Meanwhile new use cases, such as 5G and IoT, are adding complexity and additional considerations that touch nearly every part of service provider organizations. Service providers have no choice but to embrace these technologies and move away from a hardware-constrained methodology to compete, be efficient, and continue to meet customers’ demands.

Enterprise Transformation: Service providers are integral to enterprise transformation around the world as they provide the critical link to transformative technologies such as industrial, municipal and residential IoT; cloud and data center services; workplace and productivity tools; global connectivity for networks and devices; mobility solutions; and digital content offerings.

They are also the key enablers for digital transformation across retail, manufacturing, financial services, health, education, government, and other industries.  They connect virtual changing rooms, self-driving cars, industrial factories, agricultural machinery, and surgical robots – putting them at the heart of global digital transformation.

Ultimately, service providers must both enable their customers' transformations while simultaneously managing their own transformation. In fact, no other organization may be more greatly impacted by digital transformation. Seems daunting, to say the least, but the silver lining in the cloud of digital transformation is that they don’t have to go it alone.

Telecom transformation

Telcos are on the precipice of enormous change—as well as promise. They are helping to transform cities, factories, manufacturing, agriculture and transportation. They are connecting smart utility grids, cities, homes, and classrooms.  They are enabling mobile services globally, connecting us with the people, content and games we love. They provide fundamental human, commercial, and financial services in under-served areas where these are otherwise out of reach. They make robotic medicine and self-driving cars a reality.

Pipeline recently had the opportunity to discuss digital transformation with Eric Troup, Microsoft’s CTO for the Telecommunications Industry and an expert on telecom transformation. And notably, similar to how service providers touch nearly every area of digital transformation, Microsoft touches every area of telecom transformation. Microsoft’s long-standing customer and partner relationships in the telco industry give it a particular expertise. Combined with its technical leadership in workplace productivity, cloud, artificial intelligence, and scalable, carrier-grade software platforms, Microsoft is uniquely positioned to help service providers drive critical gains from enterprise-wide digital transformation.

“Our perspective,” says Troup, “is that there are two angles to consider. The first is: how do we directly enable telcos to achieve that digital transformation? It’s not about selling them a business plan or selling them on the cloud. It’s about accelerating their ability to implement.” Troup went on to explain that service providers, in order to compete, must componentize their network, network functions and computing resources for the purpose of software-defined networking and business application development. He refers to this as “cloudification” of the network.

“The other aspect we consider is: how do we help other businesses build platforms that take advantage of the network, once cloudification has taken place?” Troup notes that the promise of IoT, connected cars, and connected cities all rely on the network and its agility. “Microsoft’s role is to enable the actualization to happen so that all of these new business platforms—from social networking to content delivery and more—can work efficiently.”

The demand for bandwidth, content and connectivity amidst the proliferation of billions of connected devices is insatiable and ever-increasing. To meet this, service providers must become more agile. Troup adds, “You cannot keep up with the growth demand, not physically and not cost effectively, using the old hardware-defined model. It is too cost prohibitive, and service providers must move to a software-defined model. They have to transform from hardware-constrained to software-defined.”