There can be no doubt that cloud computing has arrived and will define the IT landscape for at least the next decade, perhaps forever, but how can current and future providers of cloud services profit from this industry-wide shift? What are the capabilities service providers need from their cloud service delivery platform? What does the cloud mean for traditional vertical service delivery platforms? And how can providers enhance the profitability of their cloud services offerings? These topics are explored in a new framework and complimentary whitepaper we just released called the Cloud Service Provider Blueprint.
There can be no doubt that cloud computing has arrived and will define the IT landscape for at least the next decade, perhaps forever, but how can current and future providers of cloud services profit from this industry-wide shift? What are the capabilities service providers need from their cloud service delivery platform? What does the cloud mean for traditional vertical service delivery platforms? And how can providers enhance the profitability of their cloud services offerings?
These topics are explored in a new framework and whitepaper we just released called the Cloud Service Provider Blueprint. I will be writing a series on this Blueprint and selecting different aspects each time so stay tuned for more updates.
While this Blueprint focuses on the key capabilities service providers need to successfully deliver cloud services, it is worth noting that there are some foundational requirements, such as reliability and scalability, that are common to all large-scale automation systems. For the purposes of this discussion, these capabilities are considered as a given and are therefore not specifically addressed.
From a business model perspective, the cloud service providers with the highest margins, highest ARPU, lowest operating costs, and lowest churn will have a significant competitive advantage in the long run. To achieve this advantage, they will need a comprehensive cloud service delivery platform—and the cost of developing such a platform is a factor they will need to take into account.
A cloud service delivery platform must be able to design relationships between the tens of thousands of components involved in delivering cloud services, in order to create multiple options within service plans, as well as critical dependencies, commercial terms, and billing options—including over-usage policies. The complexity of the relationships between components is significantly greater than what is presently found among traditional telecommunication services.
It must also be able to work with a multitude of operating systems, databases, and application servers that power provisioned services and their individual components; be able to mix and match them efficiently to provide best–of-breed service offerings; and be able to easily replace one component with another if the need arises. (For example, service providers must be able to easily switch between third-party ISVs who supply one of their enabled services.) This complexity requires cloud service delivery platforms to be able to handle the widest range of diverse components.
Traditional vertical service delivery solutions are typically designed to solely provision services located on a provider’s premises. However, many services today are hosted on third-party vendors’ sites or in the cloud. Consequently, a complete cloud service delivery platform must be able to provision, configure, and manage such remote or syndicated services in conjunction with their on-premise services. For example, a service provider may want to combine an onsite Hosted Exchange deployment with offsite e-mail archiving from a third party.
To more easily explain the characteristics of a complete service delivery platform, Parallels, based on its experience working with thousands of the world’s leading cloud service providers, has developed a Blueprint of an ideal cloud service delivery platform. This Blueprint can serve as a guide to the capabilities required to deliver cloud services efficiently, profitably, and with a seamless user experience.
The Cloud Service Provider Blueprint expands on the composition of each of these blocks individually. First, however, to grasp the big picture, it’s helpful to see how they all fit together, in order. What the figure illustrates is that the infrastructure, both physical and virtual, needs to be managed. On top of that, services need to be defined, managed, provisioned, and billed. On top of these services, it’s essential to include a layer that gives customers visibility into their subscription services and lets them self-administer basic functions, so they’ll have less need to call into the support center. The figure also illustrates that these core elements do not live in a vacuum. They need points of integration with all critical front- and back-office systems. Additional points of integration are needed to provide customers with a storefront and shopping cart—or, as it is more recently called, a services marketplace. When all of these elements are put in place with a high degree of automation, they enable providers to offer public cloud services profitably.
Up next: I'll look at each layer in the stack in detail, starting at the bottom.
-Josh Beil
Director of Market Strategy, Parallels
@joshbeil
