From CSP to DSP, via the Cloud

From CSP to DSP, via the Cloud
Until now, Communications Services Providers have been somewhat reluctant to adopt cloud services, despite the obvious advantages they bring to the table. When these businesses are already offering cloud-based products and services, shouldn't cloud-based support systems be a natural addition? Dominic Smith explores...

Communications Services Providers (CSPs) have always had a stop-start relationship with the cloud. While they widely seem to acknowledge that their own presence is fundamental to the cloud, they haven't been as forthcoming in adopting the cloud when it comes to the operation of their own businesses. CSPs still seem to operate within a tried-and-tested legacy business model with a primary focus on infrastructure, resilience and profitability, often at the expense of innovation.

A recent TM Forum study adds credence to the fact that adoption of cloud Business Support Systems (BSS) among CSP’s is still very patchy, with close to 75% of the companies surveyed having moved only around 10% of their BSS to the cloud. Despite the obvious benefits of scalability, consolidation, agility, and OPEX / CAPEX savings, only 15% of the companies have committed to moving their entire BSS to the cloud by 2020.

Contrast that with the explosion of Digital Services Providers (DSPs) who play the game very differently. Just like other high-value technology startups, their immediate focus is on building the best service and growing their customer base, rather than improving their bottom lines at this stage. In order to do this effectively, they actively build their support systems in the cloud. In fact, DSPs are native cloud businesses, which helps them to scale according to the needs of their business and gives them the flexibility to roll out new offers quickly and easily. It is this agility gives them a head start over their CSP counterparts. 

Are CSPs ready for change?

In order to be truly successful in the current digital landscape, CSPs must shed the baggage of traditional processes and systems, and embrace digital transformation. While adopting cloud services may not come naturally to CSPs, we are now seeing signs of a willingness to experiment on their end. Smaller CSPs are doing it for speed and innovation, while larger CSPs are adopting comprehensive cloud programmes for a complete transformation of business models, support systems and culture.

However, in our experience of delivering cloud billing solutions, different CSPs approach cloud programmes in their own unique way. Larger CSPs tend to be more focused towards functionally rich components, robust architecture and hybrid or private cloud deliveries. Smaller CSPs, on the other hand, want more end-to-end process support and are comfortable with public cloud deployments.

Don't be a victim of ‘cloudwashing’

Nevertheless, CSPs have to contend with the proliferation of vendors marketing ‘cloud-based’ solutions. However, this minefield of cloud offerings can range from cloud-hosted and virtualised systems, to full SaaS applications and managed services. So CSPs must look beyond the label, and check how the cloud being offered matches up to their own cloud expectations, which may include:
  • Cloud commercial model – all software, hardware, hosting and support is included in a single monthly or annual service fee, with clear service-based SLAs.
  • Elasticity – the ability to scale up (and down) on demand and only pay for what you use.
  • Open integration – cloud systems should come with open interfaces, usually based on the RESTful web services architecture. This means that integration can be done by anyone, not just the vendor or a systems integrator.
  • Configuration not customisation – each customer can configure their own specific business rules and processes, but there’s no software customisation; everyone uses exactly the same core software version.
  • Regular software updates – new versions of the application are rolled out automatically to all customers, ensuring everyone benefits from the product roadmap.
  • Rapid implementation – this should be measured in days or weeks, not months and years.
  • Native web-based application – it can be accessed on any device / browser, without needing any additional software installation.
  • Free trial – get hands on experience of the cloud application and run your own proof of concept before any contractual commitment.

Carrier-grade service offerings

The cloud benefits described above will all contribute to improved CSP agility. Even so, it is vital that cloud business support systems also provide the much-needed functional support for the services being offered. The onset of the subscription revolution has certainly increased the number of subscription billers in the market, but flexible and scalable usage-based charging still remains a far cry amongst these vendors.

However, with the rise of the Internet of Things (IoT), usage-based charging will become a must-have for any CSP looking to capitalise on new market opportunities and establish their foothold in the IoT value chain. And to improve agility and margins, cloud-hosted solutions and managed services will have to give way to the more powerful Software-as-a-Service delivery model.

Digital Transformation

IoT may mark the beginnings of a fourth industrial revolution, but the true evolution from CSP to DSP can only happen with the adoption of cloud BSS solutions. It is already at work transforming the vendor landscape by removing the dependency on systems integrators and putting the CSPs/DSPs back in charge. Furthermore, open standards-based interfaces such as the TM Forum's Open APIs are further fostering newer business relationships and opening doors to other industry verticals.

At Cerillion, we foresee that the majority of BSS solutions will be deployed in the cloud in the next 2-3 years. Most CSPs will have to approach this in a phased manner – either by implementing a new cloud stack for newer service offerings or migrating functionality in a modular fashion on to a layered BSS architecture. However, the crucial lesson to keep in mind is that cloud is just the means to an end, and not the end itself.
Interested in exploring the subject further? Download the TM Forum's research report Cloud BSS: The migration begins.

Cerillion will be attending TM Forum Live! 2017, the flagship digital transformation event for CSPs and Enterprises, to be held from 15th-18th May in Nice, France. Book a meeting now to see how Cerillion can assist in your digital journey.