APAC telcos should exploit cloud computing opportunity, says Ovum

by CXOtoday Staff    Aug 16, 2010

With a growing share of MNCs’ investment dominated by neither the US nor the European group of telcos, The Asia-Pacific region is likely to become the most competitive and dynamic place for global services in the near future, says research firm Ovum.

Regional players are also lifting their game and alternating their position between fierce competitors or partners of choice for global telcos building their regional offerings and trying to unlock the market for themselves and their MNC customers,” comments Claudio Castelli, Ovum senior analyst.

Telcos aim to increase their service scope in order to avoid the risk of being commoditized as merely providers of global pipes. Most are increasing their offerings in managed and professional services, and some are also developing IT capabilities. However this means entering the low margin IT services game.

Cloud computing may offer the new opportunities that they have been waiting for. Telcos can take advantage of their global scale networks, which provide capabilities to offer quality of service guarantees and end-to-end SLAs. However to provide real time and critical business applications in a cloud computing approach for MNCs operating in Asia-Pacific, telcos will need to invest in regional facilities and services.

Besides customer portals and online tools, telcos are also recognizing the importance of professional services, especially at the early stages of CaaS deployments, to support MNCs with their virtualization transformation and adoption of cloud computing services. MNCs are not going for “pure cloud” approaches initially but are starting with hybrid solutions (integrating cloud-based and on-premise applications), which are project-based and require more integration and consulting services.

“Regional professional services capabilities or partnerships with local companies will be essential. This seems to be acknowledged by most global telcos, who have developed professional services teams in the region.” said Castelli

There are also good prospects for long-term differentiation in areas such as customer support, network integration, consulting, and outsourcing services that build longer-term and more strategic relationships with MNC customers based on ‘inside knowledge of customer requirements. Local and regional presence, support and operations center are extremely important. “Most telcos see long-term opportunities in ICT outsourcing. The stability of a 3 to 5 year outsourcing contracts is preferred to that of a 2 year telecommunications contract,” said Castelli.