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Beyond retail: new growth in the era of the enterprise

October 31, 2016

Amit Sachdeva   

Amit Sachdeva, Global Head, Cloud and Application Service Provider Business

Service providers are seeing big opportunities in addressing the growing demand for solutions to support enterprises’ digital transformation. While the retail market has a limited number of solutions and subscribers, enterprises want service providers to deliver a rapidly expanding list of services such as cloud, managed security services and unified communication and collaboration (UCC).

Growth in new enterprise services is phenomenal. Between 2013 and 2018, Cisco System expects cloud IP traffic to grow by one third, with many service providers seeing double digit revenue growth from cloud services. Furthermore, Infonetics Research estimates that VoIP and UCC services will be an $88 billion market by 2018.

Looking at those numbers, it is easy to see why there is renewed emphasis in the telecoms industry on serving enterprise customers. Broadband and mobile subscribers have reached saturation in many markets, while prices for basic voice and data services are falling. Against this backdrop, the enterprise market offers new, long-term growth opportunities.

The land grab for subscribers is over in many retail markets and service providers are looking at how they serve enterprises with high-value, critical services. The move from retail to enterprise is therefore about going beyond subscriber growth and looking at where a service provider can add value and capture new revenue from an existing customer base.

That creates an interesting challenge for service providers, as cloud and UCC services demand higher levels Quality of Service (QoS) and Experience (QoE). These services add complexity to their operations while adding risk in terms of service development and staying on top of enterprise demands. Enterprise customers also have much more sophisticated needs than traditional retail customers. They want services that are continually evolving and scaling to meet their specific needs. In retail, the services have been tried-and-tested over years and service providers know how to sell them. That is why this shift in focus can be a big learning curve.

With limited experience in selling enterprise services, service providers look for the support of partners on the sales side. UCC, for example, delivers distinct benefits for enterprises but enterprise customers need to be educated and convinced to move beyond their traditional phone services. From service providers’ perspective, UCC requires a very consultative sales process with technology and platforms that are easy to understand and deploy.

Partnering is a way to manage this transformation. Service providers can work with enterprise experts who have experience in delivering cloud and UCC services to help them to get it right. Working together can be a way to reduce risk, develop an enterprise service portfolio and sell more effectively to enterprise customers.

The opportunity in the enterprise market is tremendous but also complex. There is a low margin for error with a chance to make huge revenue gains. Partnering should be a critical part of any ambition service provider’s strategy for tapping into opportunities that the enterprise market brings.

How do you see service providers changing how they approach enterprises? Let us know in the comments below.