Rob Smith Rob Smith Director, Product Marketing - MDS

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Monetising cloud/OTT services – agility still the top priority

  • There was a familiar topic at the centre of discussion at the recent Telco Cloud World Forum in London – arguably one that has yet to be fully addressed.

    Alongside the widespread acceptance that the IT and Telecoms industries are rapidly converging – in equal parts a challenge and an opportunity for both – there has been continued discussion on how CSPs must quickly adapt to offer a wider set of services beyond traditional communications.


    The reason for this convergence is relatively straightforward – cloud and over-the-top (OTT) services have seen a phenomenal rise in both business and consumer realms; well beyond that of being just a passing trend. According to research by MobileSquared, carried out last year, by 2016 global smartphone penetration will be 39%, with an estimated 45% of users expected to be actively engaging with OTT services. By the time these figures are a reality, the global OTT market is expected to reach a value of $166.5 billion.

    As revenue streams are squeezed ever-tighter, it’s not hard to see why CSPs are striving to tap into the potential returns.


    The cloud opportunity, with its intrinsic alliance to mobility, is one that CSPs are well suited to exploit but have yet to fully grasp (i.e. monetise). Many at the conference emphasised the need to leverage partnerships in delivering cloud/OTT propositions and, equally, the need for agile, flexible systems to automate the management and billing aspects of those partnerships. Interestingly, the point was made that CSPs can differentiate themselves from OTT players through infrastructure – i.e. CSPs can offer an infrastructure portfolio, which OTT players are unlikely/unable to – is certainly one that should resonate.

    However, to open up these new opportunities, it is clear that CSPs require renewed agility in both their business and operational support systems (B/OSS) and in their organisational processes.


    In terms of B/OSS agility, this shouldn’t equate to costly transformation projects that lock down IT and product innovation for many months. Instead it should be about leveraging adjunct solutions that support complex billing requirements, integrated platforms that use APIs as the intelligent glue to connect complex ecosystems, and making logical investments in outsourcing that bring in the additional expertise and technology required by the CSP to provide compelling cloud and OTT propositions.


    In terms of organisational (process) agility, it is not necessarily that business processes are wrong, simply that they can be slow and hinder innovation – a challenge that was acknowledged more than once at the forum. For CSPs to compete against the OTT players and new market entrants, unencumbered as they are by legacy systems/processes, will require smaller, more agile business units that can act in thought and deed like a start-up business. A good example of OTT agility cited at the conference was that of the customer-driven new product introduction (NPI) process – essentially, gather customer requirements, write the press release, and forward to the NPI team as the product brief along with required launch date.


    So for CSPs, the challenge is to become more agile and cost-effective in the delivery of a much wider range of services. Confronted with a complex and costly legacy ecosystem, the outsourcing of B/OSS that offers standardised interfaces in a modular and interoperable infrastructure would significantly reduce the time and costs associated with launching convergent services.


    To grow revenues and market share in the new world order of the digital economy, it is not so much about survival of the fittest but survival of the fastest. While innovation is vital for CSPs and their vendor partners, innovation without agility could be an opportunity lost.

    Rob Smith
    About Rob Smith Rob Smith works as Director, Product Marketing at MDS
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