By Mark Bunn
With the costs of transitioning to 5G as high as they are, communications service providers (telcos) are under pressure to get the most value from their investments. The telecom software-as-a-service (SaaS) model can help them do just that, enabling the creation of cloud-based services that reduce operational expenses and foster innovation.
That was the focus of a recent TelecomTV session featuring Raghav Sahgal, president of Nokia’s cloud and network services business, and Dan Bieler, principal analyst for innovation, the future of work and digital strategy at Forrester Research. I’d like to share some insights from that session, which offered a clear picture of the value of telecom SaaS for “turbocharging” 5G innovation — and how telcos should move toward monetization.
How telecom SaaS supports 5G innovation
Bieler spoke of the rising demand in many sectors for new digital experiences, connected solutions and work-from-anywhere flexibility. Many telcos have already invested in 5G technology, which enables fast, reliable and secure connectivity ideal for delivering such experiences. That just leaves the monetization part.
For many communication service providers, telecom SaaS is the missing piece.
If you’re unfamiliar, telecom SaaS makes it possible for telcos to access the software they need to run their networks on demand, as a subscription. In doing so, they eliminate the significant upfront expenses of buying software licenses and the hardware to store and run applications in favor of predictable, ongoing operating expenses. They also save time and money otherwise spent maintaining and upgrading that software and on-premises hardware. This results in faster time-to-value and lower total cost of ownership compared to traditional approaches to network operations. It’s the same model used by SaaS applications telcos have long adopted for customer relationship management, enterprise resource planning and other IT functions. The difference is that telco-grade workloads have greater requirements, such as lower latency and higher availability to maintain service-level agreements.
By not requiring large upfront investments, telecom SaaS also makes it possible to develop and deliver new services to customers more rapidly. That accelerated path to innovation and monetization can make all the difference for telcos looking to recoup the costs of 5G. And by simplifying network management and operation, in-house staff are free to focus on developing new applications and services rather than just running the network.
As Sahgal noted in the TelecomTV session, the telecom SaaS model offers another, even more significant boon to innovation: it allows telcos to become part of a new digital ecosystem that brings together cloud providers, software companies, integrators, application developers, device manufacturers and more. Together, they will create new service types and service chains that every party can contribute to and benefit from.
Applying the concept of “network as code,” telcos can accelerate innovation by exposing parts of their networks to ecosystem partners and developers. Partners can then use those network capabilities to develop new digital and connected experiences. This gives telcos access to a huge pool of talent, making their potential for innovation less dependent on in-house skills and resources.
How telcos can take advantage
Telecom SaaS can empower telcos to quickly create and deploy new value-added services for their customers. But it takes more than just embracing the model to realize the potential of telecom SaaS. In particular, Bieler and Sahgal cited three significant operational and cultural shifts necessary to see the full benefits of telecom SaaS as an accelerator of 5G innovation.
- Transform operations: Only by disaggregating software from hardware through cloud-native transformation can telcos accelerate the development, testing and deployment of new services. Telcos also must ensure their networks can deliver the availability and performance demanded by their workloads.
- Adopt a service mindset: The traditional product mindset emphasizes quality and price. Success in this new era will require changing gears and approaching R&D, marketing and sales with a service mindset, focusing on delivering value, achieving business outcomes and creating experiences.
- Embrace partnership: To maximize the benefits of telecom SaaS for innovation, telcos will need to engage differently to collaborate more closely with partners and application/software developers — and possibly other telcos. Sahgal likened this to the Metaverse and Web 3.0 experiences: no one company owns the Metaverse; they just own the costs, scalability, security, speed and other elements of their particular applications. In the same way, making the most of telecom SaaS as a concept will require a collaborative, open environment where every contributor benefits.
Starting the journey to telecom SaaS
Telecom SaaS can help telcos fast-track 5G innovation and create new opportunities for monetization. That’s valuable for telcos looking to make up the costs of their 5G investments. But the capabilities of telecom SaaS, along with the operational and cultural shifts required to make the most of them, will have utility far into the future.
While some telcos may be wary of telecom SaaS, it’s the key to unlocking the agility, speed and scalability required to compete in the 5G era and beyond. The most important thing is to start the journey, Sahgal said, recommending that telcos migrate certain, non-essential applications to gain confidence before moving on to more critical workloads.