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SP360: Service Provider

By Wouter Belmans and Uwe Lambrette, Directors, Cisco Internet Business Solutions Group

As cloud computing matures and hype becomes reality, uptake among small and medium-sized businesses (SMBs) and large enterprises is increasing. And although the cloud is still in its infancy, the Cisco Internet Business Solutions Group (IBSG) believes it is an appropriate time to ask: “How is the cloud value chain taking shape, and where are the battlefields I need to be concerned about?”

Cisco IBSG has found that major disruptions are taking place on six battlefields across the value chain:

1. SaaS Will Further Disrupt the Independent Software Vendor (ISV) Landscape

2. PaaS: Development Platforms Will Be at the Core of the Cloud

3. IaaS: Web-Grade and Enterprise-Grade Infrastructure Services Continue To Battle Each Other

4. Facility and Infrastructure Strategies Are Often-Forgotten Fundamentals

1) On-net cloud delivers the value of WAN / IT integration.
2) Mega-exchanges deliver the value of an ecosystem of players that host services together.

5. Commercial Activity Channels Are Being Disrupted by Cloud Brokers

6. Professional Services Require a Shift to Activities that Add More Business Value

Network service providers (NSPs) must be aware of these value-chain dynamics when determining their go-to-market strategies, which include:

Across the various go-to-market strategies, NSPs need to make a clear choice about how to address professional service requirements—either by building internally, partnering, or acquiring a company with the needed skill sets. Commercial success will often be greater and occur faster (with less risk) where new cloud business models can be layered on top of existing services. Companies that grow from the core can reuse existing capabilities, including customer relationships and sales channels. For telecommunications companies, it often makes sense to grow a cloud portfolio from a base of hosted communications and collaboration products.

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