By Robert Fox
Back in the 1970’s, the Florida Orange Growers Association, trying to increase the consumption of oranges across the country, built an advertising campaign around the slogan: “Orange juice, it’s not just for breakfast anymore.”
Today as I talk with clients and survey the current technology landscape, a paraphrase of that old slogan echoes through my head: “Cloud computing — it’s not just for the IT department anymore.”
While cloud computing has a proven track record of helping firms’ IT centers to be more flexible and cost effective, increasingly cloud is finding its way into the business strategy arena where it is being tapped to create whole new business models and drive new revenue streams.
But, unlike the orange juice campaign, this cloud shift is not driven solely by the tech firms. It’s being driven by a number of external factors: the increased use of mobile devices and social media, the rise of Big Data and the increasing hyper-connectivity of all of our devices. And most of all, it’s being driven by consumers themselves. They’ve adopted all of these technologies into their work and personal lives – whether they’re bringing their own devices to work or shopping on their mobile phones – and have come to expect personalized experiences and services from all of their business interactions.
To more clearly understand how organizations view the cloud today and how they perceive it evolving, late last year IBM and the Economist Intelligence Unit surveyed 572 business and technology executives from across the globe. This week we released a study based on that report that looked specifically at the responses from telecom industry leaders. Those results highlight how communications service providers are gearing up to become cloud enablers.
While relatively few communications service providers actively embrace cloud today to drive business model innovation, this will change dramatically in the next few years. Our research shows that although only 11 percent of telecom respondents have substantially implemented cloud today, 41 percent expect to have done so over the next three years. And even more strikingly, 57 percent of them indicated they plan to rely on cloud for business model innovation within the next three years (compared to only 35 percent in the overall survey).
We’re at the tipping point where cloud will start delivering real business value in the telecommunications industry. This represents a unique and extremely welcome opportunity for communications service providers urgently seeking new services to drive incremental revenue.
Thanks to their unique assets, such as communications networks, established business with enterprises, and trusted customer relationships, communications service providers are poised to become the cloud service provider for consumers and the enterprise. They can become cloud providers themselves or they can use the cloud as a delivery model through which they can drive additional business by tapping adjacent, vertical markets (think banking, healthcare, and government). Or they can take the route of such companies as Vodafone which is providing a smarter home initiative.
To win in this new game telecom industry players must make sure they understand the evolving ecosystems, partnerships and business models. They have to evaluate where they can play most successfully given their formidable strategic assets, and consider how to play. To help them in these efforts IBM is enhancing its Smart Cloud Solutions portfolio for service providers this week with a series of new offerings, because now is the time to harness the power of cloud and exploit the opportunities.