Insights From Day 2 at Telco Cloud London
In our overview of day one at London Telco Cloud, we checked out the competitive dilemma that Telcos face, with shrinking margins on core services and with stiff competition in newer converged services and cloud. the solution seemed to be the event of converged services and cloud-based apps that would be delivered easily and effectively via marketplaces to the SMB sector where telcos retain a critical footprint.
On day two specialist consulting company mm1 delivered a reality check: explaining why SMBs don’t (yet) buy cloud or IT from telcos. The key points that they made were:
Telcos aren't the natural partner for SMBs to speak about the cloud. Mid-size companies usually produce other partners for IT
If mid-size companies ask telcos about the cloud, currently the telco sales forces aren’t ready to sell it alright
Customer understanding is vital – telcos are familiar with transaction sales at scale, but cloud must be a consultative sale which smaller IT service companies are more won't to delivering
While the cloud is often simple to provision, the customer lifecycle remains complex (inc. design, implementation, migration, training, and in-life support)
SMBs are trying to find worry-free management throughout this lifecycle complexity and see their local IT suppliers because of the most trusted partners for this – not their telco.
The conclusion from mm1’s pitch was that telcos cannot win with stand-alone cloud offerings, and instead got to address SMBs with credible, converged telco-cloud offerings instead. These are a mixture of not only classic telco services with fixed and mobile access, but also cloud and professional services.
Currently, however, while most telcos offer “fixed” and “mobile” and “cloud” services for SMB customers, few provide them as truly converged offerings. this may require a fundamental business and operating model transformation by most telcos, says mm1, but don’t worry, they assert they’re here to assist.
Another fascinating keynote on day 2 of Telco Cloud was delivered by Goran Car, Director of the Professional Services and Solutions Strategic Business Unit in Combis and CTO ComCloud, one among the leading system integrators within the Adriatic region. He introduced us to the Flynn Effect – coined by James Flynn who in his TED 2013 paper checked out Why our IQ levels are on the average above our grandparents. Already panicked by these talented millennials, I wanted to understand if there was any hope of competing with them. Are successive generations really brighter and more talented than those before them?
As Goran explained: in 1865 you’d be lucky to shoot a target from distance once a moment, in 1898 you’d expect to be ready to do so several times a moment, and in 1918 you’d are ready to hit a target 50 or more times. This wasn’t right down to any inherent evolutionary advances. Instead, it had been right down to the move from the musket to the repeating rifle than to the machine gun. The ever-improving capability of the technology at our disposal is enhancing our potential, as is our familiarity with it and our ability to urge the foremost from it. Cloud is simply such a technological evolution and therefore the more that we harness it, the more this may cause further innovations.
The point was endorsed by David Andreasson, head of product and technology at Teliasonera when in his keynote he predicted that “the winner during this business is that the one who creates the foremost compelling offering supported services that others have innovated.”
So what's clear to us is this:
We don’t need to worry about all those pesky and highly-talented millennials as they're going to innovate and make new services that we will then capitalize on.
We do get to incorporate these services into compelling, credible, converged telco-cloud offerings as mm1 outlined.
We can deliver them to our hungry SMB clients easily and effectively via marketplaces.
At least I feel that this was what I learned from Telco Cloud, or even the hospitality needs to be an excessive amount of.
Insights from Day 1 at Telco Cloud London
At Telco Cloud the talk turns to future revenue streams, up-selling opportunities, apps, and marketplaces – it all sounds cloudy to me!
As the game of cloud poker intensifies, Telco execs converged on London in the week for Telco Cloud – one among the Informa Cloud World Series events information technology education. it had been refreshing to ascertain such an honest end up with an outsized number of high caliber delegates and a packed auditorium with room only sometimes. Maintaining their best poker faces, it had been hard to inform if the speakers and therefore the throng of delegates were more concerned by their cloud rivals, more resigned to the competitive dynamics, or more looking forward to the longer term.
Telcos face a gradual erosion of traditional income streams as telephony and messaging are commoditized and because the digitization and move to NFV and SDN reshape the competitive landscape. They accept that they don’t hold all the cards. Amazon has stolen an unassailable lead publicly cloud, Apple and Android have captured the mobile app space, Microsoft owns the foremost critical business app suite and there's no way that the telcos can take any of those players head on even in markets where they still have a dominant position because of the domestic carrier. The telcos do have one trump through – their direct relationship with companies and most significantly with SMBs – the segment of the market that the large tech players find most hard to succeed in.
