Network vs Cloud Service Providers

The Important

  • The core of a Network Service Provider’s business in network services
  • The core of a Cloud Service Provider’s business is cloud services
  • This difference in focus drives different requirements for suppliers

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Discussion

Network service providers (NSPs) add value to the economy by providing network services. Cloud service providers (CSPs) add value to the economy by providing cloud services. Businesses and Consumers need to connect to cloud services, which is where NSPs come in. CSPs provide the services businesses and consumers connect to.

Of course there are nuances, some overlap, and evolution over time. There was a time when the main business of NSPs was providing voice services. Voice services were an application network overlay on a transport network. Sometimes access/transport and voice elements were integrated. But just how much of an overlay/application voice services were, was made clear in the move to voice over IP (VoIP). Overlay / application service logic can move to any part of the network that adds the most value whether that is a centralized cloud or an edge cloud. Transport, OTOH, needs to connect traffic sources and destination, even if there are differences in when star, mesh, and other topologies make the most sense. NSPs will always have a role to play, offering network services. Where application/overlay logic resides may change over time, depending on technology changes, innovation, and other dimensions of competition.

The Important in a NSP, is network services, NSPs rely on equipment, services, and operations that facilitate network services. Anything else they do, is in addition to this foundation. The Important in a CSP, is cloud services, so CSPs relay on equipment, services, and operations that facilitate cloud services. Anything else they do, is in addition to this foundation. These two different focal points lead to different requirements for NSP and CSP suppliers.

There are other nuances, including competition in areas such as content, the converging service set in cable and telecom, and the remaining technology differences between cable and telecom.

The Important: all companies, operators and their suppliers, must have clarity about what is most important to the business, and what is the most compelling value proposition.

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