Is the Cloud the Operator’s Secret Monetization Weapon?

Well, it’s 2012 and everyone is going to be talking about what kind of year it will be, or what kind of year 2011 was.  It’s inevitable at this time of year, and the fact that there’s nothing much being announced at this point in time is no small reason for the recaps or future-tellings.

For myself, I’m looking deeper into the whole service provider monetization project area, analyzing what I’ve always called “secondary data” from the surveys.  Operators talk among themselves, and so when we survey them we get anecdotal information on what other operators are doing.  This spreads out the span of the survey at the expense of reducing the detail and the quality of responses.  Generally I don’t use secondary data, but now I want to look at it because it might shed further light on the project activity.  We survey less than 50 operators, and while this base has been uncannily accurate in terms of providing issues and solutions, it’s not large enough to measure the projects themselves.  The secondary base, which is over a thousand operators, is.

Why bother with this stuff?  The reason is that I think there’s a lot that’s going to happen in 2012 and I also think that how it will impact the industry will depend on the state of the network operator monetization projects underway now.  We are going to have a tumultuous year in terms of market change, and that means that only stuff that’s at least gotten some internal traction has any chance of being a factor in the future.  How much of that stuff is there?  I expect that I’ll have some good data available for our February 2012 issue of Netwatcher.  Some of the early stuff is looking pretty interesting indeed.  What’s likely to be more interesting is how the vendors are playing in this project dynamic.

All of the five major players (Alcatel-Lucent, Cisco, Ericsson, Huawei, Juniper, and NSN) have assets that operators are, or would be, interested in.  In the second half of the year, Alcatel-Lucent and NSN seemed to be stepping up their game, presenting a much stronger story in mobile, content, and even services.  I’ve been particularly impressed with NSN’s progress in raising their strategic credibility with network operators.  Among the big five, only NSN and Huawei managed to do that in 2011.  The question is whether these guys will follow up on their early momentum or whether one of the other players will do something dramatic.  Cisco remains the one to watch; as I’ve said, they have more assets in play than anyone else.

The coming tablet wars are likely to force the issue in project terms.  Tablets are a kind of intersection point; they are mobile (3G and in 2012 4G) yet not-mobile (WiFi), voice-crippled (no standard voice from carriers) and yet voice-enabled (Skype, Google Voice, etc.).  They’re an almost-computer that is still almost convenient.  What the tablet is doing is creating positive pressure to converge all the monetization goals, and to put the focus point squarely in the hands of appliance giants Apple and Google rather than the operators.  Already I can see the mixture of issues in monetization slowing down content and mobile projects and accelerating cloud projects.  I think that’s going to continue, and yet if there’s a space where the Alcatel-Lucents and NSNs of the world are still lagging, it’s in the cloud.  That’s what gives Cisco its chance.