The new breed of intermediaries offering cloud services will represent a substantial long-term opportunity for wholesale, says a new report. By Ian Scales.
Sometimes it's the dry, structural developments (rather than the shiny gadgetry) which auger the most significant changes in telecoms, and the steady development of the telecoms wholesale market is one of those.
This is the creaking, graunching sound of the IT and telecoms industry coming together and rearranging their responsibilities and market mechanisms. One of the big change-points is around the new wave of what we're currently calling, for want of a better name probably, cloud service providers.
Cloud services can encapsulate anything from Facebook to corporate hosting and managed services, but many of the companies providing them share some key characteristics that put them in the bracket of what Ovum analyst, Paris Burstyn in an Ovum report on telecoms wholesale, defines as the new intermediaries.
These are companies which have a position between the wholesale operator and the end customer, taking raw networking capacity, adding value and selling it on (from a network point of view) in some ways like a traditional telecoms company. But they tend to be smaller and have little in-house networking expertise of their own.
In many ways - from an operator's point of view - they are on blurred ground, halfway between being a traditional corporate user (say a bank) and a new operator (because as an online bank they have a huge network capacity and IT infrastructure requirement).
What they tend to have in common, says Burstyn, is a desire to concentrate on the services, not the infrastructure and capacity side of the equation, a burden which they're more than happy to have taken off their shoulders if the right offer is on the table.
"These cloud companies are intermediaries in that the telecoms wholesale capacity is being repackaged and passed on. That's a huge market opportunity as cloud grows. An opportunity for wholesale carriers to expand beyond their traditional customers," he says.
The problem, of course, is that many telecoms operators are not necessarily structured to best intercept the opportunity. In some cases servicing what has traditionally been viewed (and charged) as a corporate customer as a wholesale customer "looks like a loss of revenue", says Burstyn.
Nevertheless, the new intermediaries will grow in size steadily over the next decade or two and will have to be serviced in a way that suits them. Today's operators will have to make the business model switch or watch as others do and take the business.
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