Telco Tower

The Telco’s Role in Big Data

Telco TowerBig Data has been one of the hottest IT trends over the past few years. If it’s true that networking and IT are coming together, then Big Data should provide a significant opportunity for communication service providers. I haven’t yet forecast this market out myself, but I have seen several analyst forecasts looking at Big Data technology growth being anywhere from 25% to 40% CAGR over the next five years. However, I haven’t seen a lot written on how a telco could leverage this trend to create a new wave of growth.

First there’s the obvious: the more data which requires cleansing, sorting, and storing, the better for anyone involved in networking. Video will be, by far, the largest driver of bandwidth over the next five years, but Big Data could drive bandwidth by as much as two orders of magnitude. There are literally hundreds of Petabytes of storage out there which require moving across networks, and the telcos should be able to monetize this.

Another interesting angle on big data for telcos is compliance. When it comes to compliance, there is no global standard. Every country has its own laws, regulations, and penalties for non-conformance. This should be an area that a telco with local knowledge should be able to trump the top data mining specialist. Telcos can offer services that are differentiated by being able to comply with local laws much easier and storing data locally. In addition, for some firms, there may be a requirement to have the processing and analysis of the data done locally, as well.  Where customers choose to store their data may be one of the most important decisions when it comes to a successful Big Data implementation.

Also, I think there’s a role for the telcos when it comes to building ecosystems of companies that are in like industries.  Since the telco is likely to have many customers in the same vertical, they could offer services where they perform analytics, and create benchmarks that customers could use to compare themselves to others. More importantly though, they could offer B2B analytic services over a common, secure network since the telco owns the network.  This could be used for several companies in an ecosystem to compare habits of specific customers. An example of this could be having an airline, hotel, and car rental agency analyze common customer data to better understand customer behaviors.

The success of the telco in big data though certainly isn’t a fait accompli.  The right application, analytic, and compute partners are critical to what a telco will and won’t be able to do. Telcos will also need to shift their service level agreements (SLAs) away from network-related metrics that are application and analytic based.

The era of Big Data will soon be upon us, and will create economic value — not just for customers but also for many service providers.  Telcos have an opportunity to step up and gain a level of relevancy to IT that they’ve never really had before.

About the author
Zeus Kerravala
Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. He provides a mix of tactical advice to help his clients in the current business climate and with long term strategic advice. Kerravala provides research and advice to the following constituents: End user IT and network managers, vendors of IT hardware, software and services and the financial community looking to invest in the companies that he covers.