What Telecom Service Providers Need to Win the Cloud Services Game

August 31, 2011 at 5:23 pm Leave a comment

by Beth Vanni, Vice President

As vendors look to make significant, long-term inroads in cloud services through the large telecom solution providers, they can’t just sit on the sidelines as spectators in hopes of a win. Their role as coach is paramount in helping the telecom service providers quarterback in a new type of game; a game that has been played and run by a much smaller, more nifty team of players from the traditional IT channel.

As evidenced by our recent Telecom Service Provider: Cloud Leader or Laggard study, P2P collaboration is perceived as critical to the success of the large telecom service providers. And while these giants are in a powerful position to make a huge mark on IT-as-a-Service and cloud solutions, they need to lean on other players who have had a winning record in selling on-premise solutions with a high-touch consultative sales approach.

70% of our study’s vendor respondents indicate that telecom service providers are ‘highly strategic’ to their indirect channel strategy. This puts these newcomers to the IT-as-a-Service game in a uniquely powerful position to demand the tools they need to deliver long-term success. When interviewed, service providers agreed that two things were critical if they were to gain substantial traction with their customers:

 

  • Leverage the selling skills of traditional IT integrators to help customers migrate from on-premise to hybrid or cloud services

 

  • Develop a robust professional services offering to assess and deliver on cloud solutions, especially hybrid offerings.

 

While large providers are expected to do some combination of building, buying and partnering to grow these capabilities, it stands to reason that those vendors who actively support and foster P2P collaboration among service providers and other segments of their traditional channel will be more successful. And with 97% of vendors agreeing that P2P collaboration is necessary to help telecom SPs effectively accelerate market adoption of cloud solutions, there is certainly motivation for them to make this a higher priority.

Global service providers have invested heavily in high volume, efficient cost models. Given their conservative nature, it is doubtful whether they are willing or able to invest in building expensive professional services teams, which could take years to provide a compelling ROI. This provides a powerful inroad for vendors willing to become actively involved in fostering localized working relationships between these carriers and their global and regional systems integrators or VARs.  The trick is how to execute this, as many vendors have found that national “programmatic” methods of driving visibility and collaboration between their partner segments have been met with limited success. 

Cloud services are growing faster and more disruptively than many emerging technologies of the past.  Therefore, a wide variety of partner segments are building capabilities and entering the market from different angles, infrastructure and applications expertise, professional services skills, and application integration skills. Rather than playing against each other, the telecom service providers need to team up with the traditional VARs and systems integrators to leverage each others’ strengths and tackle this customer migration from on-premise to private to hybrid and ultimately to public cloud adoption.. Larger telecom service providers have the potential to be one of the most powerful players on the cloud services field. Building P2P relationships will not be insignificant or quick, but if facilitated well by the vendor, they will certainly be win-win for all involved. Our Executive Brief, Telecom Service Provider: Cloud Leader or Laggard is available for download here.

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Entry filed under: Industry Perspective. Tags: , , , , , .

Is Perception Reality? Both Pitchers and Catchers Required on the Cloud Ball field

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