#5 – Cloud giants and mobile operators partner for third party services

The cloud market is dominated by a few strong players that will soon hold more than 50% global market share. Given their heavy R&D and investments, they are gaining distance on other regionalized players and will gain further market share in 2016. Operators’ plans to leverage cloud platforms for third party services will be achieved mainly through partnerships with these global players. Operators will provide managed services, hosting facilities, regional user data storage and also become resellers of cloud vendor applications.

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Currently, the cloud market is dominated by Amazon, Microsoft, IBM and Google, who account for nearly 50% of the global market share. In Q2 2015, Amazon Web Services had a 27% share of the global cloud infrastructure market, followed by Microsoft at around 10% (Synergy Research Group). These players have rolled out data centers on a global scale with a modern data center design, allowing low-cost scalable infrastructure and operations with a business model leveraging these assets.

The telecom operators’ service offerings are focusing specifically around reliability of service and high security, although it is unclear what of these aspects is not already provided by the current global IT players in the space.

Due to regulatory demands on localizing sensitive user data, IT players are setting up local data centers and partnering with local players for storing and managing sensitive user data.

When it comes to the PaaS and IaaS market, the leading OTTs (Google, Amazon & Microsoft) are adding so much capability to their platforms through heavy R&D they are gaining distance on the more local and regionalised players. We therefore predict that operators will increase collaboration with these players, offering Managed Services and infrastructure services, and acting as resellers, rather than competing head to head. Due to regulations and local customer requirements, these global players will need local partners and connectivity, and managed connectivity is of course the core of the operators business.

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