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Home | New Service Delivery | Parallels, How CSPs Can Profit From the Cloud
  Seth Nesbitt, Vice President, Parallels
  Seth Nesbitt, Vice President, Parallels

How CSPs Can Profit From the Cloud

Seth Nesbitt of Parallels talks to InterComms about the importance of Cloud Services for Communication Service Providers

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Seth Nesbitt is Vice President Service Provider Marketing at Parallels, where he helps carry the message about Parallels’ vision of “profiting from the Cloud” to service providers around the world. Prior to his current role, Seth was Vice President Product Marketing for Amdocs. In May 2004 he founded the UK Product Marketing Forum in order to encourage the sharing of Product Marketing best practices within the UK. He also sits on the CMO Council’s North American Advisory Board. Seth earned his MBA in 2005 from Oxford University’s Said Business School where he wrote his thesis on Product Marketing strategy in technology companies.

Q: Why are Cloud services important to Communications Service Providers?
There is a tremendous opportunity for Communications Service Providers (CSPs) to generate new revenue streams by offering Cloud based services to their customer bases. This includes raw computing like Infrastructure-as-a-Service and also hosted applications like Microsoft Exchange and Sharepoint. There is also a real threat of CSPs not moving fast enough to address the existing and growing demand for these new services, thereby losing businesses to more nimble Cloud service providers.

While it is true some CSPs are already looking at this area, new methods of consumption, billing, and self-service tools are being expected from customers. According to Melanie Posey of IDC, a Carrier “can’t simply take what they’ve done and port it over into a Cloud model because Cloud does change things.” (

Q: What customer segments are most likely to adopt Cloud services and what will be my routes to market? (Go to market strategy direct/channel/Web or all)?
A: All customer segments will adopt, or are already using Cloud services whether it’s Enterprise, Large Business, SMB, Consumer, Education and Government. CSPs must provide Cloud offering aligning with the specific market being addressed.

For example, most CSPs will elect to address their Enterprise and Large customers through a direct sales model and the Cloud offering may consist of IaaS/PaaS/SaaS and syndicated third party services addressing corporations. Cloud offerings for SMB will be different as the Software-as-a-Service (SaaS) offerings required will be unique to this sector. Generally, messaging, collaboration and syndicated third-party party services and even shopping cart type functionality is needed. CSPs in this space may also elect to private label their Cloud offering to their exiting (and new) channel partners.

The consumer market requires low cost, intuitive interface to manage self-service and minimize support costs. Offerings in the space typically include web hosting, storage as a service and backup.

Q: Should I create my Cloud Service through implementing commercial off the shelf automation software; resell/white label other offerings or build my own Cloud Services from the ground up?
A: Building a Cloud services solution from the ground up will take well over a year. Building a shared environment for applications, (multi-tenancy) along with authentication, security, billing, payment system integration are all extensive projects.

Reselling an existing Cloud service provider’s offering limits control and reduces margins. Generally, the resale model is a good way for a CSP to understand the market. But, the downside of model is that starting with resale often causes a CSP to be “stuck” out-sourcing forever as the migration of tens or even hundreds of thousands of customer email boxes can be difficult and complex. Implementing commercial off the shelf automation software that integrates with existing OSS/BSS systems is the fastest way to go to market and highly profitable. Given how rapidly things are evolving, time-to-market should be THE critical decision making factor. This approach is also the most flexible, as a CSP will be able to adjust pricing and margins with the market, along with adding new Cloud services.

  Parallels Automation
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Q: What Cloud services should a CSP offer to small businesses?
A: There are several including but not limited to:

  • Storage and/or backup
  • Web hosting, Domain name registration and eCommerce
  • Unified communication services like Microsoft Exchange or OpenXChange
  • VoiP and/or hosted PBX services
  • Collaboration services like web conferencing, wikis, and shared workspaces
  • Customer relationship management (CRM) or contact management services
  • Accounting and finance services
  • Social networking tools to market their business
  • Vertical-specific applications such as time tracking

Q: How can a CSP rapidly get to market offering Cloud services?
A: CSPs can rapidly and profitably get to market offering Cloud services by deploying an open solution built on open multi-tenant standards, security, authentication and license tracking. Such a solution must:

  1. Offer a catalogue of SaaS application
  2. Provide a flexible framework for easily adding new services
  3. Enable the syndication of external third party Cloud services.

This enables the CSP to deploy rapidly without incurring the costs of porting each new version of SaaS applications, which can literally cost millions of dollars.

Q: How important is automation in delivering profitable Cloud services?
A: This is the most important aspect of delivering profitable Cloud services. To maximize profits, every possible aspect of purchasing, provisioning, billing, and self-service management should be automated. This is critical to keeping “book to bill” days low, support costs down, and being able to rapidly introduce new Cloud services. Further automation ensures operational efficiency thereby creating the opportunity for higher margins.

Q: What is Parallels Automation and why is it a good fit for CSPs looking to launch and manage Cloud services?
A: Parallels Automation is a commercial off the shelf Cloud service delivery automation solution. CSPs use Parallels Automation to launch and manage Cloud services and increase average revenue per user by automating repetitive and time-consuming tasks. This highly-scalable solution is ideal for Cloud services providers who want to:

  • Automate the delivery of multiple services such as Microsoft Exchange and mobility services
  • Set up Cloud provisioning and recurring revenue billing system which focuses on the specific needs of service providers and integrates with your existing billing system
  • Offer white label services to resellers, VARs and SIs
  • Upsell / cross-sell additional services
  • Delegate management and admin functions directly to customers through a unified control panel or portal

Q: What are some examples of CSPs using Parallels Automation?

  • In the U.S.: Charter Communications
  • In Europe: KPN, Portugal Telecom, and Telekom Austria
  • In Asia: TM Net

Q: What is the future of Cloud services for CSPs?
A: Over the past few decades, communications has become ubiquitous. We no longer call a place, we call people. Cloud services take this trend to the next level. Documents, contacts, calendars, applications and other IT services are moving into the Cloud. CSPs that leverage their network assets to support this seismic shift will be posed for success in the decades to come.

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