Traditionally, service providers built their own telecoms platforms, whether developing in-house or via an external vendor, writes Bertrand Pourcelot, the director-general of Centile Telecom Applications.
They did this for a couple of reasons: first, there was that legacy-thinking that owning the network was important; second, it gave them complete control; and thirdly, there was the perception that they had something on which they could build the future. Telecoms resellers had to make do with partnering service providers and working within the pricing models that were viable.
Then along came the cloud and suddenly, the market has been turned on its head. With cloud-based telecom services, anyone can, in theory, become a service provider, simply by taking advantage of a third-party platform. Existing service providers benefit too, with the flexibility that the cloud provides to modernize services and move away from maintaining expensive legacy equipment. The cloud is also a gateway to innovation (especially when based on platforms that have powerful application program interfaces (APIs)), enabling service providers to more rapidly create service packages. Examples include services targeted towards specific vertical markets, or mobile-first offerings, where enterprise mobility is at the heart of the service, not just an add-on. The cloud also paves the way for new pricing models, giving service providers another way in which to differentiate themselves.
However, as is usually the case, theory and practical execution are very different. There are a lot of different elements and options to consider, plus no two service providers – whether existing or in transition to becoming one – are likely to have the same requirements. For instance, one company may be better placed to take ready-to-go services, while another may need something that is more customizable. That might be because they have existing investments and competencies that need to be factored into the decision-making process, including SIP trunking and networking to port over to the new platform.
This option may give the service provider more control, but they will still be responsible for new releases or iterative improvements of services. That’s fine if they have the resources to make that happen, not just now but in the future.
Hiring a platform is usually the shortest time-to-market and the most attractive to new market entrants. The downside is the possible risk of being locked into one platform, with pricing models that hinder profit margins or may require forklift investment, with customizations and evolutions dictated by the technology partner. That said, not all platforms enforce vendor lock-in and the ‘hire’ option can be a good way for a new entrant to get started, so long as they watch out for hidden exit costs and other constraints, such as portability, DNS names, endpoint provisioning services and so on.
Checklist of questions even the most experienced service provider can find it hard to select the right cloud-based platform, so here are a few questions to consider:
Is the full platform for hire, or just a component? Do you need full control?
What about support for open APIs?
For existing providers, can they port existing SIP trunks over to the platform?
Who is managing the security and risk aspects of the service? What about GDPR compliance?
Who is providing the platform – another service provider, a vendor, an integrator (and are they a possible competitor or have vested interests that could be a future problem?)
What pricing models does the platform provider offer – and how flexible are these? How much upfront investment is required? What level of ‘lock in’ is enforced? Is the pricing all-inclusive or are there hidden costs?
What about the future development of the platform – is there a clear roadmap? What about integrations with other applications and services (eg CRM, video conferencing, etc)?
And finally, how does the platform enable you to differentiate, if everyone is using the same platform?
Every service provider or telecom reseller is going to have its own specific requirements and the ‘hire’ or ‘buy’ options may not suit every company: for some, there may be reasons why ‘build’ is still their preference. However, what has become clear is that the range of options now available not only means that the market is open to more entrants, there is also more scope than ever before to differentiate, despite this being an increasingly crowded and competitive market.