Cloud Offers Business-Smart Operators a New Lease of Life
As business customers turn away from buying IT equipment and infrastructure and instead increasingly opt for cloud-based solutions, network operators face both a challenge and a potentially lucrative opportunity.
However, speaking at the 2017 Ultra BroadBand Forum (UBBF) in Hangzhou, China, Huawei's Rotating CEO Eric Xu said that if operators wanted to unlock that opportunity, they would need to significantly up their leased-line game in order to see off a challenge from cloud service providers looking to add communications to their portfolio of services.
To illustrate the point, Xu revealed that Huawei had undertaken research among its enterprise and government customers to identify the pain points that customers face when buying leased line services from traditional carriers. He said the research clearly showed that customers were not happy with the speed of response from the carrier community; that they found the pricing model was too often fixed and rigid; and that they were frustrated with the time taken to deliver a service -- sometimes stretching to as long as 27 weeks.
"The buying experience does not compare to a typical e-commerce model," he said. "Getting a leased line from a carrier can suffer from a lack of real-time status information throughout the process -- from ordering, to delivery, to performance."
The survey revealed that business-smart operators would need to align their leased-line services with the three major requirements identified by the enterprise and government customers:
- First -- providing agile, on-demand services within flexible pricing structures.
Second -- create online self-provisioning tools so that customers could increase bandwidth on-demand for peak periods of activity.
Third -- provide Service Level Agreements (SLAs) that customers can easily and remotely check and monitor, with visual clues on real-time service performance.
In front of more than 800 experts and executives from the telecoms carriers, business and government, regulators, standards bodies and industry organisations attending the UBBF, Xu pledged that Huawei would help operators transform and re-position their leased line services to meet these new demands. He said the carriers’ leased line business had been taken for granted for too long and made it clear that Huawei saw the change required as a business imperative for the operator community.
"The enterprise shift from IT equipment to cloud-based services is an unstoppable trend," he said. "It is a trend that demands operators deliver a 'carrier WAN' and that low-latency Fiber to the Enterprise (FTTE) is a must-have service if they are to meet an expected tenfold growth in the bandwidth required."
Of course, the leased line service market has long been regarded as the operator's stronghold, but Xu warned that it is now facing a significant threat. He said that only by revolutionising their service packages will the operators be able to not only protect the market they have, but also grow their business significantly by meeting the new and expanding requirements created by the cloud business environment.
"The challenge," explained Xu, "is that the aggressive cloud service providers recognise this as well. They are not only building more data centers, they are building them closer to the customers, and beginning to develop cross-country and cross-region communications links that they can bundle into the service package. This is a threat to the carriers' core business and they need to respond now," he said.
According to Xu, the repositioning cuts across many aspects of a carrier's business. It encompasses business strategy, product portfolio management, network planning and deployment, and the customer experience management tools that carriers provide.
Xu said that Huawei's pledge to support the operator community and help them address this evolving market need covers five key initiatives to transform carrier leased-line solutions.
1. Provide a cloud-based solution to enable carriers to meet the increased demand
2. Help carriers develop integrated solutions combining leased lines and cloud services
3. Enable carriers to 'cloudify' their own networks to offer agile, on-demand, leased line services that can flex with customer needs
4. Expand the range of B2B connectivity services customers can offer to an enterprise campus on the back of leased-line services
5. Revolutionise the customer experience through online discovery, purchase support and service provisioning tools.
"The challenge facing the operator community is of course two-fold," said Xu. "Not only must they fight off the challenge from new cloud service provider competitors; they must also rise to the challenge of revolutionising their current service offer to better match with their customer requirements.
“However, the carriers able to tackle those challenges, who upgrade their existing services, and introduce agile, new leased line solutions in tune with today’s marketplace, will be in pole position to capture new opportunities and secure vital leased-line business for the future. And Huawei is committed to helping them on that journey," he concluded.
This blog is sponsored by Huawei.