Alibaba Cloud Adds an Application PaaS Solution via the Terminus Acquisition

S. Soh

Summary Bullets:

  • The acquisition of Terminus has given Alibaba Cloud an attractive application PaaS solution that it can take to market and help to boost cloud adoption in China.
  • The Terminus PaaS is evolving and it has a strong roadmap; the multi-cloud approach is a crucial factor when Alibaba Cloud extends the solution internationally.

Terminus and Its Application PaaS

Terminus is a Chinese software provider founded in 2012 with a strong focus on addressing the needs of retail, procurement, and the supply chain functions. The company was acquired by Alibaba, and its products are now offered based on Alibaba Cloud while retaining the Terminus product brand. The Terminus team remains intact and is driving product development, but tapping into Alibaba’s ecosystem, go-to-market machinery, and its infrastructure and technologies to accelerate business expansion. Continue reading “Alibaba Cloud Adds an Application PaaS Solution via the Terminus Acquisition”

DXC Creates a Data-Driven Contact Center Solution Based on Amazon Connect

S. Soh

Summary Bullets:

  • There are opportunities for service providers to partner with hyperscale cloud providers to develop differentiated offerings; DXC’s contact center based on Amazon Connect is an example.
  • Cloud providers need to work with IT services providers with strong business and technical capabilities to accelerate the adoption of their services.

Hyperscalers such as Alibaba Cloud, Amazon Web Services (AWS), Google Cloud, and Microsoft Azure have developed a broad set of products and services to help enterprises transform their IT and become more efficient. However, they do not have many engineers and solution architects running around to help every enterprise deploy their technology, particularly if integration work is required. The hyperscalers are not in the business of helping customers integrate their solutions with existing applications. This opens up opportunities for service providers to develop managed cloud services through partnerships with hyperscalers and build expertise in both implementing solutions in different cloud environments and managing them. Continue reading “DXC Creates a Data-Driven Contact Center Solution Based on Amazon Connect”

IBM Advocates Open, Hybrid, and Multi-Cloud in Helping Customers Transform their IT

S. Soh

Summary Bullets:

• IBM is poised to grow its cloud services business by helping customers to accelerate their migration of mission-critical applications to the cloud.

• IBM brings a lot of value by helping customers remove complexities in their cloud migration; and avoiding vendor lock-in through an open source, hybrid cloud and multi-cloud strategy.

IBM held its annual analyst event – IBM Asia-Pacific 2019 Analyst Insights – in August 2019. The event was held in Singapore and coincided with THINK Singapore 2019, which was the first THINK event in the country. The THINK event helped IBM showcase its capabilities to customers in the country as it starts to ramp up customer engagement. Over the past few years, companies have experimented with AI and moved non-critical workloads to the cloud. IBM now advocates moving from experimentation to more substantial transformation to gain speed and scale. This will involve moving mission-critical applications (80% are still kept on-premises) to the cloud for scalability and agility. While this is ideal, to benefit from cloud-native features, enterprises need to deal with many layers of complexity ranging from regulations and compliance through to re-architecting legacy systems, security considerations, underlying infrastructure, and change management (people and processes). Continue reading “IBM Advocates Open, Hybrid, and Multi-Cloud in Helping Customers Transform their IT”

CSPs Need to Digitize, Automate, and become More Agile

S. Soh

Summary Bullets:

• There is an urgency for communications service providers (CSPs) to transform their businesses, including systems, processes, and people/culture.

• Agile product development, digital platforms, automation, and SDN/NFV solutions are key aspects of CSP transformation.

CSPs face declining carriage revenue and increasing competition from traditional rivals and disruptive players in the form of OTT players, cloud-based service providers and new market entrants with leaner operating models. Against this backdrop, CSPs see an urgency to improve customer service to minimize churn, develop digital sales channels, and embrace cloud and digital solutions to achieve operational agility. At the same time, technology advancement is opening up new opportunities for CSPs in the enterprise segment. Examples include SDN/NFV, big data, cloud, AI/ML, cybersecurity, IoT, and 5G. Enterprises across various industry verticals are tapping insights from customer data to gain competitive advantages. CSPs hold vast amount of data and operate very complex IT systems and networks. There are opportunities for CSPs to transform their business and operations through the use of digital solutions but major changes need to occur for a CSP to be successful. These include developing new partnerships, upskilling/reskilling their workforce, changing the culture, and streamlining systems and processes. Continue reading “CSPs Need to Digitize, Automate, and become More Agile”

Telecom Assets for Sale, Telecom Assets for Sale

S. Soh

Summary Bullets:

• Telecom operators need cash. FTTP, 5G and multi-play is expensive. Voice/data is not able to pay the bills. Operators are offloading assets that are no longer seen as core to their business.

• REITs and private equity firms are buying infrastructure for sale, like data centers and now complete companies managing them as another utility for better returns.

Increasingly, telecommunications operators are facing pricing pressure resulting in limited revenue growth from fixed and mobile services. Meanwhile, they need to invest in faster access such as fiber and 5G (equipment and spectrum), which will require more capital. Some telecom operators are also looking at growth outside of the traditional voice and data services and they are building capabilities to offer IoT, enterprise services and entertainment services for consumers. These new areas require different types of investments including platforms, applications, and content. While shareholders want to see new revenue streams and growth, they also expect stable returns (e.g., dividends and share buyback) from these businesses and a healthy balance sheet. This makes it more challenging for telecom companies to raise capital to fund their growth ambitions without carrying too much debt. Continue reading “Telecom Assets for Sale, Telecom Assets for Sale”

NBN Co Stepping Up the Development of Services for Business Customers

S. Soh

Summary Bullets:

  • NBN Co is developing capabilities to support business users, including providing higher QoS and enhanced customer support.
  • With better connectivity, service providers have opportunities to offer more products and services (e.g., cloud, collaboration and networking) to businesses of all sizes.

