There are rumors that the telcos might sweep up some hosting companies the way they’ve swept up cloud providers. That’s a reasonable guess, but not because they need the servers.
Telcos know that they can provide better IT economy of scale off future service-layer IT deployments than any cloud or hosting vendor could. What they want is the customer base. Whatever the return on server investment for hosting/cloud companies might be today, it’s high compared with a telco ROI. Add to that the fact that the telcos could create the same hosting service at a lower base cost and you get a pretty nice profit picture.
The growing and more visible interest of telcos and cablecos in the service layer is creating some fear and uncertainty among over-the-top (OTT) players. Netflix, whose delivery model adds to operator costs while competing with operator TV strategies, is saying it doesn’t want to see the telcos hurt. As well it shouldn’t, but it may be too late at this point.
With revenue-per-bit declining, there’s nowhere to go but up in a service sense, and that means increased competition with the OTTs. It also means more spending on the service layer and less on the network, as well as more focus on service integration with the network as a strategic differentiator in both services and networks, capex-wise.