Carriers want to take control of cloud services and NEC is going to help them to that by building cloud services for them.
We spoke to Manuel Gallo, senior manager of business development for NEC's EMEA SMB market, and he shared some interesting tidbits with us about this segment.
The SoHo market is big for carriers who, on average, derive 50% of their revenue from that tier. The current downward pressure on revenues for traditional streams like voice and text means that carriers are looking for other complimentary revenue sources.
Which is where cloud services come into play for them. NEC essentially seeks to provide a white-labelled solution to them, acting as a white-label broker for them and offering a marketplace to their customers.
Understand the customer
The Japanese company wants to help operators worldwide deliver a horizontal offering based on a revenue share model by using their extensive, experienced and localised sales force for the hard sell.
SMB customers tend to prefer dealing with one service provider because it is less of a hassle and they are less likely to consider price as less of a priority.
Manuel then went on to say that OpenOffice, the popular open source business suite, was by far the revenue earner for some telcos that had implemented NEC's cloud marketplace solution.
Operators manage to reduce the user churn (which can cost up to $450 per user depending on territories) while increasing the ARPU by offering relevant, deeply integrated services on something that's fundamentally free (not unlike Redhat or SugarCRM).