The service provider (SP) industry is at an inflection point. During the past couple of years, SPs have dealt with the economic downturn by focusing the majority of their attention on cutting costs – to the point where there’s very little left to cut. Despite continued economic uncertainty, there is a shift underway to revitalize revenue growth. SPs are eager to identify and execute on new sources of revenue growth – however, there is also clear recognition that revenue growth cannot come at the expense of profitability. Growth under such conditions means taking advantage of market transitions as they are happening, creating new platforms for growth.
One key opportunity for SPs lies in providing a more expansive set of services to small and medium sized businesses (SMBs)—particularly leveraging cloud-based capabilities. Based on our estimates, the SMB communications and IT infrastructure market collectively represents more than $120 billion in spend for 2010. SPs currently address 60 percent of this spend. By extending into cloud services, much of the remaining 40 percent becomes addressable.
Cisco IBSG Service Provider Director, Tine Christensen, addresses this opportunity in this video: