What do service providers need to do differently today to stay relevant tomorrow?
October 25, 2016
Now that SDN & OpenFlow World Congress 2016 has come to a close, it's important to take a step back and understand some of the lessons that were learned during the event and how service providers can tackle them in their own businesses. From our point of view, there were five key takeaways, with the first being one of the most widely talked about concepts at the show.
1. Monetization is the next step for virtualization
After conducting countless proofs of concepts and trials, service providers are beginning to understand the benefits of using software-defined networking (SDN) and network functions virtualization (NFV). In many cases, service providers have already taken steps to implement virtualization in order to reduce costs—one of the technology's early drivers. Today, companies are looking at virtualized solutions to generate new top-line revenue by supporting and enabling the deployment of new services, ultimately allowing service providers to expand their customer base and reach into new markets, including the critical B2B space.
This includes offering larger enterprises the ability to quickly bring branch offices online and generate additional revenue through connectivity, such as IP VPNs, WAN optimization, cloud services and other services. For smaller and mid-size businesses, this can mean providing a single, self-service portal for all of their service needs, from basic connectivity to cloud-based and value-added services.
But generating new revenue from virtualization will require service providers to bring together virtualized network infrastructure and services, cloud applications, end-to-end orchestration as well as an ecosystem of partners all while preserving legacy BSS and OSS. This is no easy task, which brings us to point No. 2.
2. Partnerships are vital in virtualized environments
Now that competition has increased due to constant influx of new players, service providers need to work with trusted partners that can help them deploy end-to-end environments capable of delivering new network services, such as vCPE and SD-WAN. The development and deployment of services that extend beyond basic connectivity will be the foundation for establishing new revenue, and by bringing in partners that have the deep experience and knowledge in this space, service providers can move quickly into virtualized services without taking on unnecessary risk.
Service providers also need to partner with companies that would have once been competitors if they are to build the portfolio of solutions that appeal to their customers. Only by enabling these new relationships will service providers be able to meet the constantly shifting and increasing customer demands.
3. One size does not fit all in the B2B market
The pursuit of business services is one of the most important and significant projects for service providers that want to expand their revenue streams. Virtualization has opened the door for traditional network owners to reach beyond basic connectivity and give business customers the services they require.
That being said, service providers cannot treat the entire B2B market equally—small businesses often have very different demands than their enterprise counterparts. As such, service providers cannot establish one business archetype and apply it across their B2B line of business. Understanding the specific needs of small businesses vs. midsized or large businesses vs. companies from different industries will be critical to delivering the best possible and most profitable services and experience.
4. A global business case is needed
As service providers have made the leap from offering services through siloed environments to creating new business models for next-generation services, it’s not always easy to make a case based on services alone.
Instead, broader business cases that take a more holistic approach and span across all services will ultimately prove more rewarding. Rather than building single use cases for a firewall service, an SD-WAN service and a vCPE service, for example, companies should leverage a solution that incorporates all of these offerings under a single umbrella. While the first go at this may be challenging, doing so will get simpler and less expensive over time.
5. Delivery models need to change
In the end, it's all about delivery and how service providers give customers the products that they want. In today's competitive environment, taking too long to deliver a service may mean that the customer simply goes to a competitor that works faster. If service providers are to remain relevant and keep their customers happy, they need to leverage Agile development methodologies and establish collaborative environments that support faster service creation and delivery. By reducing the time it takes to bring a service to market to a matter of weeks, rather than months, service providers will find themselves much more capable of meeting customer expectations.
Virtualization will ultimately play a major role in all of these endeavors. But using the technology effectively may require some assistance. For more information on NEC/Netcracker NaaS and how it helps service providers capitalize on these trends and open new revenue streams, click here.