Carrier Evolution

What is the future for a “service provider” when “everything becomes a service?” As much as telecom service providers see cloud computing as a revenue opportunity, cloud computing also enables sale of “everything else” as a service. There are obvious implications for hardware, software firms of all types.

What is less clear is how far the ramifications might extend. Consultants at Accenture say there are few business and revenue models that will remain untouched in the information technology business. In fact, whole business processes also will be available for purchase as a service.

That means firms such as Microsoft and Cisco each now support seven or more unique business models. “We predict that most leading technology companies will have five or more business models by 2015,” Accenture says.

Hardware manufacturers are becoming “infrastructure as a service” or “managed service” suppliers. Software publishers are becoming “software as a service” providers.

Communications service providers are becoming managed service providers. Consumer electronics suppliers are becoming content and services providers. Other firms, such as Amazon, are becoming cloud services providers.

The issue is how much cloud computing might enable or threaten telecom and entertainment services business models and revenue sources. For starters, there might be much more complexity, and that will be a source of both opportunity and challenges for service providers, who tend to prefer standardized, simple delivery modes.

The ability to customize services and features means more value for potential customers, but more complexity on the sales, service and support ends of the business. Some executives will want the ability to customized. Others will worry about the complexity.

Beyond that, the notion that “everything becomes a service” has upside and also represents threats. In principle, the ability to sell a business process or business applications as a service should mean telcos and cable companies can be retail suppliers of business processes and crucial business apps.

On the other hand, other suppliers of services might be able to add the “access” or “communications” feature themselves. In practice, “everything as a service” will provide both upside and downside for telcos and cable companies.