Typically SMBs have already got an account with a telco that has a billing relationship for an on-going service. This provides a singular opportunity for the telcos to up-sell other services, as long as they will sell, deliver, and maintain them well. Easy – yes? – well maybe not!
This isn’t quite as simple because it sounds because the sales teams at most telcos got to be retrained to sell apps and digital services, the telcos got to provide a beautiful set of apps which will be delivered quickly, easily, and efficiently, and that they got to make it all work well together over time so as to retain what's inappropriately often termed client ownership – actually nobody actually owns the client!
Most telcos understand that some sort of app store or marketplace found out is required and among the various speakers at Telco Cloud were BCSG and AppDirect, both of whom spoke eloquently about how they will enable telcos to deliver a group of apps to their clients effectively. this is often where it starts to urge complicated though.
The options for telcos eager to sell added-value services or apps are:
You build your own marketplace from the bottom up – an unnecessarily expensive option that few would consider lately.
You use a Cloud Service Broker to supply a platform on which to create your own marketplace – even IBM used a CSB when it builds BlueMix on AppDirect.
You post all of your services on a vendor marketplace, but risk them being lost among the throng as you get with busy hubs like Apple’s App Store.
You find or found an independent marketplace for your local market and hope that you simply are often a key local provider of services within this ecosystem.
Whether you’re an enormous fish during a small pond, a smaller looking fish during a large lake, or the sole fish within the puddle, it's not a case of “build an app and that they will come.” With the proliferation of apps and marketplaces, any pull is greatly dissipated and you would like an efficient marketing campaign behind your apps to push them to the target market segment.
Amazon in fact has its own marketplace. And it’s a speaker at Telco Cloud boasted that over 1,000,000 companies are already using services from AWS and its partners. Typically though this may appeal to the more tech-savvy corporates or the born on the cloud start-ups, rather than the less tech savvy SMBs.
The telcos can create their own marketplace to serve the SMBs in their local markets, but many of the SMBs will have Office365 (or maybe the choice from Google) high on their shopping list and are likely to be using cloud services like Gmail or Dropbox already. Telcos eager to own the ‘client relationship’ and with it, the annuity revenue and future up-selling opportunities, are going to be concerned that opening the door to Microsoft, Google, or other cloud players and including them in their marketplace will risk dissipating much of the worth and wallet share to those potential rivals or maybe risk losing the clients to them entirely.
And while telcos are not got to attend the trouble and expense of building their own marketplace from scratch – cloud service brokers like AppDirect can do most of the work and repair integration for them – there are local MSPs in every market which will also use an equivalent cloud service brokers to make rival local marketplaces. While the telco could also be local on a national scale, these MSPs sell themselves because the ultra-local trusted supplier at a much more localized level either to a little region, small market segment, or small vertical niche.
It all comes back however to the telcos’ trump – their existing connectivity and billing relationship. SMBs want to possess simple – quick access to apps that are easy to use and already integrated, which are often provided under one account with one bill. If the telcos can get this proposition right then potentially they need a really bright future. The SMB sector is vast and hungry for these services! Is It Getting Cloudy in Banking?
Following on from the Cloud Banking Europe event a couple of weeks back, we thought a quick article was needed to urge the message to a wider audience. the most theme of the seminar was Regulation and Compliance, getting to explain cloud within the industry. However, it had been apparent that within the broad group of attendees there was a scarcity of understanding of IT governance rules and regulations within the industry.
I personally thought that a number of the discussions were out of date thanks to the fast-paced cloud environments changing on a monthly basis. the 2 main regulators within the financial industry are the PRA and therefore the FCA.
The Prudential Regulation Authority (PRA) may be a part of the Bank of England and ‘is liable for the prudential regulation and supervision of banks, building societies, credit unions, insurers, and major investment firms. It sets standards and supervises financial institutions at the extent of the individual firm.’
The Financial Conduct Authority (FCA), formally the FSA, maybe a financial regulatory body within the UK, but operates independently of the UK government, and is financed by charging fees to members of the financial services industry. cloud technology The FCA maintains the integrity of the UK’s financial markets and focuses on the regulation of conduct by both retail and wholesale financial services firms, with a consumer focus.
Over the 2 days, a varied selection of speakers was present, alongside vendor exhibitions within the main foyer. it had been interesting to ascertain and ask vendors that are working within the financial services space and hear their view on what drives banking tech to the cloud and also what's hindering adoption. the overall consensus is threefold.
These points are extremely important in any industry moving to a centralized outsourced model, however even more so for the financial industry. So, let's discuss it all in additional depth.
