Blog | How APAC service providers can use cloud to get ahead of OTT curve

By Sacha Gera

Enterprise communications and collaboration are undergoing a major transformation. To a large extent, this is being driven by a new generation of customers, employees and partners who have grown up mobile first, cloud first and who are constantly connected.

This is especially true for the Asia Pacific region, where the volume of mobile data traffic towers above all other regions, and where millennials make up 25 percent of the total workforce population. These young workers are tech-savvy, open to change, and they come with a brand new set of communication preferences — telco players who aren’t adapting fast enough to meet their demands for value-added services and capabilities risk becoming obsolete.

An equally urgent risk for Communications Service Providers (CSPs) to consider is the emergence of disruptors whose key offerings are scalable, reliable, and cost-effective platforms, capable of powering an attractive class of communication solutions for large enterprises, such as “Over-the-Top” (OTT) communications applications and content services delivered via cloud platforms.

These companies are aggressively expanding their customer base by encouraging other companies to innovate using their pre-built, customizable engines. While CSPs are in a unique position to own the next generation of real-time communications (RTC) delivered via software platforms, they have been slow to adopt technologies that are replacing their legacy services.

The good news is that CSPs stand a good chance of recapturing the Communications Platform-as-a-Service (CPaaS) market share from new entrants by tapping into existing platforms to expand their portfolio. The key is to act fast to ensure that new innovations that deliver enhanced reliability, scalability and security are rolled out in time to ride the current wave of customer demand.

In 2017, Southeast Asia’s demand for cloud-based or hosted unified communications services is predicted to reach $98 million by 2022 –- up from just $60 million in 2017. This represents a tremendous opportunity for CSPs to establish their lead in the regional market, and they already possess the IT resources to make it happen.

As CSPs bring more OTT applications into the network, it is also crucial for them to have the right back-end infrastructure in place – one that is capable of supporting ongoing expansions. Before embarking on their transformation process, CSPs need to carefully consider a CPaaS that most complements their existing business model while delivering new values to their embedded base.

Why roll out these services if they will not enhance revenue -– and margins?

With traditional, transactional transport revenues under increasing price pressure, opting into a proven, pre-integrated set of CPaaS offering (including voice features such as call routing, text-to-speech, conference calls, messaging, multimedia messaging, enhancement of existing “phone numbers”, mobility services, security services and more) can lead to growth quickly, without heavy upfront capex.

New services can all be delivered by software via an application programming interface (API) – which is easier for service providers, easier for enterprises and more secure and sustainable than legacy solutions that require equipment, maintenance and complex systems and contracts. This can potentially boost the adoption rate of cloud-based UC offerings and IP voice across Asia, where many companies still heavily rely on on-premise UC solutions and traditional telephony.

While CSP challengers are experiencing significant growth in sales and margins, APIs allow CSPs to also tap that revenue without having to “reinvent the wheel.” Furthermore, by leveraging APIs, a CSPs enterprise customers can also benefit in the following ways:

CPaaS technology and platforms enable continuous delivery and deployment for small to large, and simple to complex applications. Software makes it exponentially easier and more flexible to unlock innovation and creativity – for example, microservices that are suitable for certain divisions of an enterprise, but not required across the enterprise.

Data can be harnessed given the digital DNA of CPaaS. This data has huge value when collected on cloud-native communications platforms – successful companies are building stronger relationships with their customers by creating products, services and processes that blend what they know about those customers online as well as offline.

Providing trusted services which comply with new privacy regulations enables the development of services which drive more productivity within enterprises – while also providing convenient and trusted applications to end-customers. This includes regulations such as the Singapore Personal Data Protection Act and Australia Privacy Act.

It is evident that transformation is the only way forward for CSPs. To remain competitive and to build up their tolerance for the risk brought about by new industry entrants, CSPs need to rethink, redesign and roll out digital real-time communications services that are made better – and more secure – on carrier-grade network infrastructure. Regardless of their unique communication needs, at the end of the day, businesses and consumers alike will pay a premium for quality services that are securely delivered.

The author is the SVP for cloud products at Ribbon Communications

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