SaaS: A paradigm shift for CSPs (Reader Forum)
“Anything as a service” is by no means a new idea. From Microsoft Office to Netflix to Uber, consumers are happy to access software, entertainment, transportation and more on demand rather than owning those things outright.
To seize the 5G opportunity and achieve faster time to value, communications service providers (CSPs) will need to adopt that same mindset for analytics, security, network management and other functions at the heart of their operations. The time for the telecom industry to embrace software as a service (Saas) is now.
What is Telco SaaS?
People use Uber because it removes the burden of having to buy, maintain and upgrade their own vehicles. They simply summon a car whenever they need to go somewhere, paying only for the time they spend in it.
Telco SaaS does the same for software ownership, providing CSPs with on-demand access to the applications they need to run their businesses and networks. Cloud-based software is purchased from a SaaS vendor on a monthly or annual subscription basis, then delivered to CSPs over the internet. Telco SaaS is also:
- Outcomes-oriented: Value is measured in terms of business outcomes and benefits provided to CSPs and their customers.
- Cloud-native: Adhering to cloud-native principles delivers a highly reliable, scalable service with a lower total cost of ownership (TCO).
- Fully digitalized and automated: Mature SaaS applications can be provisioned and managed largely through automation software, eliminating tedious manual procedures.
It’s important to note SaaS is not the same thing as the cloud. Cloud refers to infrastructure: Servers hosting software and databases that can be accessed remotely by licensed users around the world. Saas solutions live in the cloud environments, but SaaS is about the applications, not the infrastructure. And while all SaaS is cloud software, not all cloud software uses the SaaS subscription model.
Why is telco SaaS needed now?
CSPs have historically run their operations and business support software on complex customized, on-premises infrastructure. That model has worked well in the past, but it can’t keep up with rapidly evolving customer needs and expectations, which demand adaptability, scalability and ongoing innovation. To seize dynamic new 5G market opportunities across a range of industry verticals, CSPs need faster time to value and lower TCO for the software their businesses and networks depend on. Otherwise, disruptive new players in the market will surge ahead.
Another way Telco SaaS changes the game is by speeding up software procurement, installation and configuration for faster adoption and use of service (the whole process can be done in hours or even minutes).
Because the SaaS vendor handles all software maintenance and upgrades, CSPs know they are always running the latest version and their internal IT teams are free to focus on more strategic priorities. Pay-as-you-go and pay-as-you-grow subscriptions eliminate upfront capital costs — and help CSPs reduce spending on IT activities of negligible strategic value, such as customizing OSS/BSS software or managing their own clouds. And by being able to scale SaaS usage up or down as needed, CSPs can easily trial new services and evaluate new markets before committing to full-scale rollouts.
A major paradigm shift for the telecoms industry
For most CSPs, the shift to a SaaS model will be a gradual, multi-year journey. It’s also not an “all-or-nothing” proposition; CSPs can (and should) start by moving a select few low-risk, non-core functions to SaaS, such as analytics, security or and the customer experience layer of the communications stack. Once initial workflows and trust are established, more can follow later, including monetization and 5G-specific network functions such as policy charging.
The key is for CSPs to start this journey now rather than wait for newcomers to pass them by. With SaaS, the upfront risk is limited and CSPs should take advantage of this model to seize the 5G opportunity in front of them.