Speed (low latency)
Whilst this is often extremely important within any market sector adopting cloud principles, within the financial sectors this is often critical. With the complex trading systems and principles within each asset class of the banking world (commodities, futures, forex, etc that are in no time flowing), a couple of milliseconds time delay is disastrous. For other asset classes like fund management, this point delay isn't so critical. Fast links to exchanges are key for fast order routing and this is often the mainstay for any financial order routing connectivity. However, this does depend upon how and therefore the frequency of trading for any given firm.
Part of the regulations that authorized firms got to suits is Disaster Recovery. As a part of FCA adherence, this is often the main point and will be taken very seriously. Hosting with a cloud provider doesn't automatically offer you Disaster Recovery, you've got simply moved your infrastructure to somebody else and now your technology abides by their own procedures and policies. this is often a misconception that a lot of firms fall foul of and unless you state what you would like with regard to Disaster Recovery, you'll be unpleasantly surprised! Although the FCA guidelines are stated very clearly during a very large handbook, the particular policies are very difficult to know, unless you're from an IT and financial business background, which is extremely rare.
Again, this is often paramount for any firm moving to a cloud-centralized infrastructure (even more so during a hybrid example). With over $3 trillion generated from cybercrime, this is often quite all of the drug traffic trade globally and it highlights the incredible scale of fraud. There are best practice guidelines demonstrated within the FCAs handbook for regulated firms however this will be hard to implement if your cloud provider doesn't understand the precise security governance from your regulator, and let's face it it's tough to know albeit you're from that market sector including if you're a cloud provider that services every industry.
So, from a compliance point of view, IT governance for the banking system is an absolute nightmare and requires tons of thought and planning.
Some of the most points highlighted within the FCAs manual for guidance include:
IT Governance and Strategy
Information Security and controls
Logical Access Security Administration
Business Continuity Planning and Disaster Recovery
As an example, take this question began within the FCA working manual (and this is often just one heading within outsourcing).
A common platform firm must especially take the required steps to make sure that the subsequent conditions are satisfied:
The service provider must have the power, capacity, and any authorization required by law to perform the outsourced functions, services, or activities reliably and professionally;
The service provider must perform the outsourced services effectively, and to the present end the firm must establish methods for assessing the quality of performance of the service provider;
The service provider must properly supervise the completing of the outsourced functions, and adequately manage the risks related to the outsourcing;
Appropriate action must be taken if it appears that the service provider might not be completing the functions effectively and in compliance with applicable laws and regulatory requirements;
The firm must retain the required expertise to supervise the outsourced functions effectively and to manage the risks related to the outsourcing,5 5and must supervise those functions and manage those risks;
The service provider must confide in the firm any development which will have a cloth impact on its ability to hold out the outsourced functions effectively and in compliance with applicable laws and regulatory requirements;
The firm must be ready to terminate the arrangement for the outsourcing where necessary without detriment to the continuity and quality of its provision of services to clients;
The service provider must co-operate with the acceptable regulator and the other relevant competent authority in reference to the outsourced activities;
The firm, its auditors, the acceptable regulator, and the other relevant competent authority must have effective access to data associated with the outsourced activities, also on the business premises of the service provider; and therefore the appropriate regulator and the other relevant competent authority must be ready to exercise those rights of access;
The service provider must protect any tip concerning the firm and its clients;
The firm and therefore the service provider must establish, implement and maintain a contingency plan for disaster recovery and periodic testing of backup facilities where that's necessary having reference to the function, service, or activity that has been outsourced.
Confused? I'm guessing you are! Now, let's add during a hybrid approach where quite one service provider is going to be involved – how on earth are you able to achieve acceptable governance when various cloud providers are being utilized.
My vision for banking and technology within the future (specifical cloud) would be one among more automation as this is often much easier to manage. This including the right education and guidance on cloud technologies from the regulators themselves, which I feel may be a must. the present rules and governance began from the governing bodies have not changed since 2008 (pretty much the birth of cloud) and desperately needs addressing.
However, with this said, we've been invited to 2 separate seminar days based at the FCAs premises to debate these issues and to supply input on potential changes moving forward.
If cloud features a major part to play within the banking world it's imperative that the administration should provide the right advice on the technology utilized with the corresponding governance. At the top of the day, the regulator is funded wholly by the fines it distributes amongst its member firms. virtualization technology me it seems unfair that a firm should suffer a fine from the administration who regulates their understanding of the cloud technology, when the regulator itself features a lack of technical understanding.