HAMPTON, N.H. (April 20, 2018) — Combined Cloud as a Service revenue for telecom operators in Technology Business Research Inc.’s (TBR) 4Q17 Carrier Cloud Benchmark rose 15.7% year-to-year in 4Q17 due to strategic acquisitions and alliances, investments in new data centers, and portfolio expansion in growth segments such as SaaS and hybrid cloud. Cloud revenue growth is being limited, however, due to pricing pressures and growing demand for solutions from webscale cloud providers such as Amazon Web Services (AWS). Carriers are cognizant of these trends and are becoming more focused on supporting hybrid and multi-cloud environments by launching new orchestration platforms.

“All benchmarked companies sustained year-to-year Cloud as a Service revenue growth in 4Q17 as significant opportunity remains for carriers to target businesses seeking greater cost savings, scalability and efficiency by migrating traditional infrastructure and applications to the cloud,” said Steve Vachon, an analyst in TBR’s Telecom Practice. “Though cloud revenue growth is being limited by pricing pressures from webscale providers, carriers are relying on the value proposition and convenience offered by the bundling of their cloud solutions with other network offerings, such as SD-WAN, security and mobility services, to attract customers.”

Operators are revamping their go-to-market strategies to counter disruption from webscale providers such as AWS, Google and Microsoft. Competition will intensify over the next several years as webscales seek to play a larger role within the European and Asian cloud markets by investing in additional data centers in those regions. Amid demand for solutions from webscales in the cloud market, most carriers are offering access to these companies to complement their existing cloud portfolios and to support hybrid and multi-cloud environments. Carriers are also integrating webscale cloud platforms to enhance adjacent portfolio segments such as Internet of Things and unified communications.

TBR’s Telecom Practice provides semiannual analysis of Cloud as a Service revenue in key segment splits and regions for the top global carrier cloud operators in its Carrier Cloud Benchmark. Operators covered include Bharti Airtel, BT, CenturyLink, China Telecom, Deutsche Telekom, Korea Telecom, NTT, Orange, Singtel, Telefonica and Vodafone.

HAMPTON, N.H. (April 12, 2018) — According to TBR’s 1Q18 NFV/SDN Telecom Market Landscape, open-source groups will spur NFV and SDN adoption by establishing industry standards that foster interoperability among a broader range of solution providers. Operators are also facilitating NFV and SDN adoption by targeting new hires with relevant skill sets, retraining existing employees and launching internal startups to quickly improve their resource pools. Cost savings is the primary driver for accelerated NFV and SDN adoption, but these benefits will be realized gradually.

“The ability to reduce capex will initially be the largest cost benefit realized by adopters of NFV and SDN as software-mediated technologies enable operators to significantly reduce spend on proprietary hardware,” said TBR Telecom Senior Analyst Michael Soper. “Reducing opex will be a longer process as most operators will maintain both legacy and virtualized environments until they are ready to migrate fully to virtualized infrastructure.”

As operators pursue cost reduction through NFV and SDN, incumbent vendors face numerus threats to their business models and disruption on multiple technology fronts. Industry trends are moving against the vendor community, with incumbent vendors, particularly hardware-centric vendors, poised to struggle the most. Operators globally are focused on significantly reducing the cost of network operations and capex, underscored by a desire to disaggregate the black box and commoditize the hardware layer. White-box-based universal customer premises equipment is the leading application of industry-standard hardware thus far, but operators are targeting additional domains, including the core and edge network.

The NFV/SDN Telecom Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.