The Emperor’s New Clothes?

Software as a Service (SaaS) can be defined as software that is available to rent by individuals and enterprises. Such software applications can be rented from application service providers, who may exist as entities focused exclusively on making a particular application available. Increasingly, telecoms operators and service providers are adding such capabilities to their product portfolios. The concept is nothing new – centrex has been around as a service for over 40 years – allowing customers to rent access to a service that is hosted by the telecoms operator. However, the broad term SaaS covers a multitude of applications and is reckoned by many to offer outstanding growth potential. Indeed, Gartner points to growth as an industry from $5 billion in 2007 to over $11 billion in 2011. No wonder the term is attracting so much interest.

But, we shouldn’t let the mystique of a new movement mask the reality. It’s not just CRM or other applications that benefit from the SaaS model. In fact, plain old centrex is a core element of the movement. It’s not old-fashioned TDM centrex anymore though, but powerful new developments enabled by advances in VoIP technology. IP Centrex is a key application that has been revitalised by upsurge in interest in SaaS, with new capabilities and compelling benefits. Next generation centrex services can offer considerable advantages to both the enterprise and to the carrier.

Enterprises gain the advantages of fully-featured PBX services without the overhead of managing on-premises solutions. They gain seamless mobility, reflecting an increasingly mobile and nomadic world. Capex can be reduced as the equipment doesn’t need to be purchased up front and opex benefits can be enjoyed too as there is no need to manage a costly box of tricks attached to the corporate WAN. This is often overlooked in discussions of SaaS, as the emphasis tends to be on new applications or new ways to share data. The reality is that voice communications remains fundamental to the core of enterprises, as it’s still the most common means of communication.

From the service provider’s perspective, hosted voice services represent a clear and compelling revenue opportunity, as they offer a means to target market segments with high and sustainable ARPU and AMPU. If we consider for a moment the turbulence that is generally experienced amongst consumer markets, the enterprise represents an interesting segment to address, particularly for operators seeking to challenge an incumbent or dominant player. Consumer markets are hard to break into – witness the fierce competition shaken up by ever-lower cost broadband service packages. Consider also the rise of new business models that are directed towards differentiated consumer segments, such as the emergence of the advertising-funded mobile play exemplified by Blyk. Operators have to innovate ever faster simply to maintain their position, let alone develop a strategy for growth.

Worse, not only can operators end up investing for no net benefit, but may actually lose out as more nimble players emerge to attack their customer base. How can this cycle of chasing the same markets with increasingly ingenious tactics and programmes for essentially the same or diminishing reward be broken? Well, one approach is to sidestep the problem and invest in new markets and segments, which is why the enterprise domain and SaaS is gaining such interest amongst the operator community. Centrex offers operators a means to reach out to a promising and relatively unexplored market, capitalising on the richness of a new class of products, enabled by IP technologies. As Sten Nordell of Telenor commented at last week’s IMS World Forum, the SME segment remains the largest untapped market for service providers.

But this opportunity needs to be balanced against the fact that customers are now more demanding. If a similar cycle of increased demand and delivery to no net gain is not to be experienced, then operators need truly differentiated solutions. They need tools to enable themselves to stay several steps ahead of both their customers and their competitors. That’s why IMS offers a long term solution, as a strategic tool for operators to launch services targeted towards niches within highly segmented markets. Gintel’s solutions offer a way to address this, deployable on both an emerging IMS framework and on any NGN architecture. They deliver both rich and proven services, and the means to evolve new features, products and capabilities to exceed customer expectations. Gintel's solutions are adapted to the new environment of IMS and SIP, and, crucially, build upon the heritage of the past. Solutions that contain the tools to build competitive advantage for the future, not only selectively adapting to the demands of customers, but allowing operators to anticipate new and unexplored requirements. Why not take a moment to explore what we can offer?

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