Public Cloud Migration: The Business Case
Mark Collins discusses just some of the benefits of cloud migration for the telecommunications industry
Undoubtedly, telcos moving to the public cloud will eliminate costly overheads, with the potential to secure an 80% reduction in Total Cost of Ownership (TCO) over a five-year period well-documented. These are significant cost savings but, considering the change involved in a comprehensive public cloud migration, businesses contemplating the move are looking at why else they should make such a radical transformation, asking what such a shift will mean for the business, not only from a cost perspective.
With this in mind, how can the benefits of public cloud migration be measured and how can telcos not only build a robust business case in favor of public cloud migration but put the right KPIs in place to ensure the successful delivery of that migration too?
The cost equation
While not the sole reason for the migration, cost benefits still tend to be a major driver of a move to the public cloud for telcos. But, we need to look beyond the traditional RFP of three years, with five years representing the minimum benchmark from which to truly judge the cost benefits. Public cloud isn’t a quick fix and requires commercial maturity to drive real value, optimizing the overall cost model right across the organization.
Many telcos are operating with long-standing, disparate systems and a selection of hardware, all of which need replacing or updating at least every four to five years, often at great cost, disruption, and with a lot of effort. A successful migration ensures a reduction in support costs, costs that will continue to lower as the public cloud environment matures. At the same time, it delivers additional value to the business, driving positive outcomes right across the organization.
The CapEx / OpEx debate must also be considered. What ‘cost’ means to one telco, might not mean the same to another and there can be disagreements about whether public cloud expenditure is CapEx or OpEx, often entirely dependent on how telcos are managing their finances. Regardless of whether it’s CapEx or OpEx, a successful migration can ensure greater control over costs, with unexpected systems and hardware expenditure a thing of the past, putting the telco firmly in the driving seat when it comes to managing associated IT costs.
Cost considerations can pale into almost insignificance in the shadow of increased business agility. Cloud agility touches all areas of the business – from the shop window of the website, through to the back-office systems powering day-to-day operations. The public cloud enables a seamless integration of new products and services into the mix, guaranteeing consistency and continuity of customer service and experience. It’s not about a big bang approach but the leveraging of public cloud capabilities to optimize the possibilities it provides to develop a business. This agility and greatly expedited time to market for new products and services are crucial if telcos are to thrive, reacting quickly and effectively to market changes to grow the customer base and nurture the loyalty of existing customers.
The public cloud allows greater flexibility, agility, and scalability of systems, enabling telcos to move more quickly while scaling in line with changing market needs and organizational requirements. Part of the evaluation criteria when choosing public cloud solutions should be whether or not it provides the scalability and elasticity needed to suit the ever-evolving needs of the Telco industry. When it comes to KPIs to measure the ability of the cloud to boost business agility, top of the list needs to be how quickly the organization can adapt, so how quickly ideas become reality, monitoring the speed at which products and services can be brought to market to meet and even pre-empt customer demand.
Experimentation breeds innovation
Going hand-in-hand with this increased agility, and a crucial element for telcos striving to stay one step ahead is the public cloud’s ability to quickly and effectively trial new capabilities. With a public cloud infrastructure, telcos can experiment with their offerings, putting new products and services out to the market, scaling them up or down, and then pulling them back again if necessary, all without having to undergo costly and lengthy transformation projects to do so.
This ability to rapidly and cost-effectively determine what does and doesn’t resonate or work with customers represents a step-change for the Telco industry, underpinning a culture of faster, more effective, and less risky innovation to boost business growth. The public cloud makes the trialing of new capabilities more manageable, more affordable, and less of a burden, putting the foundations in place to establish an increasingly agile, innovative business. In terms of KPIs, being able to track time to value within a given timeframe is key, delivering tangible results through innovation and experimentation in super-fast time.
Aside from the much-discussed cost benefits, the public cloud is the foundation for enhanced business agility and innovation, the two vital components for telcos to ensure future business success. By harnessing the power of the public cloud, it’s possible to substantially grow a telco business, focussing not only on the standard KPIs that are part and parcel of any tech investment but also asking how the public cloud can deliver on organizational KPIs to help fulfill a business’s true potential.
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