NBN Co has been looking to the business segment to grow its revenue and has publicly discussed the aim to make $1 billion in revenue from this segment. While many small businesses are already using residential-grade NBN services, there is a demand for connections with higher service levels, lower contention ratios and better performance. In December 2018, NBN Co indicated that its network had reached half a million businesses. NBN Co is doubling down on developing products for business customers, and this will accelerate as it reaches more businesses across the country. Continue reading “NBN Co Stepping Up the Development of Services for Business Customers”

TPG Needs the Merger with VHA, and to Grow Business Customers

S. Soh

Summary Bullets:

• TPG is facing headwinds in growing its revenue and there is limited room to expand its margins. It needs to find new ways to grow its business.

• The merger with VHA will give TPG mobile capabilities and greater scale to compete with Telstra and Optus; but it also needs to pursue growth from the business segment.

TPG released its H1 FY2019 results in late March 2019. Total revenue for H1 FY2019 (ended 31 December 2019) declined 1.5% YoY to A$1.24 billion, but underlying EBITDA and NPAT improved 2.8% and 3.5% respectively. Revenue and EBITDA growth was mainly due to improvement in its Corporate division, but the growth was offset by the decline of Consumer division due to the DSL to NBN migration and iiNet home phone decline. Within Corporate, growth was mainly driven by the Vodafone Hutchison Australia (VHA) fibre contract (contributed A$22 million of growth), which will not deliver long-term growth. While TPG has not been able to grow its revenue in H1 FY2019 compared to the same period in the previous financial year, it has been successful in reducing costs to improve its margins including a reduction in employment and overhead costs. With the consumer market challenged by competition and NBN migration, there is limited upside. There is also limited room for further cost reduction, so business-as-usual is not an option for TPG. Continue reading “TPG Needs the Merger with VHA, and to Grow Business Customers”

Optus and Cisco Join Forces to Target SMBs in Australia

S. Soh

Summary Bullets:

• Optus has partnered with Cisco to launch two new offerings at Cisco Live 2019 – Optus Cloud Calling (BroadCloud) and Managed Cloud networking (Meraki).

• The combination of NBN, LTE, SD-WAN, and cloud UC will meet the needs of many SMBs and branch office scenarios.

Optus and Cisco continue to strengthen their relationship. At the Cisco Live 2019 event in Melbourne, Australia, Optus was the key sponsor and it used the event to announce new Cisco-based solutions. The first solution is Optus Cloud Calling which is a unified communications (UC) service based on Cisco’s (formerly Broadsoft) BroadCloud platform. This is cloud-based UC solution hosted by Cisco. The service offers telephony, native mobility, and advanced conferencing and collaboration tools. BroadCloud is integrated with Webex solutions to assess audio/video conferencing and team collaboration applications. Optus Business is providing this service as a managed service bundled with its Evolved Voice SIP trunking and business mobile services. Continue reading “Optus and Cisco Join Forces to Target SMBs in Australia”

Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey

S. Soh

Summary Bullets:

  • Vocus’ results for the first half of the financial year do not look great. Revenue is stagnating and EBITDA is declining.
  • There is, however, some optimism as the company embarks on its three-year turnaround journey. The company has a new leadership team and its network assets remain a key differentiator.

Vocus has reported its results for the first half of the financial year (H1 FY 2019) and updated investors on the outlook for the company. Revenue for H1 FY 2019 was flat (growth of barely 1% YoY) and underlying EBITDA dropped 10% compared to H1 FY 2018. Consequently, underlying NPAT declined 29% and net leverage ratio increased to 3.1x. Net debt increased $88 million to $1,089 million. The company grew revenue from its New Zealand operations, its enterprise, government and wholesale (the bulk of the growth is from the project revenue associated with the construction of the Coral Sea cable system). However, the growth was offset by the decline in its retail business in Australia; consumer declined 12% and SMB declined 27%. Overall, the financial results are not looking too good for the first half of the financial year. Continue reading “Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey”

Alibaba Cloud Looks for Growth Outside of China, and Indonesia Is a Good Target

S. Soh

Summary Bullets:

  • Alibaba Cloud is gaining a stronger foothold in Indonesia with its second data centre, a growing partnership ecosystem and an initiative to support start-ups to develop their business through a cloud-native approach.
  • Alibaba needs to grow its international presence, and it is establishing an early presence in markets such as Indonesia where competitors do not yet have a local presence.

Alibaba Cloud has launched a second data centre in Indonesia after launching the first data centre 10 months earlier. The second data centre enables Alibaba Cloud to increase capacity, provide higher availability and improve disaster recovery capabilities. The company also launched the Internet Champion Global Accelerator Program to support the growth of start-ups and local talents. The program will provide training, mentorship and venture capital opportunities to enterprises and professional services. The program is launching in Jakarta, and it will be extended to Bali in January 2019, as well as other global markets in the future. This is a strategic move since start-ups and SMEs in general are more ready to adopt a cloud-native approach and can become heavy cloud users as they scale up. Continue reading “Alibaba Cloud Looks for Growth Outside of China, and Indonesia Is a Good Target”