The landscape of enterprise IT systems is rapidly evolving as companies increasingly migrate their operations to cloud platforms, driven by ongoing digital transformation across industries. Huawei forecasts that by 2025, all businesses will utilize cloud platforms, with 85% of enterprise applications running on them. This shift underscores the burgeoning potential for growth in the IoT (Internet of Things) sector, presenting both opportunities and challenges for operators. The rapid adoption of cloud platforms is fundamentally transforming how enterprises manage their IT environments, pushing operators to reconsider their service offerings and infrastructure investments to stay competitive. The ability of operators to adapt to this new paradigm will determine their success in the rapidly changing enterprise IT landscape.
The Evolution of Network Requirements in the Cloud Era
As enterprises move their operations to the cloud, the nature of required network connections is transforming. Traditional LANs (Local Area Networks) are giving way to WANs (Wide Area Networks) that link departmental services to cloud services. This transition necessitates a variety of connections, such as traditional private lines, Internet private lines, and specialized private lines for cloud connectivity. The needs of different sectors vary significantly; for instance, governments and banks prioritize secure, high-quality, low-latency connections, while SMEs (Small and Medium-sized Enterprises) often focus on cost-effective solutions.
With enterprises adopting cloud and hybrid cloud strategies, the specifications for connection bandwidth, latency, and security have become more stringent. Operators see new growth opportunities in offering B2B (Business-to-Business) services, yet they face competition from OTT (Over-The-Top) cloud service providers like Amazon Web Services (AWS) and Alibaba. This increased demand for robust and versatile network infrastructure has pushed operators to innovate and enhance their service offerings. As businesses require more reliable and faster connections to support their cloud-based operations, operators must invest in advanced technologies and infrastructure to meet these needs.
Competitive Landscape: OTT Players vs. Operators
Amazon Web Services serves as a prime example of the competitive environment, providing cloud services that support Amazon’s e-commerce operations. AWS collaborates with operators and Internet Exchange Points (IXPs) to enhance its communications and dedicated line services. Similarly, at the 2018 Mobile World Congress, Alibaba announced its ambition to become the world’s largest cloud communications service provider within three years. Alibaba now offers enterprise networking services through a newly established cloud backbone network, impacting operators’ private line services, especially on cross-regional and national levels.
Operators are thus urged to redefine their B2B service strategies to meet these challenges and seize new opportunities. Aligning their connectivity strengths with customer requirements using a cloud-and-network synergy model is essential for differentiation. Operators ready to adapt can use the cloud as a unified platform and B2B service portal to cater to government and enterprise customers. The adoption of such strategies can ensure that operators remain relevant in a market increasingly dominated by OTT players, safeguarding their revenue streams and market positions.
Embracing Cloud Synergy for Enhanced Service Delivery
Beyond basic services like computing, storage, and networking, operators can migrate existing communications capabilities to the cloud. They can provide services such as Data Center Interconnect (DCI), Content Delivery Networks (CDNs), enterprise network management, and enterprise communications—ensuring faster and more flexible service delivery. Innovating services on cloud platforms presents further opportunities, particularly in the IoT domain, to expand service categories. The integration of advanced cloud services with traditional telecommunication offerings empowers operators to offer more comprehensive and tailored solutions to their enterprise customers.
Operators can utilize their cloud platform and network capabilities to develop ecosystems with partners, offering flexible solutions for industry scenarios like distance education, industry video, and enterprise office. This collaborative approach would support the digital transformation efforts of government and enterprise customers. By leveraging their existing strengths and exploring new partnerships, operators can drive greater value and innovation within the IT ecosystem, broadening their service portfolios and increasing customer satisfaction.
Prioritizing High-Quality and Agile Dedicated Line Services
Operators focusing mainly on connectivity need to prioritize high-quality, agile dedicated line services to meet evolving enterprise customer expectations. With the growing demand for cloud private lines, operators must develop high-performance networks that deliver on bandwidth, latency, and security expectations. This includes enabling minute-level provisioning capabilities and offering online retail-like purchasing experiences. Network intelligence becomes a crucial asset in this context, helping operators to fine-tune their services and meet specific customer needs with greater precision and efficiency.
To outpace OTT competitors, operators must leverage their existing network assets and build a competitive edge through comprehensive service offerings. Huawei, with profound expertise in carrier networks and services, offers solutions that help operators construct complete B2B business models. By adopting integrated service models and leveraging advanced technologies, operators can create more resilient and adaptable network infrastructures capable of supporting diverse enterprise applications and services.
Strategic Implementation and Ecosystem Development
Amazon Web Services (AWS) is a prime example of a competitive cloud services environment, supporting Amazon’s e-commerce operations. AWS collaborates with operators and Internet Exchange Points (IXPs) to enhance its communication and dedicated line services. Similarly, at the 2018 Mobile World Congress, Alibaba announced its goal to become the world’s largest cloud communications service provider within three years. Alibaba now offers enterprise networking services through a new cloud backbone network, affecting operators’ private line services, especially on a cross-regional and national scale.
Given these challenges, operators are urged to redefine their B2B service strategies to seize new opportunities. Aligning connectivity strengths with customer needs using a cloud-and-network synergy model is crucial for differentiation. Operators prepared to adapt can use the cloud as a unified platform and B2B service portal to serve government and enterprise customers. Adopting these strategies can ensure that operators stay relevant in a market increasingly dominated by over-the-top (OTT) players, thus protecting their revenue streams and market positions.