During Huawei Connect 2016 in Shanghai, Ian Charles Kahan, managing director of infrastructure services communication media and technology at Accenture, gave an overview of the changing landscape for cloud services, both internally and externally, for communications service providers.
Kahan, who joined Accenture in 2007, is focused on compute and core function virtualization and their operational implications in the context of legacy transformations to 4G, 5G and software-defined networks. Here is what he had to say...
Thank you very much. I'm delighted to be here. Thanks for the invitation. I'm very happy to have the opportunity to speak to such a big group of industry leaders today about probably the most significant topic that will occupy most of our energy over the next years. I think we heard it in the opening speech: Cloud is probably the biggest transformation that we will embark on in this industry. We have already started. We've had various first waves. But by far, we have not finished.
Today, I want to take a bit broader look at what cloud does to the carrier business. What are the new business opportunities behind it, internally, but most significantly, externally?
What we believe is: Everybody in the industry has realized now that we need to get the change right. There is a big opportunity behind cloud. How will we engage with our customers? How will we transform our internal operations to deliver the services to our customers?
If you talk about public cloud, we still believe there is a window of opportunity for new business. I'll not scare you in this 15-minute speech with big statistics on how big the market is and what the opportunities are. I'm sure you know that already. The opportunity is there. It's just about how we seize it and how we can get to compete with the big web-scale players.
I also want to shed some light on what cloud means internally to rotate to the new and how it supports our internal service delivery.
Impact of Bezos' Law on Public Cloud
Let's jump right into the first complex. That is how we actually approach our customers in a B2B model. So I think it was two or three years back. I read an interesting article in some online industry news feed. So the term, Bezos' Law is nothing I created. I don't claim it, but I find this is pretty right. Everybody knows [Amazon's] Jeff Bezos. I'm not sure whether he's here today or not.
Just translating a modified version of Moore's Law we see that year on year there's a massive annual savings if we compare computing performance against cost. This is the translation of Moore's Law.
Bezos' Law is price for performance in public cloud services. You might look at this and say, "Well, that's a great thing." If my cost for performance is falling much faster than the price level that I am to achieve, that's a great thing. Right? Indeed it is. The tricky thing here is that there are a lot of challenges and risks, and how do we seize the opportunity? The challenge that you will have in every investment is that speed is the king. The moment you invest, a year later, your assets are down 35%. If you have not managed to capture the market share by then, it's a tough time. The reality on clouds is how do we actually get our clients to adopt public cloud services?
I want to talk about the observations from what we do every day in the market with our clients, and with you.
So from a communications service provider's perspective, there are certain demands out there with our customers, which is of utmost importance. Public cloud is brutal. Either we meet the customer demands exactly, one by one, or our customers just will not consume our services. We've seen the first communications service providers pull back and retreat from the market. We've seen even renowned hardware vendors pull back and retreat from the public cloud business. I see some gentlemen getting nervous here. Don't worry. I will not name anyone.
The customer demands are pretty simple things, public cloud services, whether infrastructure-as-a-service, platform-as-a-service, or software-as-a-service. Any packaged services you deliver; they need to be usable. They need to be transparent in the way they are priced and are delivered. They can be consumed. They can ramp up capacity and ramp down capacity. They need ease of integration. Any customer demands, "I need to integrate it into my systems." It is great that they can access web portals and online portals. But if there is limited ability, how do you allow or we allow our big enterprise clients -- and let's face it, this is a big segment of our target market -- to integrate those services into their IT services and processes to have it automated, to have it ordered, to have it tracked, to have it inventoried, to have it metered, by the minute, in real time? Then you have a challenge.
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