Communication Service Providers (CSPs) are spending enormous sums of money on cloudification as well as other new technologies, such as 5G, automation, artificial intelligence, and data analytics, with the aim of becoming true digital service providers. They seek to enable new use cases and ecosystems that will reignite revenue growth. There is a lot of buzz about Industry 4.0 use cases such as connected cars and autonomous vehicles, drones and augmented/virtual reality for mining, transportation, factories, and health verticals.

With every CSP moving to cloud, where will differentiation come from?

A cloud-native architecture is a prerequisite to deliver the required throughput, ultra-low latency, and extreme reliability these use cases demand. CSPs are also expecting to benefit from rapid onboarding, continuous software updates, operational efficiency and scaling to bring innovation to customers in record time.

This is a common answer across the industry. This line from the movie The Incredibles seems prescient, “When everyone is super, no one will be.” With all CSPs moving to cloud-based architectures, these advantages will ultimately be table stakes rather than true differentiators.

The first mover advantage

Being a leader in the transformation to a cloud architecture provides a CSP the opportunity to attract consumers and enterprises with new, cloud-enabled services before its peers and gain a reputation as a market leader. With good customer experience, these customers are more easily retained than new customers gained. Likewise, early to cloud CSPs are in position to attract ecosystem partners that will provide ongoing service innovation that can help retain and attract customers while growing revenue and operating profit that can fuel further investment in innovation to stay ahead of the competition. Establishing partnerships earlier than competitors provides the widest range of choices to pick the best partners and arrangements.

Market leading and continuous innovation

The combination of cloud-native, open ecosystems and 5G slicing opens a path to differentiation through innovation in ways not feasible to service providers in the past. These could be innovations that improve upon today’s services. For example, dedicated and SLA-measured connectivity with specific performance, security, and quality characteristics could be attractive for select applications or industry 4.0 enterprises. One such application is competitive RPG gaming on the go with guaranteed performance. Innovations may also take the form of new 5G and Industry 4.0 use cases where milliseconds of latency count and data intensive processing is required. For example, physical industries can adopt new approaches to autonomous driving, managing, optimizing, securing and surveilling their facilities, assets, and tools. Enterprises may also see value in no longer building and maintaining their own private networks. Instead, cloud plus 5G network slicing allow them to leverage shared CSP infrastructure while still reaping the network and data security and guaranteed capacity benefits of a private network.

New approaches to pricing

Network slicing provides the ability to deliver guaranteed levels of quality and security and unlock use cases non-sliced network offerings can’t deliver. This opens the door for tiered pricing tuned to the use case and customer need. Slicing that enables an Industry 4.0 use case, for example, could earn more than simple connectivity fees based on the SLA required. Usage-based charging could focus on data, resource or connectivity usage. Size-based charging could key off of the number of devices or number of subscriptions. Different levels of slice management could be offered as tiers of value-added services.

A cloud-native platform is essential

Whether your aim is to be first to market or a true innovator when it comes to use cases or pricing, a cloud-native network and cloud-oriented business processes are key prerequisites. These are the new table stakes. While not differentiating in themselves, they must be implemented flawlessly to provide the opportunity for differentiation. But how can CSPs confidently take the technology leap into a cloud-native future that can be a complex mix of public and private clouds while appropriately managing legacy investments? How do they shift business models to become an innovation leader? Get it wrong and you risk alienating existing customers if quality or service lags. Technical missteps risk cost and schedule overruns that could eliminate sought after efficiency gains. Delays could reduce or eliminate the ‘first mover’ advantage or even lead to competitive disadvantage if establishing cloud capabilities lags competitors.  These risks are amplified with the lack of in-house cloud skills and tools.

An experienced partner can help

To make sure you’re investing in the right cloud technology for your business goals, get the best operational and business results, and create a well-architected security framework that addresses the new perimeter of your network - including clouds you may not own - you need a clear plan, optimized solutions, and established tools and methodologies. Selecting a partner with cloud transformation experience and deep knowledge of networking and implementation is a crucial step.
 
Nokia Cloud Transformation Consulting has the experience, insights and methods to help you evolve strategically and realize your cloud vision. Having helped customers across the globe with their move to cloud, you can benefit from their broad experience.
 
Learn more about how Nokia Cloud Transformation Consulting can help you become a leader in moving your business to public, private or hybrid cloud.