Seven challenges faced by cloud providers entering the wholesale telecoms market

The global cloud services market has seen substantial growth in the last five years, with companies turning to cloud for new revenue growth and customer solutions.

The global cloud services market has seen substantial growth in the last five years, with companies turning to cloud for new revenue growth and customer solutions.

This proliferation of cloud services is expected to continue over the coming years, with Gartner predicting ongoing growth across all public cloud services market segments at a CAGR of 17.4% through 2017. In addition, Gartner forecasts end-user spending on public cloud services will grow 19% in 2014 to $158 billion, reaching nearly $250 billion by 2017.

In order to capitalise on this trajectory, today’s cloud companies are looking to accelerate growth by providing private/white label solutions to wholesale carriers and Push-to-Talk (PTT) providers with a small and mid-size business (SMB) customer base. Major wholesale carriers are reciprocating the interest, looking at providing cloud services by either developing their own platforms or acquiring companies that have established such platforms.

As more organisations look to the cloud for enhanced efficiency and improved cash flow, wholesale carriers must make the leap to selling cloud services in order to remain competitive, gain new customers and retain existing clientele.

As with entrance into any new market segment, this process can be fraught with challenges for cloud providers. Below are seven common barriers to entry faced by cloud providers entering the wholesale telecommunications market:

Common Challenges

1) Before embarking on a partnership with a wholesale services or PTT provider, cloud companies first need to identify and understand each customers’ specific goals and how to meet them. Just offering a cloud solution doesn’t solve the problem – not all clouds are created equal – and not all customer requirements are the same

2) Upon understanding their wholesale carrier or PTT customers, the cloud provider must articulate its own business strategy. This includes executing a full analysis of the market, as well as developing a strategic business case

3) Evaluating how a wholesale or PTT partner’s business process interfaces with that of a cloud provider company is key to the ultimate capability of monetising on your solution. If you can’t deliver it or bill for it, you can’t make money

4) Business process implementation is important, but so is your overall technical architecture design. When working with a wholesale or PTT partner, cloud providers need to determine what network or platform changes are needed in order to support expected customer demand. This is important not only to serve expected customers from the beginning, but also to accommodate future growth

5) By knowing what they need to have in place, identifying a wholesale/PTT partner that can grow the cloud providers’ service and business portfolio becomes much easier. This will help overcome potential barriers, giving the cloud provider a better chance for a successful operational and business implementation

6) Cloud providers should not assume that selling their companies will solve all problems. Acquisitions are filled with their own challenges. By dipping their toe in the water with the right partner, a cloud provider is halfway there. For a provider whose ultimate goal is an acquisition, knowing this as they enter the process can ensure the proper precautions and right steps are taken to help them achieve this ultimate goal

7) Finally, cloud companies must realise they can’t do this on their own. Identifying the right wholesale and PTT partners requires certain skills that a third-party perspective can provide.

Cloud technology companies seeking to establish a global presence and expand their product and service sets within the wholesale telecoms market often turn to third-party consultants for strategic guidance and expertise.

Boutique consultancy firms offer an added value over large consulting companies in that they can deliver customised, strategic and customer-specific tools and guidance. A select few also have the capability of providing direct insight from industry experts in the global technical landscape. These thought-leaders leverage groundbreaking methodology and strategic alliances with telecom carriers, content providers and other major corporations from all over the globe to enable technology companies to accelerate growth and business success.

Third-party providers specialising in the wholesale space keep a pulse on the market. This enables them to be instrumental in supporting cloud providers with the development of business models, go-to-market strategies, and sales and technical training, as well as supporting the organisations in front of investors by explaining the financial model and growth possibilities within the wholesale telecoms sector.

Furthermore, select consulting firms work in tandem with the wholesale community to provide customised solutions for the end-customers – the small and medium-sized business sector – of the carriers. By helping cloud providers tailor their individual brands to provide a private/white label solution, carriers receive the flexibility they need to better address their end-user needs.

From a financial, time and strategic perspective, hiring the right consulting firm can help cloud providers navigate the complex wholesale market, ask the tough questions and assist companies overcome challenges to ensure both short and long-term business success.

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