Adopting Telecom SaaS Will Reduce IT Cost By 25%, Spending to Rise to 11% by 2023 – Research

A new research by Analysys Mason has revealed that Communication Service Providers (CSPs) can reduce IT cost savings of up to 25% over five years by adopting the telecom Software-as-a-Service (SaaS) model as compared to an on-premise software model.

But in the case of the on-premise model, CSPs often have to buy data center resources every five years or so and use IT consultants regularly to manage their elaborate IT environments, as per the research findings.

CSP spending on SaaS has increased in recent years, accounting for 5% of CSPs’ operational expenditure in 2019, according to Analysys Mason. This is expected to rise to 11% by 2023, as CSPs continue to execute digital transformation projects.

Findings revealed telco SaaS does the same for software ownership, providing CSPs with on-demand access to the applications they need to run their businesses and networks. Cloud-based software is purchased from a SaaS vendor on a monthly or annual subscription basis, then delivered to CSPs over the internet.

“Care therefore, should be taken to compare not just the licensing costs for various deployments, but also the costs associated with end-of-life upgrades, staffing and maintenance in order to understand the full range of cost savings that can be achieved by using a SaaS-based deployment,” the consultancy firm said in its findings.

Click Here To Read: SaaS, Software Industry to Rise by $16bn in 2020

The research compares the projected reduction to the cost of the traditional on-premise model of software delivery and consumption, which entails CSPs having to buy, manage, and maintain their own complex hardware and software infrastructure.

“In many scenarios, the long-term software costs associated with SaaS can be outweighed when CSPs consider the significant savings that are possible in other areas, as well as reduced time to value for the creation of new services,” said Justin van der Lande, Research Director at Analysys Mason.

“There is a strong operational and financial case for moving to SaaS services today and away from the dated practice of buying customized software for analytics, security, and other functions that run on costly, complex, on-premise infrastructure,” added Mark Bunn, Senior Vice President, Cloud and Network Services at Nokia.