Report: Service providers need to embrace digital business touch points

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Research by Gartner says that service providers should focus on enabling digital touch points for their customers. (Pixabay)

When it comes to serving customers, service providers need to expand their business offerings beyond edge compute technologies, according to research by Gartner.

According to research by Gartner, the proliferation of digital business services is moving infrastructure services beyond the cloud and edge to customers' digital touch points. Digital touch points could include a session with an internet chatbot, booking a flight online or wearing a connected fitness tracker.

“Creating business moments at digital touch points is the new scalable way of engaging with customers,” said Rene Buest, senior research director at Gartner, in a statement. “Infrastructure service providers that fail to embrace this development will lack a presence at digital touch points and struggle to interact closely with customers.”

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Gartner forecasts that by 2021, 65% of the global infrastructure service providers will generate 55% of their revenue through edge-related services that help customers create business moments at digital touch points.

The internet of things, virtual reality and augmented reality are pushing more computing resources closer to the edge in order to support digital touch points, according to Gartner. Business organizations and service providers are focusing on edge compute in order to reduce latency and speed up the delivery of services and applications

According to a Gartner survey, 27% of the organizations are already planning to leverage edge computing as part of their infrastructure strategy. By the end of 2019, 70% of the survey respondents said they expect edge computing to become relevant to their infrastructure plan.

While cloud platforms provide the foundation for agile infrastructures for digital business needs, digital touch points have different requirements due to several factors such as real-time decision-making and interaction requirements, the growth in data being produced, the requirements for autonomy, and the demand for security and privacy. The end result is that compute storage and services need to be closer to the users at the edge while provisioning them from cloud providers such as Amazon Web Services and Microsoft Azure.

By 2022, Gartner estimates that half of the larger organizations will be integrating edge-computing principles into their projects. That same year, $2.5 million will be spent every minute in the internet of things sector with one million new IoT devices being sold every hour.

"This enormous growth will need to be backed by reliable end-to-end infrastructure environments that support proximity, and that ensure low latency, high bandwidth, autonomy and privacy,” said Buest. “The cloud is no longer enough. Infrastructure service providers must exploit this growth by extending services beyond the edge in support of digital touch points.”

RELATED: CSPs bullish on digital transformations in theory but lacking in execution

In order to enable those touch points, service providers need to embark on their own digital transformations. While communications service providers (CSPs) realize the importance of implementing digital transformation strategies via partner ecosystems, their follow-through has largely been lacking. According to a study by BearingPoint, 69% of the respondents in a survey rated digital transformation as their top priority, but just 26% were actually engaged in implementing the new business models and digital offerings.

Furthermore, the survey found that 27% of the communications service providers surveyed were ready to embark on their digital transformation journeys while 14% were just getting started. On the low end, 2% hadn't even considered new business model innovations and the development of new digital offerings.

Gartner identified the following areas where service providers could enable touch-point based services:

  • Infrastructure management enables an all-inclusive infrastructure platform approach from the core to the cloud to the edge, with the goal of supporting clients’ digital touch points. It also includes the requirement for controlling, categorizing and deploying the necessary infrastructure, applications, services and connectivity in a software-defined style.
  • Infrastructure integration ensures API-driven integration of infrastructure services with on-premises infrastructure, edge devices, cloud services, middleware platforms, data, processes, gateways and mobile devices.
  • Infrastructure security delivers the necessary services and tools to ensure security management of infrastructure, platforms, devices, applications, data, processes and users.
  • Data management and governance provides full life cycle management of generated and collected data at the edge and the digital touch points. A sustained chain from the core to the cloud to the edge and to a digital touch point needs to be implemented to ensure the data is managed and compliant at each stage.