Creating Value through Cloud Computing

by Biswajit Deva Sharma, Product Architect, CLM

CRM on cloud is now a well established concept in the market, and almost every industry is looking to take the advantage of the benefits of cloud computing. However the burning question CIOs of Telecom companies ask is, how relevant is cloud computing for the Telecom industry? Or More specifically how relevant is Cloud computing for their company?

The following parameters primarily drive the decision of IT spending and technology choices for Telecom Operators in the current market scenario.

User Base:
Extremely cost sensitive markets are also forcing the Telecom operators to be extremely innovative in their market offerings. The challenge today is to offer high value with low investments to the customers. The growing competition is further pushing the Telecom Operators to be effective and efficient in their operations.

Average revenue per user (ARPU):
The Telecom industry is going through one of the toughest times in terms of the market dynamics. Recently Bharti Airtel, India’s lar¬gest telecom services com¬pany by revenue and subs¬cribers announced a 33 per cent fall in net profit to Rs 60.47 millions for the year ended March 31, 2011, from Rs 8,9.69 millions in FY10, th¬o¬ugh revenue grew 42 per cent to Rs 59.47 millions from Rs 41.85 millions. One strong reason, Bharti Airtel’s average revenue per user (ARPU) in India continued to fall to Rs 194 in the fourth quarter from Rs 198 ($4.3) in the third quarter.
The above story of Airtel pretty much represents the global picture. The narrowing revenue margin is increasingly prevalent trend of the Telecom industry. Additionally, the competition is forcing the telecom operators to offer more value at a lower cost, thereby impacting the revenue per user.

IT Spending:
Decreasing revenue margins is forcing the Telecom operators to control the Operational cost. The growing demand of the customers for better services at limited cost poses a challenge for Telecom operators to deliver value with limited investment. The leading research reports points out that the IT Spending in the telecom domain has in fact slashed down in 2009-2010. Furthermore, prediction is that the IT Spending will only improve marginally in the major markets until 2013.

Telecom Industry Technology Demands:
The Changing needs of the Telecom operators are also pushing the Software vendors to deliver Customer Management solutions that enable Telecom operators to handle the market constraints. The increasing pressure to control the Operating Cost, point towards moving from a CapEx to an OpEx mode of IT investment. Cloud Computing offers exactly the solution for the Telecom Operators.

The market scenario poses following important challenges for software product design:

• Flexible Operating Cost – Depending on the demands of the markets, the Telecom operators must be able to vary their cost. Hence, the operating cost must comprise primarily of Variable cost, and very minimal fixed cost.
• Customizability – Varying customer need means, Telecom operators must be able to customize their solutions to cater to their business needs.
• Lower Adoption/Exit Time – Customers need highly agile systems, which can be adapted to the business needs with efficacy and provide an option for a smooth exit when needed.
  

Tecnotree leverages on the above needs and is currently conceptualizing to offer it’s solutions through two key delivery models:

• SaaS – Software as a Service. This consists of standard functionalities with standardized business processes specific to Telecom domain, which allows Tecnotree to address standard business needs of the customers.
• PaaS – Platform as a Service. This is to enable the customers and independent software operators to innovate using the Tecnotree application platform. Customers can leverage on the platform to create customized solutions to meet specific business needs.
  

Tecnotree is on a quest to serve its customers, by changing the marketplace with innovations that really matter.

In the coming months, we will publish more blog posts on topics related to technology, delivery & deployment platforms. We believe these are really relevant when it comes to delivering value in the true business sense.

Stay tuned!