The other day, I met with the strategy director of a European telco. Let’s call him Art. We shared an informal discussion about the future of telcos. Personally, I am fairly skeptical about the prospects of telcos to recover ground – in particular in Europe.
Consumers are more concerned about the apps they use and the devices that they have than what connectivity they use, as I outline in the report The Future Of Over-The-Top Services. Forrester’s Customer Experience Index, which measures consumer perceptions of telco services, shows telcos near the bottom of all sector readings.
On the business side, data from Forrester’s Business Technographics® Global Networks And Telecommunications Survey, 2014 shows that business users trust systems integrators and independent solution specialists more than telcos with almost all voice and data service, because they feel that telcos don’t understand their specific business requirements as well.
Add an unfavorable regulatory environment — which, under the umbrella of the net neutrality debate, is about to close the door on commercial relationships regarding quality connectivity between content and network providers — and it becomes difficult to be wildly optimistic about the future of telcos. Yet, this is not where our discussion ended. Art pointed to three major issues where telcos will need shock therapy:
In our recently completed Q3 2013 Global State Of Enterprise Architecture Online Survey, big data for real-time analytics moved from the No. 3 most revolutionary technology to the No. 2 position, according to the 116 enterprise architects who participated. This reflects the importance firms now place on turning vast amounts of data into immediate insight. And this trend is extremely important to telecommunication industry communication service providers (CSPs), who are sitting on a gold mine of data about what subscribers are doing on their mobile devices.
Let’s break this down a bit more -- according to the United Nations, there are about 2 billion mobile broadband subscriptions globally (that’s about 28% of the world’s 7.1 billion people). That’s a huge number of perpetually connected people, using bunches of apps for both work and personal. This is part of what we call the mobile mind shift, and it’s not about smartphones and tablets; rather, it’s about the changing expectations that pervasive mobile computing and broadband wireless have. According to a recent report, "The Mobile Mind Shift Index," we estimate 21% of the adult online US population now expects that any information is available on any appropriate device, in context, at their moment of need (see Josh Bernoff’s May 2013 blog Introducing The Mobile Mindshift Index). And this number is going to grow significantly over the next few years.
If you want to be the best in data center operations you are right to benchmark yourself against the cloud computing leaders – just don’t delude yourself into thinking you can match them.
In our latest research report, Rich Fichera and I updated a 2007 study that looked at what enterprise infrastructure leaders could learn from the best in the cloud and hosting market. We found that while they may have greater buying power, deeper IT R&D and huge security teams, many of their best practices apply to a standard enterprise data center – or at least part of it.
There are several key differences between you and the cloud leaders, many of which are detailed in the table below. Perhaps the starkest however is that for the clouds, they are the product. And that means they get budgetary priority and R&D attention that I&O leaders in the enterprise can only dream about.