How to overcome the three common hurdles to telecom SaaS

With telecom software-as-a-service (#SaaS), communications service providers (#CSP) access the software they need to run their networks on demand as a subscription-based service. In doing so, they can realize faster time to value, improved financial performance, and greater business agility. Yet when we talk to many communications service providers, some are still expressing concerns about the SaaS model.

During my discussions with them, communications service providers are telling me that there are three common hurdles that can make it challenging for them to embrace telecom SaaS. In this article, I want to address those hurdles directly — and explain why communications service providers’ initial perceptions of telecom SaaS might not align with what it can offer.

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Hurdle 1: Total cost of ownership

Perhaps the biggest concern for finance/procurement is the perceived total cost of ownership (TCO) of telecom SaaS compared to the “perpetual licensing” model, which involves an upfront software license cost and indefinite usage rights.

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Many in the telecom industry understand the advantages of SaaS as a spread expense, with software costs distributed over time rather than upfront, and the SaaS vendor responsible for the infrastructure on which the software is running. Yet perpetual licensing is still perceived as a better investment over the long run: communications service providers buy the software just once while SaaS has ongoing, recurring costs. This view may not account for the many hidden operational costs of non-SaaS deployments.

With non-SaaS deployments, communications service providers must purchase or use their own physical or cloud infrastructure. That drives costs related to power, cooling and physical storage space. Dedicated in-house expertise is needed to maintain the hardware or cloud infrastructure, leading to significant staff training or hiring costs. There are also the costs associated with backup, disaster recovery, and security, and with ensuring compliance with regulatory requirements. Plus, the software itself needs to be manually patched, updated, and upgraded regularly. And for services such as data analytics, machine learning algorithms need to be retrained at least twice a year to keep them accurate, which can require weeks of effort from data scientists.

In comparison, SaaS vendors take on all those responsibilities for a single, all-inclusive subscription fee. As a result, the costs of telecom SaaS are highly predictable, making it easier to forecast future spending. This approach also spreads out investment risk over time while sharing that risk between the communications service providers and the SaaS vendor.

In addition to the cost savings, telecom SaaS can be a revenue generator. With the “pay as you grow” approach of telecom SaaS, communications service providers can quickly and easily scale up services to experiment with new ideas and get new offerings to market faster. Should those new offerings fail, they aren’t stuck with hardware that isn’t being used.

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Consider a communications service provider that plans to deploy a new security service. With a SaaS deployment, they can reduce the proof-of-concept time by weeks and its cost by nearly half compared to a non-SaaS deployment, which would require hardware and infrastructure investments. For implementation and integration, non-SaaS deployments can take about one year to complete because of the many site installations required; with SaaS, the service is ready to go in a fraction of the time, meaning communications service providers can start monetizing the service much earlier.

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Overall, the return on investment far exceeds the long-term software costs associated with telecom SaaS:

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Additionally, according to research by Analysys Mason, moving to #telecom #SaaS from an on-premises software model can reduce a communications service provider’s IT costs by 25% over five years. A quote from Analysys Mason’s research director, Justin van der Lande, summarizes it well: “In many scenarios, the long-term software costs associated with SaaS can be outweighed when communications service providers consider the significant savings that are possible in other areas, as well as reduced time to value for the creation of new services.”

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Hurdle 2: Control

Technology leaders are used to controlling every aspect of their operations, including what cloud provider they use and how their services are run. For many, SaaS can seem like a loss of control as they cede much of their responsibility to a SaaS vendor. On top of that, some believe moving to SaaS will lead to certain positions/roles no longer being needed in-house and could take away a competitive differentiator (if everybody is using the same SaaS platform, it’s difficult to stand apart in terms of quality of service).

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In fact, SaaS can be managed quite granularly from an operational and accounting standpoint. Dashboards and application programming interfaces (APIs) give communications service providers an exact view of usage, incidents, spending and more. The same can’t always be said for self-managed, non-SaaS software.

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Yes, SaaS may change certain roles within a communications service provider’s organization. But it also allows them to re-direct those resources toward more strategic business priorities. Rather than focusing on time-consuming tasks such as creating and managing their own technology components, staff can use that time to, for example, launch new value-added services and build application development ecosystems.

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Ultimately, moving to telecom SaaS can empower staff to focus on innovation. Application developers can embed network capabilities and SaaS components into their offerings through software development kits and APIs to create new kinds of apps and experiences. In turn, communications service providers can monetize the network beyond connectivity alone. Such ecosystems have incredible growth potential: Gartner projects that the digital application ecosystem market will grow by 30 percent each year, while the connectivity market will remain flat.

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Hurdle 3: Security

Compliance and security officers are often reluctant to embrace telecom SaaS due to fears that workloads and data are moving outside their controlled environments. The public cloud seems especially risky to them, raising concerns in four key areas:

·??????Data security — preventing access to data via breaches and leaks, and identifying and containing them when they occur

·??????Data privacy — ensuring compliance with privacy laws and regulations

·??????Data residency — controlling the physical location of data

·??????Data sovereignty — keeping data subject to the laws of a specific jurisdiction

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It is understandable that communications service providers would have such concerns given what is at stake. That said, SaaS deployments in the public cloud are secure. This is, in part, because leading cloud computing companies are under intense pressure to ensure their infrastructures are exceptionally resilient, available, and secure — their global brands depend on it. They invest more in security systems, technologies and capabilities than most communications service providers could match. They also enforce strict data isolation policies: engineers and all other personnel have zero access to customer data and only strictly controlled access to the hardware that data runs on. Within multi-tenant environments, SaaS providers’ systems can guarantee data isolation by design.

What’s more, SaaS vendors like 诺基亚 offer an additional layer of security on top of what the cloud providers bring. By working with so many communications service providers and enterprises around the world, they have accumulated extensive knowledge in areas like regulatory compliance and data encryption. Overlapping layers of defense-in-depth capabilities protect everything from the network perimeter to the data traveling across it. Traffic is not routed over the public internet, single-tenant architectures can be provided for workloads or communications service providers that require them, and strict approval processes limit the SaaS vendor’s ability to move data from one cloud environment to another. In the end, communications service providers have ultimate oversight and authority over their SaaS data.

As Philip Blanchar , Head of SaaS Delivery and SRE Operations for Nokia Cloud and Network Services has said: “It’s built into our process — the responsibility for getting approval for any data we move around for any reason.”

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It's time to start the telecom SaaS journey

Telecom SaaS represents a major mind shift in how communications service providers do business. But accessing network operations and management via SaaS isn’t as big of a leap as they might think. Many communications service providers likely already have a large SaaS presence, accessing mission-critical #IT platforms such as 微软 365 or Salesforce over the cloud. The future will only see more cloud-native solutions for telecom. For example, many #5G standalone core integrations happen on the public cloud, including Nokia’s and DISH Network ’s deployment of the first U.S. standalone 5G cloud network on Amazon Web Services (AWS) .?

As they look to address their concerns, communications service providers must understand that these are hurdles in the path to telecom SaaS, not roadblocks, and that vaulting over them does not require going “all in” today. It can be a gradual transition starting with areas like analytics, security, and monetization — but we strongly encourage them to start their journeys now and lay the foundation for better, more efficient, and more agile operations.

More information on Telecom SaaS and its benefits can be found on Nokia.com/SaaS