Service providers need to offer partner led solutions, Tata Communications survey

A global study commissioned by Tata Communications reveals that the solutions that network service providers offer do not always meet the expectations of enterprises, who rank security 52%, cloud 43% and mobility 32% as their top technology priorities. Conducted by IDC amongst enterprises and service providers across 32 countries in Africa, Americas, Asia Pacific, Europe and Middle East and North Africa, the research also shows that enterprises see partnerships as key in their decision making process, indicating that by finding the right partners, service providers could win more business from this market segment.

The global study shows that enterprises consider service providers best equipped to increasing their network capacity or reach 73%, or delivering hybrid networking 66% services, while around half 48% of enterprises feel that their network service provider is best suited to address their cloud needs. Approximately a third 31% of enterprises feel that having access to cloud services developed by their service provider would help support them better on their cloud journey.

“Through the right partnerships, service providers are able to open up new revenue streams in growth areas such as cloud and unified communication and collaboration, without having to invest in developing their own solutions from scratch,” said James Parker, President Global Sales, Tata Communications.

“By joining forces with like-minded organisations, service providers are best-placed to address their customers’ increasingly complex IT requirements and facilitate their digital transformation.”

Around three-quarters 76% of service providers think that supporting employee mobility is key for enterprise unified communication and collaboration strategy, yet only a quarter 26% of enterprises rank this as a top priority. While more than a quarter 27% of enterprises cite lack of employee readiness as a barrier for unified communication and collaboration adoption, the service providers surveyed do not see this as an issue for their customers.

“Our research indicates that many service providers have not kept up with the rapid pace of digital disruption in enterprises, which is jeopardising their ability to win business in this segment,” said James Eibisch, Research Director, IDC.

“In order for service providers to be able to meet enterprise changing IT needs, they should explore partnering with other like-minded players, complementing their own solutions portfolio. The right cloud ecosystem, for example, makes it quicker and more cost-effective for service providers to grow their revenues from the cloud.”

The research suggests that close to a half 41% of service providers do not have a definite stance on partnering. In contrast, more than half 57% of enterprises say that when choosing a service provider, it is important that they find the right partners to fill gaps in their offering or extend their reach. Additionally, service providers overestimate the importance of reputation in enterprise decision making by a third 30%.

Parker continued: “Our go-to-market strategy is focused on enterprise enablement, and we are seeing growing appetite for partnerships in the service provider community globally. Partnering with Tata Communications allows service providers to speed up time to market by offering our wide range of services on a white-label or sell-with basis, without having to invest in developing these capabilities themselves. That is one reason why we have established our global partner programme, supporting our partners in delivering a full portfolio of cloud, mobility, managed security and unified communication and collaboration services.”

The Tata Communications global network includes one of the most advanced and largest submarine cable networks and a Tier-1 IP network with connectivity to more than 240 countries and territories across 400 PoPs, as well as nearly 1 million square feet of datacentre and colocation space worldwide.

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Excerpted from, Bridging the gap: Partnering to align service provider solutions with enterprise expectations

Cloud

Despite the rapid growth in enterprise demand for cloud based services and ecosystems globally, service providers are putting less priority on cloud and hybrid networking than enterprises are. 43% of enterprises put cloud services in their top 3 technology initiatives but only

24% of service providers put cloud services in their top 3 portfolio priorities.

Service providers are underestimating their role in the cloud ecosystem as well as demand from their customer base, especially when cloud demand is spread evenly around the world. The Americas, Europe, MENA, Africa and APAC all rank cloud as a top three priority.

66% of enterprises would use a cloud ecosystem provided by a network service provider. Enterprises want service providers to deliver cloud services of their own as an alternative to other offerings in the market. Service providers have the potential to differentiate their cloud offering with end-to-end management of services, convenience of using a reduced number of suppliers as well as bundling cloud connectivity where possible.

Cloud consulting and migration is an opportunity where 36% of enterprises said their network providers can do better to help with their cloud strategy.

Around a third 31% of enterprises feel that having access to cloud services developed by their service provider would help support them better on their cloud journey.

While only 6% of service providers are actively developing cloud services as an alternative to local and global cloud service providers. Less than half 48% of enterprises feel that their network service provider is currently best suited to address their cloud needs.

There is an opportunity for service providers to pivot towards serving an increasing number of cloud needs of their enterprise customers and position themselves as key players in cloud enablement. The challenge for service providers is to find an efficient way to grow their presence in the market and deliver reliable services both locally and globally.

Partnering

After highlighting the enterprise priorities, challenges and demands, service providers have to evaluate how they are going to address them. They can continue on the path they are on or look at different ways of adapting to their customers’ needs.

Today, close to half of service providers 41% have no stance on partnering, even though more than half 57% of enterprises say that when choosing a service provider, it is important that they find the right partners to fill gaps in their offering or extend their reach.

Partnering is important to enterprises despite only 26% of service providers recognising it as a driver for enterprise decision making. In contrast, service providers overestimate the importance of reputation in enterprise decision making by a third 30%.

Enterprises are increasingly looking at how service providers partner and for what purpose. 48% expect network providers to extend network coverage, so they do not have to contract multiple providers. 41% believe network providers should partner to integrate a fuller range of services into their portfolio.

Enterprises see partnering as a way for service providers to build out their offering and serve more of their needs. They also want service partner strategies to remove the complexity from their operations and enable them to grow without managing multiple relationships.

The challenge for service providers is to partner effectively and deliver for customers. 59% of service providers look for partners that have a track record of similar partnerships while 44% look for global or international coverage.

50% of service providers see the quality of the business relationship and partnership governance as determining factors in the success of a partnership, ahead of technology issues. A successful partnership is delivered through mutual understanding and benefit.

Some of the biggest benefits associated with service provider partnering is improved or expanded service to existing customers 74%, faster time to market 59% and reduced risk in service development 47%.

All of these factors relate direct to what enterprises are asking from their service providers. They want new services and reach from a single provider. Partnering can help to deliver that.

The Opportunity

Service providers can bridge the gap between enterprise expectations and their service portfolio and the fastest and simplest way to do that is through partnering. As enterprise demands change and new solutions emerge it is critical that service providers stay in tune with their needs and have a strategy in place for rapidly serving them.

Enterprises already see partnerships as a differentiator and an important aspect of their service provider’s businesses. Service providers can use partnering to both expand offerings while demonstrating a commitment to serving long-term enterprise demand.

Service providers that are examining the potential of partnering should remember these take-aways:

• Cloud demands are underestimated by service providers and offer a tremendous opportunity for service providers willing to enter the market
• Declines in traditional services can be offset by serving new and emerging demand for cloud, UCC and hybrid network services
• Service providers underestimate their role in the cloud ecosystem and the potential they have to serve enterprise cloud demand
• Partnering enables service providers to remove the risk from developing new services while enabling them to adapt to changing enterprise demand
• Helping enterprises to consolidate the number of service providers they are using is important and a differentiator
• Partnering accelerates time-to-market making it easier to serve new and growing demand for services that service providers are currently not offering

Overall, service providers are well positioned to benefit from partnering and use it to solve some of the disconnect between their customers’ needs and the services they deliver. There is tremendous potential for service providers with strong partner strategies to narrow this gap and grow their business. Partnerships are a driver for success in this unique and rapidly changing time in the IT industry.