As digital transformation initiatives accelerate, telcos are uniquely situated to provide the most vital services and solutions to IT organizations. Cloud and security have been the major drivers of IT budgets for nearly a decade, and this is unlikely to change in the near future. Telcos can take advantage of these growth areas due to their long business relationships and their networking roots.
An example of this is Orange Business Services (Orange), who held their analyst days on June 23 and June 24, 2021. Orange is doubling down on IT and integration services, specifically with an emphasis on cloud and security. The goal is to establish themselves as a global network digital services company. While all telcos have similar advantages, Orange has actively tried to leverage that position since announcing its Engage 2025 strategy, which includes the goal of having 55% of revenue coming from IT services and next-gen connectivity by 2023.
Since announcement of that strategy, IT & Integration Services (IT&IS) has emerged as the largest contributing segment to its revenue. Orange has doubled-down on the convergence of network and cloud, end-to-end digital integration, and securing cloud and operational technology/industrial internet of things (OT/IIoT) environments, as detailed in the report, Are telcos ready to go head-to-head with system integrators?, that we published last year.
Orange continues to strive towards achieving its Engage 2025 agenda by following a two-pronged approach: cross-selling cloud and security to existing Orange customers who are already utilizing connectivity and unified communications and collaboration (UCC) services and pushing pure-play services through its initiatives such as Bleu in collaboration with government agencies and its partner ecosystem.
This strategy not only strengthens its foothold in its core market (France) and region (Europe) but also adds to its credibility, as it delivers on large-scale government initiatives and contributes to building the entire digital ecosystem.
Orange serves as an example to enterprises looking to consolidate their IT engagements and provider portfolios. Telcos offer unique advantages including:
- Existing services around networks, voice, and unified communication
- Growing cloud expertise including multicloud and edge cloud
- Implementing cybersecurity encompassing cloud and OT/IIoT security
- Enabling new offerings using SD-WAN, 5G, and smart mobility, which combines mobility and IoT services
Analysis by Swapnil Bhatnagar, Senior Research Director and Gaurav Dewan, Assoicate Research Director at Avasant.