The transition to 5G comes with high costs, putting telcos, or communications service providers (CSPs), under massive pressure to receive the highest return on investment (ROI) from 5G. One way for CSPs to gain significant value from their investments and make innovative 5G services more available to enterprises is the telecom software-as-a-service (SaaS) model. Telecom SaaS enables the formation of cloud-based services, which can lower operational expenses (OpEx) and promote innovation.
Leveraging telecom SaaS for 5G innovation
Many sectors today are rapidly and increasingly demanding new digital experiences/services, connected solutions, and work-from-anywhere flexibility. As a result, a majority of telcos have already invested (or begun investing) in 5G technology. This is because 5G promises fast, reliable, and secure connectivity necessary for delivering such experiences. This leaves just one part for CSPs: monetization; and the missing piece is telecom SaaS.
Telecom SaaS allows CSPs to access the necessary software to run networks on demand and as a subscription. That way, they eliminate the heavy upfront costs of purchasing software licenses and the hardware to keep and run applications in favor of predictable, ongoing OPEX. Telcos also save time and money that would have been spent on maintaining and upgrading software and on-premises hardware.
In doing so, they can gain faster time-to-value, and lower total cost of ownership (TCO) compared to traditional network operations approaches. This model is similarly used by SaaS applications CSPs have long adopted for customer relationship management (CRM), enterprise resource planning (ERP), and other IT functions. What differs is that telco-grade workloads have greater requirements, such as lower latency and higher availability to maintain service-level agreements (SLAs).
Further, telecom SaaS removes the need for large upfront investments, making it possible to rapidly create and deliver new services to customers. Such an accelerated path to innovation and monetization makes all the difference for telcos looking to recover 5G costs. Simplifying network management and operation also frees in-house staff to focus on developing new applications and services instead of just running the network.
Moreover, another more significant boon to innovation telecom SaaS offers telcos is the ability to become part of a new digital ecosystem that joins cloud providers, software companies, integrators, app developers, device manufacturers, etc. Together, it enables the creation of new service types and service chains that every party can contribute to and benefit from.
CSPs can also take it a step forward and apply the concept of “network as code” to advance innovation by exposing portions of their networks to ecosystem partners and developers. In doing so, partners can leverage the network capabilities to form new digital and connected experiences. As a result, telcos can gain access to a vaster talent pool and reduce the dependency of their potential for innovation on in-house skills and resources.
Taking advantage of telecom SaaS
The ability to develop and deploy new value-added services for customers is a top-line priority for telcos, and telecom SaaS empowers telcos to deliver such services faster. But fully realizing the potential of telecom SaaS takes more than just embracing the model. There are three significant operational and cultural shifts that should be implemented to reap the full benefits of telecom SaaS as an accelerator of 5G innovation.
First, CSPs need to transform operations by disaggregating software from hardware via cloud-native transformation. That way, they can expedite the development, testing, and deployment of new services, as well as ensure their networks can deliver the availability and performance demanded by their workloads.
Next, telcos need to adopt a service mindset. In this case, traditional product mindsets emphasize quality and price. But to achieve success in this new era, CSPs need to shift and adopt a service mindset when it comes to their research and development (R&D), marketing, and sales approaches so that they are focusing on delivering value, achieving business outcomes, and creating experiences.
Lastly, embracing partnerships will be critical to maximizing the benefits of telecom SaaS for innovation. In particular, closer collaboration between telcos and partners, application/software developers, and possibly, other CSPs. Imagine metaverse and Web 3.0 experiences, for example. There is no single company that owns the metaverse. Rather, they own the costs, scalability, security, speed, and other elements of their particular applications. Similarly, capitalizing on telecom SaaS as a concept will require a collaborative, open environment where every contributor benefits.
Beginning the telecom SaaS journey
Telecom SaaS will become a no-brainer when it comes to empowering telcos to accelerate 5G innovation and develop new monetization opportunities. It will bring inherent value for telcos intending to recoup their 5G investment costs. But the capabilities of telecom SaaS will not stop there. By combining the operational and cultural shifts required to fully utilize telecom SaaS, telcos will continue to yield benefits far into the future.
As it is when new models/concepts are introduced to the mix, there will be some parties that are wary of telecom SaaS. However, it is the key to unlocking the agility, speed, and scalability needed to compete in the 5G era and beyond. Hence, the most critical part is to begin the journey to telecom SaaS. To achieve this, telcos can take the first step by migrating certain non-essential applications toward the model and gain confidence before moving on to shifting more critical workloads.
Mark Bunn is Senior Vice President, Cloud and Network Services at Nokia.