How cloud and ethernet are disrupting the CSP market

If there has ever been an “us vs. them” mentality among the IT and networking groups within carriers and service providers, ethernet may soon put an end to it.

As a recent article in Capacity magazine pointed out, carrier ethernet adoption is not just being driven by the fact it’s scalable and flexible to meet business needs, but because IT and networking groups are being forced to converge. The explanation is simple: cloud computing has turned IT into more of an on-demand service, so even those within carrier wholesale divisions who were used to primarily providing the “pipes” are also becoming a part of what makes computing power possible in all kinds of scenarios.

“Carriers looking to ready themselves for a more converged world might start by adapting specific services to make them better suited to the delivery of computing services,” the article in Capacity magazine says. “Ultimately, they face the need to change their whole network to ensure that it can respond dynamically to the way IT services are bought and sold. The carrier mindset must move from one of relative isolation from other parts of the telco business to a more end-to-end and on-demand style of service provision.”

This point was reinforced just last month by a report from Mountain View, Calif.-based Frost & Sullivan, which said Carrier Ethernet services market revenue exceeded US$4 billion in 2013, and is expected to reach US$10.0 billion by 2018. The market research firm said the surge can be directly attributed to the cloud computing needs of large businesses.

“As enterprise customers seek cost-effective solutions to converge their voice, data and video applications, Ethernet—with its large number of benefits, and cost effective, flexible, and reliable bandwidth—continues to be a winner in the transport services arena,” the Frost & Sullivan Business Carrier Ethernet Services Market Update says. “(Enterprises) are driving CSPs’ efforts on stringent monitoring of SLAs . . . to meet strict performance objectives.”

As the industry gathers in Chicago for International Telecoms Week (ITW) 2014 this month, it may be a good time for carriers and service providers to reflect on how they can stay one step ahead of this convergence of IT and networking. Of course, part of it will be working with trusted partners who understand the needs of enterprise customers in a cloud-based era. However it’s also about developing the leadership capability to foster a new kind of team. The mandate of that team is already becoming clear: provide customers everything they need, with ethernet as the enabler.

Learn more about how Allstream services the global carrier and service provider market. 

photo credit: boltron- via photopin cc