As we look back on 2015, I see it as a year of change and transition for our business, for our industry, and for our competitors as well as our customers. Competition in the market is being driven by opportunities in hosted solutions and ‘as a service’ offerings, while pure point-to-point connectivity is reducing as a driver of new growth. Cloud-based services began to show signs of long-awaited maturity in 2015. Questions around security and availability have largely been answered, and service provider customers are excited by the opportunity to adopt opex-driven models and to use the freedom afforded by this approach to explore new paths to long-term profitability. There is an openness to cloud-based services such as Infrastructure as a Service (IaaS), Software as a Service (SaaS) and the whole range of ‘as a service’ models. In a similar fashion, software-defined networks (SDN) have accelerated access to bandwidth and computing resources.

Barriers to entry are being rapidly lowered, and service providers should be extremely positive and hopeful when looking ahead to 2016. They have more tools to compete with than ever before and they have the flexibility to evolve and grow their businesses.

I believe these changes will be reflected in the market in two primary ways. There will be a true mindset shift where experimenting and looking beyond a core set of services will be increasingly encouraged, while agility will be rewarded like never before. Organizations that are keen to develop and create the best services in-house may well be usurped by organizations which are more focused on finding and adopting the best services available, including from beyond their own businesses.

Based on this, I foresee three major trends coming to the fore in 2016:

Unified Communications as a Service (UCaaS) will see genuine global growth. Until now, growth in UCaaS has been driven by deployments in North America and Western Europe. That will change in 2016 with service providers in developed and developing markets around the world adding cloud communications to their portfolios and leveraging white label UCaaS solutions to deliver new and innovative services to their customers.

The combination of secure and high-quality voice, messaging, and collaboration tools will drive productivity whilst also simplifying the management and deployment of communications services for CIOs. UCaaS has proven its value and now rollouts will be widespread and enterprises with multiple offices globally will be able to use a ubiquitous range of services across their business no matter where they may be located.

More users in developing markets will have access to Over-the-Top (OTT) video on demand (VOD) services, whilst consumers across developing markets are hungry for video content, and we see a tremendous upswing in opportunities for local service providers to deliver VOD services. Service providers can work with experienced white label VOD service providers to rapidly enter the video market and compete with established OTT players.

Local service providers can deliver OTT video services to users within their territories, thereby creating new revenue streams from video. Otherwise, they face competition from outside players which leverage their infrastructure without making a positive contribution towards sharing revenue. We believe the time to act is now and in 2016 we will see more service providers expanding into VOD services, particularly in developing markets.

Service Orchestration, virtualization, and SDN will accelerate service delivery and modification. In 2016, we’ll see the network evolve from a series of interconnected points of presence (PoPs) to a complete platform for online quotation and ordering, automated provisioning and lifecycle service management. Service orchestration and SDN will reduce lead times for service delivery and give service providers greater control over their network infrastructure.

Bandwidth will move to an on-demand model where modifications to existing bandwidth, class-of-service and compute-resource services can be made via an online self-service portal. This level of automation will enable service providers to tailor their own solutions with a seamless platform that removes the complexity associated with today’s procurement processes. Service orchestration and SDN will put global infrastructure in the hands of any service provider that wants it while virtualization will facilitate near-instantaneous provisioning or required infrastructure elements.

All in all, 2016 will be the year where technology, platforms, and global networks will begin to come together to offer both service providers and enterprises greater opportunities to grow both productivity and profitability. When the barriers to entry are removed, then opportunities are easier to access and more players can be successful in their given markets, which is an important factor in today’s communications market.

Mike van den Bergh
Chief Marketing Officer
PCCW Global