How are communications providers evolving to meet new demands?

Communications service providers (CSPs) are adapting their transformation strategies in order to support a wider range of connected digital solutions. This is according to a recent Gartner report, which also found that emerging technologies are having a transformative effect on CSPs.  

Cloud, virtualisation and open source

A new Forrester report indicates that enterprise cloud spending will soar this year. As a result, the increased adoption of cloud is creating a “transformative” effect on CSPs that are struggling to meet the challenge.

Companies are also rapidly adopting virtualisation and open source, which are causing a similar issue for CSPs. While digital business change is affecting many markets, providers in the communications sector are facing a significant challenge. 

According to Gartner, providers must develop a smart infrastructure utility business model. In addition to this, CSPs must also create private enterprise networks to complement the "slowly growing adjacent market revenue."

An evolving transformation strategy

According to the report, CSPs are evolving their transformation strategy based on two major criteria. Providers are now focusing on controlling technology change management and the pace of transformation.

At present, CSPs are spending the majority of their resources on customer acquisition, management and retention activities. As a consequence, companies are failing to invest in delivering a “clear value-for-money proposition.”

In turn, this creates an opening for companies to create their own value propositions. In this sense, cloud provides greater scale and flexibility in “everything from cellular network deployment to desktop as a service in a cloud-native mode.”

The cloud alters communications

Up until now, mobile network operators (MNOs) have had little or no interest in private cellular networks for enterprise customers. However, Gartner predicts that 40% of MNOs in developed markets will promote private cellular networks to large enterprises by 2020. 

Hyperscale cloud providers are also becoming the primary infrastructure providers for businesses across all industries. 10% of managed machine-to-machine (M2M) worldwide connectivity will be through hyperscale cloud providers - up from less than 1% in 2018.

As a result, these providers will become the key channel to market for technology-related purchases. As the report indicates, "hyperscale cloud providers will disrupt communications service sourcing processes" - predominantly through managed M2M connectivity.

Finally, cloud computing continues to provide a "disruptive foundation for all communication-related processes and offerings" in the enterprise. By 2023, the firm predicts that 30% of today's on-premises virtual desktop infrastructure users will access a workspace in the cloud using desktop as a service (DaaS).

What is the current state of hybrid cloud? Amit Chaudhry, VP of Product Marketing at DataStax, took a look at the rapid growth of cloud adoption in companies