Proof of concept

Ecosystems: Telcos can’t? Yes, we can.

ABI Research found 55 percent of implementer respondents only look to telcos for connectivity; just 13 percent expect them to create ecosystems for IoT etc. Yes but…

Let’s look at the findings* in more detail. But, bear in mind what you’d have said had anyone asked you if you saw Apple as an ecosystem player before the iPod then the App Store? Or Amazon before AWS and its Marketplace? In other words, the lack of track record doesn’t rule out future success.

ABI Research’s B2B technology survey indicates that technology implementers predominantly rely on telcos for connectivity and not for value-added, vertical specific services. Although 55 percent of implementer respondents see telcos in terms of connectivity alone, almost a third (31 percent) like the idea of what ABI describes as ‘Connectivity+’; that is, telcos bundling value-added, vertical-specific services with connectivity by exploiting their assets and natural capabilities. Capabilities like data, device management, applications and services management, security, and analytics to add value for implementers

OK, only 13 percent of survey respondents expect telcos to create new ecosystems for IoT, data-related stuff, IT and cloud services, but they’re looking backwards, not at what could be. Although, telcos would be be wise to consider ABI’s suggestion that they are focusing on the wrong segment. Many telcos are particularly interested in automotive at the moment (Top Gear syndrome?), but the survey found that “the retail, government, and logistics markets are very interested in telco services,” according to Dimitris Mavrakis, Research Director, ABI Research.

A cloudy outlook

He goes on to warn that the survey results show that telcos cannot, and should not, compete with web-scale companies for cloud computing services. We explore this in our own primary research that will be published later this month – 5G: Is platform the killer use case? Contact Annie Turner if you want to access as soon as it’s published.

You can get a taste of what empirical evidence showed us in a recent proof of concept Catalyst projectA platform for IoT and anything as a service. It focused on the challenges of running a sustainable ecosystem that was profitable for all parties. Huawei’s Alan Byrne was part of the Catalyst team and concludes, “We discovered that there isn’t a big enough market for telcos to have their own platform, so we need to come together to create a network of platforms as service providers and to engage with cloud operators.”

Indeed, as TM Forum’s CEO, Nik Willetts, explained in his keynote at the start of TM Forum Live! in May, you have to collaborate to innovate and win in the digital world – along with how to do just that.

*These findings are from ABI Research’s Industry Survey: Transformative Technology Adoption and Attitudes – Implementers’ Perspective of Telco and Cloud report.

ABI’s research also revealed that only 4 percent of respondents plan to use telcos for cloud computing services currently, and this will drop to 1 percent in the next five years. But, 12 percent of respondents are using hybrid (a combination of public and private) clouds today. This will increase to 38 percent in the next five years, as enterprises increasingly move away from using private and public cloud services on a standalone basis.



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About The Author

Snr Director, Research & Media

Annie Turner has been researching and writing about the communications industry since the 1980s, editing magazines dedicated to the subject including titles published by Thomson International and The Economist Group. She has contributed articles to many publications, including national and international newspapers such as the Financial Times and International Herald Tribune, and a multitude of business-to-business titles. She joined the TM Forum in 2010 and is responsible for overseeing the content of the Research and Publications portfolio.

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