them to compete better, the three that matter most are agility, scalability and cost efficiencies. This stands in stark contrast to their traditional on-premise business support systems (BSS), especially large monolithic applications, which are not only expensive to maintain, but whose long upgrade cycles act as brakes to product innovation.
There are, of course, challenges. Service providers need to address internal resistance to change from veteran employees who have built their careers on legacy on-premise systems. Security is also a concern to CTOs, as is application performance. But all of these are eminently addressable, as demonstrated by the thousands of enterprises across other industries who have already accelerated their move to cloud systems.
Ultimately, service providers need to take a strategic approach. Besides just looking at which applications to move to the cloud, and how best to do so, it needs to be accomplished as part of a broader cloud strategy and architecture – including which frameworks to adopt for cloud-native sourcing and skills development. At the end of the day, while moving to realize the benefits of the cloud quickly matters enormously – doing it right matters even more.
Learn more about Amdocs Optima’s cloud-native digital commerce & monetization platform.