CSPs can achieve 25 percent reduction in IT cost over a five-year period by adopting telecom services delivered through a Software-as-a-Service (SaaS) model, according to new research released by Analysys Mason.
The projected reduction compares to the cost of the traditional on-premise model of software delivery and consumption, which entails CSPs having to buy, manage, and maintain their own complex hardware and software infrastructure.
More details on the Analysys Mason research can be found https://pages.nokia.com/T007FH-The-A-to-Z-of-SaaS-Purchasing.html
Telecom SaaS services have higher costs due to recurring monthly subscriptions. Analysys Mason said those perceptions did not typically take into account the full extent of potential benefits using SaaS services, including lower initial investment and always having the latest software and technology.
In the case of the on-premise model, CSPs have to buy data center resources every five years or so and use IT consultants regularly to manage their elaborate IT environments.
Analysys Mason said it considered cost-saving benefits related to reliability, time-to-market, scalability, staff training, updates and upgrades, maintenance, IT hardware reduction, security; as well as the improved potential for revenue generation tied to enhanced reliability, time-to-market, and updates and software upgrades from the use of SaaS services.
CSP spending on SaaS accounted for 5 percent of SPs’ operational expenditure in 2019, according to Analysys Mason; that is expected to rise to 11 percent by 2023, as CSPs continue to execute on digital transformation projects.
“There are many factors that CSPs need to weigh when looking at the attractive option of adopting new capabilities through a SaaS model. Long-standing CSP pain points are also avoided: no more having to plan how data center resources, testing of changes and right scaling of hardware to best meet capacity needs; these all fall to the SaaS vendor,” Justin van der Lande, Research Director at Analysys Mason, said.
“There is a strong operational and financial case for moving to SaaS services and away from the dated practice of buying customized software for analytics, security, and other functions that run on costly, complex, on-premise infrastructure,” Mark Bunn, Senior Vice President, Cloud and Network Services at Nokia, said.
