initiatives are creating a blueprint for open digital platforms, with an architecture for business agility, better operability, and improved automation. Composability and modular components enable telcos to confidently select from a broader choice of vendors, knowing that these assets will more easily integrate into a total solution. Most importantly, recent activities have aligned network and business systems for the first time to achieve the common goals of previously isolated standards communities. Foundational to this cooperation is widespread and common adoption of the most important software innovation in recent memory, and the third pillar.

Cloud native

Cloud native applications are designed with modern architectural principles to enable elasticity and resilience under any conditions, including when deployed in a private or public cloud.

The Cloud Native Computing Foundation (CNCF) provides a community to foster these goals and spearhead open-source development projects delivering value in this ecosystem. CNCF provides objective measures and an automated test suite for cloud native applications, ensuring they are resilient, manageable, and observable, principles that are optimal for digital processes in an ever more open world.

Gartner predicts that cloud-native platforms will serve as the foundation for more than 95 percent of new digital initiatives by 2025—up from less than 40 percent in 2021.

In this new era for telecommunications, software—including networks and business solutions—is made both agile and operationally efficient through fundamental redesign enabling the deployment of new services and automation, particularly for wholesale and enterprise markets.

Service providers are in different stages of their respective cloud transformations. Capitalizing on transformation, however, requires four distinct capabilities. First, service providers must understand how to orchestrate solutions and revenue flows for diverse topologies. Second, APIs must be exposed to achieve interoperability between telco and enterprise partners alike. Third, on-demand “digital” services must be exposed in either marketplace or direct models. And finally, multi-cloud environments must support new monetization models, often involving revenue sharing and settlement among parties.

Transformation for telcos

Industry transformation is essential if the role of telco is to be secure in a digital future. Telcos will either become more like digital enterprises or will be relegated as utilities in inelastic markets. Our research shows that easy-to-understand pricing is still of great importance to consumers, who are open to switching operators for an experience more like the apps they love. Real-time engagement and monetization, with upfront availability and transparency, are critical to the digital-first experience as a whole. The work encompassed by the three Cs provides a blueprint for telcos that embrace change. 

Becoming digital is a fundamental step, but it is only the first step in a journey towards new pricing paradigms to serve changing market conditions. Partner revenue sharing and outcome-based pricing are increasingly in demand for B2B and emerging B2B2X models.

Optimizing profits and minimizing costs has always been the goal of any telco that wants to survive. Cloud and 5G are now changing the role of monetization and altering what telcos need from their business systems. The time is now for companies looking to finally benefit from digital transformation. Convergent, composable, and cloud native design principles provide guideposts for more cost-effective and dynamic system architectures underpinning the modern digital telco.