More customers are integrating solutions from multiple providers
Total Cloud as a Service revenue from the telecom market rose an estimated 13.5% year-to-year to $6.5 billion in 2017, and opportunity remains for carriers to target businesses seeking greater cost savings, scalability and efficiency by migrating traditional infrastructure and applications to the cloud. However, TBR projects revenue growth will decelerate to an 8.8% CAGR through 2022 as webscale providers become more dominant in the market. Though carriers have launched new native public cloud platforms over the past several years, such as Orange’s Flexible Engine and Deutsche Telekom’s (DT) Open Telekom Cloud, these offerings have not been able to overshadow demand for webscale solutions from Amazon Web Services (AWS), Microsoft and Google that are becoming staple services for businesses.
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 the 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 cloud and multicloud environments. Carriers are also integrating webscale cloud platforms to enhance adjacent portfolio segments such as IoT and unified communications as well as augment network platforms including SD-WAN and IP-VPN.
The overall cloud “as a Service” market is maturing, particularly in North America, where engagements are no longer vendor-hosted or on-premises only. As cloud adoption becomes more widespread, hybrid IT environments are the new normal, blending multiple cloud and traditional IT environments and services within each engagement to better integrate and utilize solutions. Providing access to a diverse range of solutions from multiple vendors is essential for carrier cloud providers to support customers’ hybrid environments as they become more complex. Multivendor hybrid environments involve complex integration logistics, as well as multiple security protocols, causing customers to favor cloud providers with broad portfolios.