BOOST TO BUSINESS: OPERATOR STRATEGIES AND SOLUTIONS FOR ENTERPRISE CUSTOMERS

In recent years, enterprise-based offerings have emerged as a strong component in operators’ service portfolios, with the Indian telecom market moving away from being purely voice led to becoming data oriented. This trend, coupled with the growing demand for communication services and technology platforms from enterprises across various verticals, has made a strong business case for operators, who have been struggling with dwindling profits. The introduction and large-scale adoption of virtualisation, cloud services, big data analytics and machine-to-machine (M2M) communications have opened new windows of revenue and growth opportunities for operators.

The enterprise market in India is estimated to grow at 10 per cent annually over the next five years. The contribution of this segment to operators’ total revenues currently stands in the range of 8 per cent to 12 per cent. This number is set to grow manifold as contemporary enterprise solutions such as cloud-based storage, data centre services and managed services gain traction.

Operator performance and strategies

Telecom operators have formulated various strategies to leverage the enterprise advantage. Some have defined their focus in terms of audience; Bharti Airtel, for instance, continues to stay focused on small and medium businesses (SMBs) while BSNL and RCOM have a strong presence in the government domain. Others have differentiated themselves on the basis of service offerings. Videoconferencing has found favour across all industry verticals. Enterprises are also shifting from traditional leased lines to multiprotocol label switching solutions in a big way. In addition, operators are investing significantly in the areas of integrated platforms and converged services. The IP transition of enterprises is giving way to a greater deployment of unified communications.

Key trends

• Evolving managed services models: Managed services have become a norm for large enterprises, which have been outsourcing their communication needs to telecom and IT partners in a bid to focus better on core areas. However, the scope and nature of managed services have evolved significantly as operators have expanded their offerings from traditional managed network or application services to managed videoconferencing, managed security and managed cloud.  Enterprises today demand network optimisation, custom reports and regular auditing of networking infrastructure in addition to network monitoring and uptime.

• New focus areas: With enterprises demanding applications that can perform real-time tracking and capturing of meaningful data, cloud-based services and big data analytics are witnessing increased uptake. Vodafone India has announced its plans to start a cloud services marketplace to widen its range of offerings to corporate and business customers. In another instance, Tata Communications recently became an authorised partner of Google Cloud Platform. Under the terms of this agreement, Google’s new service, Google Cloud Interconnect, will connect with Tata Communications’ IZO Public platform, which enables companies to set up cloud computing facilities.

• Growing enterprise mobility market: The enterprise mobility market has expanded significantly as enterprises move beyond emails to adopt enterprise resource planning, customer relationship management, supply chain management, sales force automation, etc. Insurance, pharmaceuticals and logistics companies have emerged as the biggest users of such solutions, owing to a strong field sales force. In fact, several companies are now planning to mobilise these solutions and make them accessible through employee handsets. The bring-your-own-device concept is also finding favour among several enterprises, though security remains a concern. By mid-2015, the Indian enterprise mobility market is expected to reach $1 billion, as per some industry estimates.

• M2M and the internet of things: The industry is optimistic about the wide-scale adoption of M2M solutions across automotive, utility and retail verticals in India. For instance, Vodafone India has put bar-coded SIM cards in Mahindra Reva cars through which information like service requirements, battery charge and remote instruction downloads for maps can be retrieved on a real-time basis. Enterprises in the logistics, manufacturing and transportation industries are also increasingly adopting M2M services to automate processes.

Government emerging as a key vertical

With the launch of its ambitious Digital India programme, the government has opened new doors of opportunities for the telecom and IT sectors. The programme requires creating digital identities, making documents and certificates available on a cloud platform, making government services available on online and mobile platforms on a real-time basis, ensuring electronic and cashless financial transactions, and the seamless integration of government departments. Government businesses are already moving from e-governance to m-governance models, wherein most services can be accessed through handsets.

The Rs 1,130 billion Digital India initiative aims at transforming India into a digitally empowered society and knowledge economy. This cannot be done without the active participation of the telecom sector. Government departments will turn to operators in large numbers for the deployment of cloud and storage solutions, big data analytics, etc.

The establishment of 100 smart cities, as envisaged by the government, will also require significant support from telecom operators in terms of M2M communications and converged platforms. A smart city makes extensive use of information and communication technology (ICT) to facilitate advanced communications infrastructure like back-end intelligent systems to manage traffic flows, real-time monitoring and video surveillance to ensure public safety, and the installation of utility meters and systems for traffic information.

The way forward

Owing to its potential for high revenues and margins, the enterprise segment will attract significant attention from operators in the coming years. Factors such as digitisation, ICT adoption by government agencies, the upgrading of IT infrastructure by large and small companies, the usage of enterprise mobility solutions and the adoption of cloud services will drive growth in the segment, thereby promising a significant revenue potential for cash-starved operators in the future.

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Communications Service Providers (CSP's) are increasingly looking to MANAGED SERVICES to improve their performance and keep them competitive.

Driven by the demands of rising markets, rapid changes in new technology, greater competition and the relentless drive to improve bottom line results, communications service providers are increasingly looking to managed services to improve their performance and keep them competitive.

Initially, managed services were mainly about the outsourcing of low-level, back-end processes such as monitoring IT systems or the network, with the sole primary goal of lowering costs. A handful of newer market entrants later broke the mold – for example, Bharti Airtel when it announced its revenue sharing model with IBM in 2003. This arrangement was initially met with skepticism, but the company is now heralded by many as an exceptional case study.

Over time, more companies have begun to embrace these kinds of business models in the fight to get ahead, but how far has the
industry really come? Is the pace of change what everyone expected? Which core competencies do operators need to keep in-house and what can be done better by a managed service provider?

The spectrum of all managed services is broad, but the terms ‘outsourcing’ and ‘managed services’ are being used interchangeably, though in general, managed services are often considered to have a broader scope. We are not distinguishing between these terms but looking across the spectrum of how service providers are partnering with companies offering outsourcing services in functional areas or stacks of the BSS/OSS area. Some other terms, such as out-tasking are used too, which is similar in execution to outsourcing but denotes a relatively narrow function or task being outsourced.

Outsourcing in the communications sectors began with organizations like IBM, CSC and some independent software vendors, primarily dealing with managed data center and billing applications or operations (such as bill rendering and mailing). These might be delivered in full outsourcing or facilities management engagements.
Later, some network equipment manufacturers saw the opportunity to turn their network equipment and, in some cases, OSS or third party OSS offerings into a managed services offering. Operators outsourcing their network operations to these network equipment makers was logical at first pass.

For more details visit us @ www.urssystems.com

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