Fighting the Revenue Drain from OTT Applications
“Think specifically about the OTT (over the top) Cloud applications that run on the infrastructure you provide: Facebook, WhatsApp, Skype, Google Maps and more. You provide the infrastructure, the satellite links, the entire spectrum of network services (security, backup, bandwidth and more) . . . and OTT apps use it all to siphon revenue from you with lower-quality and often-free apps—from messaging to navigation to telephone.”
With service providers estimated to lose $386 billion by 2018 due to competition from OTT applications, these organizations need to rapidly seek new revenue models. When customers can get a good enough service for free, they are likely to choose this ‘non-monetary’ option. Up until now, service providers have not had much success in competing with these OTT services, which makes this trend a major concern.
There are a multitude of ways companies have tried to combat the issue, but the three most popular approaches have not yet been proven effective. In our white paper, Combating the Revenue Drain form OTT Applications, we explore a more plausible and strategic way of keeping the integrity of your business model and app offerings intact. By counting your strengths and expanding to new client spaces, you may find that it is preferable to cede the non-profitable, and focus on the profitable. You might even find that you can improve your business as a whole.
Changing Environments Create New Demands
In our opinion, the distinction between casual connectivity and critical connectivity is the key to finding new avenues for growth and taking stock of present strengths. Leveraging your infrastructure, your customer base and your service level agreement will help you in developing a plan to offer new customers more than an OTT player could ever give them.
With advancing technology, there are many more industries in need of constant connectivity. These are some of the areas you could be targeting:
- Smart cities: As cities become more connected, they will need an infrastructure that can handle constant and high levels of network availability.
- Internet of Things: Connected devices are meant to simplify life, but without a network that can operate efficiently, they are meaningless.
- Healthcare: This might be the most critical industry of all, as issues of connectivity can also be issues of life and death.
- Financial services: Rightly obsessed with security and compliance, financial services, such as trading and banking rely on CSPs to deliver the highest quality services.
These are just a selection of the areas of business where service providers have a distinct advantage as they require high frequency and super low-latency.
Action Items for Success
To be a viable option to these new industries, a CSP must complete a few action items making them more accessible and available to customers. This will make you more than just a ‘connectivity’ provider who can carry data point to point as quickly as possible.
The first thing to do is to open your systems. With open systems, provisioning is rapid—often instant and often self-served through a catalog. An open system can allow you seamless connection to any of the applications, storage, databases—any technology—that a customer could have. The next step is to integrate and disaggregate applicable functions. This streamlines operations for optimal efficiency. Then, it is important to incorporate network function virtualization to help cut costs. And finally, you need to move to the cloud’s edge. The closer you are to the customer, the better you can provide your services.
With an open, purpose-built network infrastructure, separated from the Cloud data center, significantly virtualized and located at the edge of the Cloud so it’s closest to your customers, you’re in an ideal position to offer critical networking services. Moreover, moving transport services to the edge will open up new revenue and new markets, provide the most efficient and effective use of your infrastructure, and—most importantly—increase existing customer satisfaction and loyalty.To properly combat the revenue drain created by OTT applications, download our white paper today. You will find an in-depth guide to face the challenge in a prepared and intelligent way.