Carriers are fostering deeper partnerships with webscales to support growing enterprise demand for hybrid and multi-cloud environments

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.