Show me the money: conclusions from the SDP Global Summit

One of the strongest themes to emerge from the SDP Global Summit, which took place in London recently, was that of money and risk. This should hardly be surprising. One after another, operators talked about the risk involved in offering consumer based services via online portals and the diminishing returns they offer in the face of competition from free sources of content available over the internet. A few came to a bold conclusion: partner with content providers for consumers, but focus your own energies and efforts on the enterprise.

This is the message we have been promoting for a number of years. Enterprise customers offer more predictable, less volatile revenue streams. They pay for high-quality services that meet their needs. There are proven ROI models for delivering enterprise services in the form of IP and Mobile Centrex. They want to shift to OPEX driven models, in which subscription services replace CAPEX intensive solutions from the legacy era. They want new communication models and features, which can be delivered seamlessly across any network and to any device. IP and Mobile Centrex are applications that help meet these goals.

So why is it that content-driven solutions continue to attract so much attention? The conference was uncertain. Certainly, consumer needs have to be catered for, but there is a never-ending cycle of new products and increasing uncertainty in the face of non-traditional competitors. What’s more, revenues have been threatened for some time. Hence the cry “show me the money” – used as a clarion call to vendors promising riches from their solutions. If ROI is uncertain, investment decisions will be complex and long delayed.

That’s why the enterprise looks a more promising area for investment. Further, as we have discussed before, there are opportunities to take enterprise solutions to the whole of the business community. Instead of just thinking about large corporate or multi-national organisations, service providers need to consider the needs of the SME and smaller enterprise market. There is potential for significant growth as SMEs and smaller enterprises seek to adopt tools and solutions that have previously been prohibitively expensive and focused almost exclusively on larger companies. There is great appetite for new services in companies with fewer than 250 employees and particularly so in emerging SMEs which are the backbone of the economy in many regions. An enterprise focus must give consideration to such companies, as they represent a new opportunity to develop recurring revenue and to expand market attention.

Of course, consumer applications are essential, but the revenue generators are not necessarily those that are content-driven. They may be simple services, such as location or call distribution, but the long-term profitability of such services cannot be assumed. In this context, the enterprise looks more and more appealing and service providers need to identify services and opportunities that help meet revenue and margin goals.

IP and Mobile Centrex applications offer this potential. It’s a win-win for both service providers and customers: proven ROI for service providers, lowering the risk of service deployment for service providers, while enterprise customers benefit from predictable costs and huge CAPEX savings, as well as enjoying a suite of advanced communications services, driving efficiency and productivity gains.

As the world of communications becomes ever-more competitive, advanced enterprise voice services offer proven models that can be enhanced for future growth. Isn’t it time to give this some consideration? If you are looking for the money, you could do worse than start here.

Tore Saeter, September 2010

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