Sify_IoT_20181212
Nikhil Batra
Senior Research Manager, Telecommunications,
IDC

Accelerating Toward Becoming A Digital Service Provider: Evolving Telecom Landscape In India

In today’s hyper-competitive world, telecom operators are constantly reinventing themselves to stay relevant in the market. Along with growing their share of the communications wallet, communication service providers (CSPs) are also seeking to become the ICT partner of choice for enterprises that are seeing rapid growth, both in their respective countries and regionally. These enterprises are embracing the third platform and initiating complex efforts to initiate digital transformation (DX) in their businesses. To this end, CSPs are helping them achieve their goals with solution portfolios that include software-defined networking (SDN), hybrid cloud deployments, and managed services.

CSPs are attempting to go digital themselves as they transform their networks to incorporate software-defined and virtualization paradigms, investing heavily in analytics, automation, and other emerging technologies that will transform not just their network architectures but their overall business.

The rapid expansion of the Indian economy has meant that Indian enterprises are growing quickly and demanding new technologies to both connect and digitally transform their respective businesses. Cloud services in India are expected to grow at an unprecedented pace (38.7 percent CAGR over the next 5 years). Moreover, the cloud conversation has changed from whether or not cloud to how many clouds, and enterprises are looking for solutions that provide an optimal performance of their workloads irrespective of where they are hosted.

Much of the Asia/Pacific region beyond China is experiencing strong economic growth as well, with the rise of new regional centers beyond the traditional hubs of Tokyo, Hong Kong, and Singapore. India and Southeast Asia are a big part of this growth so the demand for international traffic, VPNs, and other ICT services is rising fast in India.

Transformation to a digital service provider

Most telcos today have responded by expanding into adjacent areas and providing not just technology, but business expertise along with it. Following are some of the key focus areas for telcos, in order to differentiate themselves in a crowded marketplace:

Treating networks as a strategic asset. Telcos are promoting the construction of the network of the future. However, the technology is not an end in itself. To satisfy an enterprise’s need for a faster, flexible, and agile network to support their DX initiatives, telcos are deploying advanced network analytics capabilities to understand, from an applications standpoint, the composition of the network and its workloads – with an aim to provide a superior experience to their respective organizations and end customers. This network analytics and intelligence supports the evolution of the network operator from three major dimensions:

Customer experience. Provides an enhanced digital experience to end users by understanding the granular details of how they are utilizing the networks

Financial. Drive wiser investment decisions for capacity planning and enhancing the network based on exactly what and where is being demanded from it

Data monetization. Create new revenue streams through internal (personalized and targeted offerings) and external monetization of data

Going forward, as the network itself evolves into an intelligent platform, carriers that can provide critical insights to organizations by leveraging a new class of intelligence obtained from understanding what is happening within their networks, will be more successful in the market.

Provide a comprehensive portfolio of software-defined networks and virtual network services. As traditional network offerings become table stakes, CSPs are increasingly using SDN to differentiate themselves. The benefits of SDN (greater automation, faster response, and improved flexibility) in the data center are well-known. SDN outside the data center helps manage cloud workloads, build hybrid networks of private and public internet, and reduce overall network cost/complexity. Telcos are curating a wide portfolio of services, including on-demand bandwidth offerings, SD-WAN, SD-LAN, and virtual network services, such as vRouter, vFirewall, and vWAN optimization. SD-WAN is fast becoming an integral part of enterprise network strategy with almost 60 percent of organizations in India having already deployed or planning to deploy an SD-WAN solution in the next 18 months and CSPs are increasingly using these services to create more traction in the market.

Act as a strategic business partner. As organizations embark on their DX journeys, they need partners that understand the business and help achieve business objectives through adoption of third platform technologies. These technologies, such as cloud, SD-WAN, mobility, and internet of things (IoT), have strong momentum behind them and impact the enterprise operational ICT environment in multiple dimensions. Complexity of the technology landscape means that the need for strategic guidance for enterprises has never been more important. Telcos have been investing significantly to build their professional services capabilities over the past few years and are increasingly acting as a trusted advisor to these enterprises to help them on their digital journeys.

Secure the enterprise with a comprehensive managed security services portfolio. Security has never been more important. Irrespective of the size of the organization cyber-attacks are quickly growing in frequency and sophistication while the cyber-defense talent pool is not. The ability to combine business, network, and IT security skills has been an area of focus for telcos, and almost all the CSPs have enhanced their basic managed security services (MSS) portfolio over the past 12 months. However, advanced MSS capabilities, the delivery and onboarding flexibility, price competitiveness, security operations center (SOC) capabilities, complementary services (including forensics or training services), service-level agreements (SLAs), and self-service customer portal capabilities vastly vary from one telco to the other. Successful telcos are planning ahead, identifying new technologies and addressing the skilled labor shortages, and working with partners to develop a well-rounded security services ecosystem.

What does this mean for enterprise in India?

The enterprise networking environment continues to evolve. Driven by DX, new technologies, and new expectations, enterprise needs from telcos are also evolving. Staying ahead of the digital curve requires laying a foundation that is supported not only by the right ICT infrastructure, but also by a comprehensive network and partner ecosystem. Consider the following when embarking on your DX journey:

The network is critical to your DX journey. Traditional enterprise networks were neither architected for cloud nor to support DX. However, as enterprise workloads move to the cloud, the network needs to evolve as well to support the new application paradigm. Enterprises worldwide are embracing hybrid networks that combine MPLS-style reliability and quality of service (QoS) with more cost-effective internet connectivity for lower-priority applications. Evaluate software-defined technologies, such as SD-WAN, to support your DX journey. SD-WAN is a solution that came about in response to this need and holds the promise of aligning the WAN with the application networking requirements of a digitally transformed enterprise, while keeping a tab on operational costs. However, while evaluating technology vendors and SPs, consider the service provider’s capability and road map to deliver the long-term strategy of not just SD-WAN but a wider SDN portfolio including virtual network services.

Manage what you measure. SLAs for enterprises that have moved applications/workloads to the cloud should be less about the dedicated network bandwidth connecting to their workload and more about the performance of the migrated workload, ensuring that the application can be accessed with a certain degree of latency and reliability. In today’s hybrid-cloud world, enterprises are looking for solutions that provide an optimal performance of their workloads irrespective of where they are hosted. Hence, organizations should look to partner with telcos that can define network performance in terms of business objectives and provide SLAs, such as application performance, and even link them back to the enterprise business KPIs.

Start with security. Cyberthreats are increasing exponentially and enterprises are hard-pressed to meet the threat protection on their own. They will need to adopt best-of breed technologies while depending on their CSPs that have a comprehensive view of threats emanating over the network.

The telco landscape is being reshaped by enterprise transformation to digital platforms. The impact of key third-platform technologies and accelerators, and the enterprises’ desire to leverage those technologies to differentiate themselves in a crowded marketplace, is clearly visible. In the short term, SD-WAN and enterprise cloud connections will be important, followed by 5G, software-defined networks, and virtual network services (VNS), with a distinct focus on customer experience throughout.

Most of the telcos SPs today have responded to these enterprise requirements by expanding into adjacent areas and providing not just the technology, but the business expertise along with it. However, they differentiate themselves based on their focus and key strategic capabilities. Success of enterprises in India in the world of DX depends on how CSPs respond to these demands.

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