Fighting the Revenue Drain from OTT Applications

By Hayim Porat, CTO ECI

“Think about the OTT (over the top) Cloud applications that run on the infrastructure you provide: Facebook, WhatsApp, Skype, Google Maps and more. You provide the infrastructure, the satellite links, the entire spectrum of network services . . . and OTTs use it all to siphon revenue from you with lower-quality and often-free apps.“

With service providers estimated to lose $386 billion by 2018 due to competition from OTT applications, these organizations need to rapidly seek new revenue models. When consumers can get a good enough service for free, they are likely to choose this ‘non-monetary’ option. Up until now, service providers have not had much success in competing with these OTT services, which makes this trend a major concern.

There are a multitude of ways service providers have tried to combat the issue, but the three most popular approaches have not yet been proven effective. In ECI’s latest white paper, Combating the Revenue Drain form OTT Applications, we explore some strategies for keeping the integrity of your business model and app offerings intact. By leveraging your strengths and expanding to new verticals, you may find that you can improve your business as a whole.

Changing Environments Create New Demands

In our opinion, the distinction between casual connectivity and critical connectivity is the key to finding new avenues for growth and leveraging present strengths. When done correctly, these provide you definite advantage over any OTT.

With advancing technology, there are many more industries in need of constant connectivity. These are some of the sectors you could be targeting:

• Smart cities
• Internet of Things
• Healthcare
• Financial services

These are just a few of the areas where service providers have a distinct advantage as they require high frequency interactions and are very sensitive to latency.

Action Items for Success

To be a viable option to these new industries, a CSP must first tak a few actions that will make you more than just a ‘connectivity’ provider who can carry data point to point as quickly as possible.

1) The first thing to do is to open your systems. With open systems, provisioning is rapid—often instant and often self-served through a portal. An open system can allow you seamless connection to any of the applications, storage, databases—any technology—that a customer could have.

2) The next step is to integrate and disaggregate applicable functions. This streamlines operations for optimal efficiency.

3) Then, it is important to incorporate network function virtualization (NFV) to help cut costs.

4) And finally, you need to move to the cloud’s edge. The closer you are to the customer, the better you can provide your services.

With an open, purpose-built network infrastructure, you’re in an ideal position to offer critical networking services. Moreover, this will open up new revenue and new markets, providing the most efficient and effective use of your infrastructure, and—more importantly—increase existing customer satisfaction and loyalty.

To properly combat the revenue drain created by OTT applications, download our white paper today. You will find an in-depth guide to face the challenge in a prepared and intelligent way.

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