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New Service Provider Business Models Among Top Six Challenges and Opportunities
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January 18, 2011

New Service Provider Business Models Among Top Six Challenges and Opportunities

By Gary Kim, Contributing Editor

There are six major transitions global service providers face, according to Cisco's internal management consulting group, the Cisco (News - Alert) Internet Business Solutions Group. One of the clear trends is "video everywhere," irrespective of access method, said Scott Puopolo, Cisco vice president IBSG, during an interview. Collaboration is another of the key trends, most obvious perhaps in the business market.

A third major service provider opportunity is the small and medium-sized business market, which many studies suggest will be key to economic growth. So the issue is what else service providers can provide to SMBs beyond connectivity. 

A fourth transition is the manner of application use and consumption, especially "X as a service" based on cloud or distributed computing. Broadband acceleration is the fifth key trend, with 108 percent annual mobile data growth, for example, of which 66 percent is video. 

The sixth opportunity is the search for new service provider business models, especially "two-sided" models, where service providers generate revenue both from customers who pay for connectivity services and at the same time generate revenue from business partners, especially in the digital content area and from advertising. 

"We see a significant increase in content provider relationships with service providers where the service providers add value through network services, billing or customer service capabilities, for example," says Puopolo. That isn't to dismiss the continuing drives for cost optimization, but the really interesting things revolve around new business models, Puopolo said.

"Content and media companies want to reach customers and service providers can be an intermediary and an aggregator," said Puopolo. "Service providers can add value for media aggregators and advertisers by providing content delivery networks, meta data and intelligent ad insertion."

Service providers also understand consumers across a subscriber's profile, including contextual information about where the customer is, what the network access is and what device is being used. Quality of service also is of interest, as is a user's proximity or other dimensions that can help improve a user's quality of experience. 

"Consumers will be overwhelmed with choice, how they can manage and aggregate desired content," says Puopolo. "Service providers can be intelligent aggregators." 

To find out more about Cisco, visit the company at ITEXPO East 2011. To be held Feb. 2-4 in Miami, ITEXPO (News - Alert) is the world’s premier IP communications event. Carlos Torales is speaking during “Vendor Panel: Responding to Today’s and Tomorrow’s Enterprise Requirements.” Don’t wait. Register now.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf

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