Note to CSPs: Don't reinvent the wheel

by Keith Willetts, Chairman and CEO, TM Forum

Keith Willetts, Chairman and CEO, TM ForumIt's definitely not the best of times to be a communications service provider (CSP). With stiff competition coming from traditional rivals and upstart players, the immediate need to slash operating costs or risk financial catastrophe coupled with having to invest in more bandwidth and the strong requirement to come up with new lines of business to hang onto existing customers and make inroads with new ones, providers are finding themselves stretched in every possible direction almost to the breaking point.

But the situation doesn't have to be this dire. Sure, bandwidth alone may not be enough to attract and retain customers, but it's what will make a whole slew of interesting services possible. In a broadband world, 3DTV goes beyond what you'd see in a science-fiction movie and moves into your living room. IPTV, which has quietly become reasonably successful for some operators, becomes more commonplace. And interesting location-based services that utilize smartphone cameras to pinpoint where someone is and sends them information about where they are have started to make inroads with end users.

As interesting as these services sound, I don't expect any of them to actually drive a lot of new revenue for providers. But what they will do is appease current customers and possibly add some incremental business.

Plug and play
One hallmark of a lot of today's new communications services is they are, for the most part, no longer purely the domain of the CSP, meaning the provider is not buying, installing, activating, charging and billing for everything anymore. Rather, these services will rely on partnerships with other value chain players to ensure that both content and money are flowing without interruption.

TM Forum has been on this bandwagon for some time with our work with service delivery platform and our Value Chains Initiative. Now we're bringing those elements and more together to create a managing new services project whose aim is to help providers and their trading partners with standards and other solutions.

This whole area of new services isn't really all that far removed from cloud computing, which is another area we've been watching very closely and slowly making our own mark on. It's not hard to imagine new communications services as a sort of amalgamation of capabilities and features from several different places that come together to create a single product for the end user. And the cloud is a great place for a lot of these piece parts to exist.

Essentially it's outsourcing, where a provider might decide that another company does a better job at running the network or handling billing operations and works with them to bring that capability into its service offerings. Rather than reinvent the wheel or get into an area where the provider may have limited or no expertise, they instead rely on others to fill in those gaps.

But as we know with the Mobile Virtual Network Operator (MVNO) business model, which for the most part failed spectacularly, you need to be in a situation where there's actually a margin for you to make money. So we need big economies of scale for the cloud model to really work. And I think we're there.

We see providers with huge computing power like Amazon and Google finding new lines of business by renting some of these processing capabilities to other companies, and we see software makers like finding success with not only its flagship business application that resides in the cloud but also giving its customers--through a cloud-based environment--to develop their own applications.

This idea of taking "pluggable" pieces that you can use to create new things simply and easily requires some level of standardization. With our Managing Cloud Services initiative and Enterprise Cloud Buyers Council (ECBC), I think TM Forum is uniquely positioned to overcome barriers to adoption and help spur the growth of cloud services through education, standards and an ecosystem that brings buyers and sellers together.

To learn more about cloud services directly from major providers such as BT, Telecom Italia and AT&T and leading enterprise players including Deutsche Bank, Commonwealth Bank of Australia,, Jamcracker and more, plan to attend TM Forum's flagship event in Nice, France in May.

At Management World 2010, you'll hear from executives from these companies and many more discussing the benefits of a cloud environment and what needs to be done to deliver on the promise of the cloud. You'll also see real-world demonstrations involving cloud concepts and get to speak directly to peers who are going down the cloud path.

There's no better place to learn about the cloud and how to take advantage of new services and opportunities in the new world of ubiquitous bandwidth and unlimited potential.

Keith Willetts, Chairman and CEO, TM Forum, is a monthly FierceTelecom columnist.