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Most IT services providers are at various points along a IT transformation journey that is being driven by demand for more agility. Today a customer can fire up a virtual machine in a few minutes, but it can still take weeks to provision the associated network services. To respond to the challenge IT services providers are embracing a variety of so-called cloud-native technologies that essentially promise to turn IT into a series of modular microservices that can be programmatically invoked to deliver IT services on demand.

A global survey of senior leaders of IT telecommunications and media providers conducted by Analsys Mason on behalf of Amdocs, a provider of software and services to carriers and media companies, finds that 82 percent of the respondents concur that the need for greater business agility and innovation drives adoption of cloud native technologies and DevOps practices. Today 80 percent of digital, BSS and OSS systems run top op of virtual or physical data centers. The goal is by 2022 to have over 90 percent of systems running on some form of cloud infrastructure.

The study finds that 91 percent of companies are aware that operating cloud native systems alongside legacy IT investments will be a critical challenge for the next four years or more.

The good news is that 64 percent say microservices architecture will be a requirement for new systems within two years. But only 46 percent are currently employing DevOps practices in limited areas. A total of 27 percent are still evaluating DevOps methodologies, while 18 percent have a plan in place to adopt DevOps within the next one to two years.

Daniela Perlmutter, vice president of global marketing for Amdocs, notes IT services providers that have not begun to make the transition to DevOps are underestimating the scope of the challenge. “DevOps is a very big word,” says Perlmutter.

A separate survey conducted by Insight Avenue on behalf of CCgroup, a public relations firm, supports that conclusion. A full 86 percent of respondents report they have or are about to implement some form of digital transformation. Those projects have already taken their toll. More than half of carriers surveyed (52 percent) have changed leadership and nearly three quarters (72 percent) have restructured at least once.

Over three-quarters (78 percent) say they are more demanding of vendors as the IT landscape becomes more complex, and a staggering 98 percent are looking to vendors to play a bigger role in driving innovation in support of their digital transformation journey. At the same time, the survey also makes it clear purchasing has become more complex. Nearly three-quarters (74 percent) of telcos now see consensus buying as the new normal with purchasing decisions now involving more people. The average purchasing decision has 38 people involved, which, not surprisingly, can take up to 45 weeks in some cases to complete. More troubling, 70 percent say they believe the number of people involved in decision making will increase over the next two years.

Time is running out

Most telecommunication carriers and IT services providers are clearly running out of time. Major carriers such as AT&T and Verizon began their digital transformation projects a long time ago. They are already starting to see the benefit of those investments as they begin to roll out next-generation 5G services on top of open source IT platforms such as OpenStack. Rivals are going to have to rely more on commercial platforms to catch up. But that means their total cost of operations is likely to be higher, making it doubtful many of them will be able to remain competitive.

Consensus purchasing decisions are a better way to go when there isn’t a clear immediate threat to the business. But in the months ahead IT services providers are about to confront a new reality. Not only will they have to contend with existing rivals, there will be a whole host of new ones leveraging modern IT infrastructure. IT services provider need to accelerate the transition to cloud-native technologies, starting with reducing the number of people involved in making platform decisions. There simply isn’t going to be enough time. IT services providers that have not made the transition to more agile IT infrastructure by 2020 are not going to have enough customers to continue justifying investments. The assumptions most of them are making when it comes to a 2022 forecast is that customers will patiently wait for them to complete their digital transformation journey. Customers will only wait only long as the first IT service providers complete that journey. IT services providers that arrive late are going to find it next to impossible to convince customers to switch back to them. Unless carriers and IT services providers make some critical decisions today, very few of them will be around after 2020 to tell the tale. In fact, based on the survey results it’s apparent that nearly half of them are already dead services providers walking.

Photo:  Herschel Hoffmeyer / Shutterstock.


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Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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