The operator opportunity in the new age of personal cloud (Reader Forum)

Ask consumers about how they store and access their photos, videos, documents and more in the cloud, and chances are they will mention providers such as iCloud, Amazon Drive, DropBox, Google Drive or Microsoft OneDrive. This is not surprising, considering the fact that telecom operators today only own about 1% of the U.S. personal cloud user base.

However, this low percentage doesn’t mean that operators have missed their opportunity to get their share of the personal cloud pie. Quite the opposite. According to an Arthur D. Little analysis, the personal cloud market in the United States is poised for significant growth. With an anticipated CAGR of 12% from 2020 through 2025, the total addressable market for personal cloud services is expected to reach $8.9 billion by 2025 in the U.S. alone. 

Although platform providers account for a dominant share of the personal cloud users today, most have yet to monetize their users – unlike operators. This leaves the door wide open for telcos to convert casual platform cloud users into paying subscribers.

The revenue opportunity for operators is supported by two key market influences. 

• The first is simply the increase in data generation. As consumers continue to generate tremendous amounts of data, they are growing out of their free personal cloud storage allowances. To both protect and store the massive amounts of data on their operator-powered smartphones and smart devices, more consumers will be keen to move to a paid personal cloud model. The operator is well-positioned to take advantage of this need.
• The second is that consumers – many of whom are now accustomed to using the cloud – need and want more than simply storage capacity and low prices. They expect security, privacy and data ownership as part of a set of robust, feature rich cloud offerings, and they are willing to pay more for a secure, quality cloud experience. Operators are a natural fit to provide these capabilities as they already are seen as trusted providers whereas incumbent cloud platform providers have not had the same reputation for safeguarding personal information.

Understanding the new age of personal cloud

The cloud services opportunity also comes from the coupling of significant advancements in the application and hardware ecosystem with evolving consumer digital trends. The way we communicate, keep healthy, work, learn, entertain and live our daily lives increasingly leverages mobile technologies, cloud solutions and third-party applications. Operators who are able to give their subscribers a single digital door to all their data – whether that data comes from playing games, archiving education content, documenting vacations, storing smart wearables information or saving important business documents – are well positioned to generate new revenue streams and increase loyalty. For example, an operator could enable the use of Smart Home, Telehealth and Education apps through their personal cloud platform, targeted at specific users. 

Transitioning from a storage-only relationship with subscribers to one focused on service engagement requires operators to build capabilities that allow for the integration and hosting of data from different third-party applications. One approach is to develop a single, operator-branded “hub” application that seamlessly integrates with other OTT/cloud platforms and is capable of hosting personalized cloud applications. A hub such as this will deliver a one-stop destination where subscribers can reach all their personal media no matter where it resides.  

In the new age of personal cloud, providers who maintain app-first or device-first real-time connections to users will have an advantage. Users will quickly see the value in moving away from cloud providers that simply collect and store their data to ones that improve the customer experience in unique ways. 

The cloud-first operator strategy

It is no secret that mobile operators have experienced flat or falling traditional telecom revenue. Personal cloud delivers an opportunity to create new services, provide more value for subscribers, build brand loyalty and customer satisfaction, and strengthen their bottom line – an especially important benefit as they look to recoup significant 5G network investments. 

Fortunately, many operators have already launched branded personal cloud products. Even if still largely focused on storage, they are creating engagement among subscribers. The time has come, however, to move forward and fully embrace a cloud-first operator strategy. The global personal cloud opportunity available to operators is valued between $15-$25 billion. If operators want a piece of the pie, they must act now and implement a decisive strategy. 

Step one requires the operator to shift its mindset from that of a storage provider to one committed to providing a deeper means for its subscribers to interact with their data. The next step is putting in place an operator-branded personal cloud hub application. To get there, operators must deliver interoperability with third-party applications and seek out partnerships with platforms. Finally, operators must ensure that the personal cloud experience is stellar and seamless. These strategies are key to attracting and retaining premium cloud users that can significantly grow operator revenue.

The post The operator opportunity in the new age of personal cloud (Reader Forum) appeared first on RCR Wireless News.

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