Telecommunications providers are facing pressures to adjust their production models while markets are changing and cloud service models are spreading to their business areas. The Telco Cloud platform model was designed to respond to these forces. The Telco Cloud is a cloud computing platform that is intended for virtualized network functions. The platform meets requirements of the telecommunications market and regulations. A cloud based production model is a new concept in the context of telecommunications services, hence, the field of the Telco Cloud is not yet well researched area. Furthermore, the cost structure and strategic implications of the Telco Cloud platform are still poorly understood. This empirical research uses a single company single case study approach to examine the Telco Cloud paradigm, cost structures, processes and strategic implications by using qualitative and explorative analysis methods. The data collection was done using literature review and interviews. The literature review revealed that very little research is done on the field. Furthermore, eight semi-structured interviews were carried out with persons in managerial position. These experts were working in the Telco Cloud project in the case company and had deep telecommunications industry knowledge. The results of the study indicate that the Telco Cloud benefits improved investment efficiency due to a server virtualization and consolidation compared to the traditional platform model; high level of automation and server utilization are key features to achieve benefits; increased personnel costs in the software development and communication are prolonging the break-even point; and the platform takes advantage of the network effects and the Telco Cloud eventually shall improve significantly operator’s cost efficiency. This research aims to provide a base for further research. Furthermore, the research contributes the application on-boarding process that can be used for managing the complexity of a Telco Cloud deployment.
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