It never is quite clear whether connectivity as a service is “something new” or simply a new way of restating an older value proposition known as outsourcing. The traditional value of outsourcing is that it converts capital and human resources investment into a managed service.
In place of enterprises owning and managing their own resources, they shifted hardware, software and human resources to a third party. The upside for enterprises was supposed to be lower capex cost, access to the latest upgrades and fewer management chores.
The advantage for outsourcers was creation of managed services revenues with a hoped-for higher value content and therefore higher revenues in what might otherwise be a profit-challenged business.
The traditional issue has been that outsourcing makes more sense for a smaller entity than for a larger entity, especially when license fees are set on a per-user or per-instance model. While outsourcing (or connectivity as a service) often makes sense for small entities without the resources to manage infrastructure, it typically becomes uneconomical for a large enterprise.
The economics of owning unified communications platforms versus buying “communications as a service” provide a clear example. A small entity often can justify paying per-user license fees for a managed service rather than owning a switch. A large enterprise always does better owning its own switches, given the alternative of many license purchases.
Small entity Wi-Fi almost always is easy to set up and own. Larger enterprise deployments entail more engineering, so a managed approach can make sense. Still, while it might make sense to contract for site engineering, it might not make sense to use a managed services contract for maintenance.
Perhaps a better case can be made for management of more-complicated environments where connectivity has varying quality-of-service parameters, where private networks anda public network access coexist or where application customization is required, and can be provided by the “as a service” provider.
As always, customized software requires domain expertise beyond “connectivity.” Higher-value “as a service” helps increase offer value, but also requires supplier expertise that is costly and specialized.
But recent moves by major connectivity providers to essentially outsource or buy “computing as a service” to support core 5G networks provides another illustration of when “as a service” has perceived advantages over “do it yourself.”
One way of illustrating complexity is the difference between onboarding “cloud computing” capabilities and ensuring “connectivity” across national boundaries and usage settings. Many enterprise or business users might want to have a simple, transparent way to add connectivity of any type by clicking on an order menu, much as they can order compute services.
That “network as a service” capability might be as much a matter of provisioning ease as anything else. The key concept is “on demand.” Ideally, customers can dial up or dial down services and features, quality of service levels, performance levels, pricing and rating options, at any location, for any service term, on demand.
Still, it remains debatable how much value most connectivity providers can deliver, beyond core connectivity. That is simply an acknowledgement of the traditional value of scale in a connectivity provider’s business.
It makes more sense to scale functions and features horizontally (connectivity of any type, anywhere) than vertically (customization by industry, for example).
No matter how much talk there might be of “customization,” a few key core capabilities--privacy, security, identity; quality-assured bandwidth and latency; on-demand provisioning and “connectivity anywhere I need it” are the horizontal foundations.
The irony is that connectivity most often has been a “service” (though sometimes it is created on a “do it yourself” basis by enterprises). The really novel change here is not “outsourcing” or even “management” but the ability to order up anything “on demand.”
“On demand” has been the industry objective for five decades, no matter what we call it.
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