Telenor in the Norwegian Business Cloud Market
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Cloud computing is currently evolving from a vague concept to a set of highly practical solutions in the IT landscape, offering benefits such as increased flexibility, business agility and potentially reduced cost. Current adoption of cloud services among Norwegian businesses is immature, but the market is predicted to grow rapidly the coming years.Today, telcos are being threatened by highly successful over-the-top (OTT) providers, facing severe pressure on their traditional business model and reduced market significance. To address these challenges, it has been suggested that entering the cloud service market represents an attractive opportunity for telcos to leverage existing resources and create new revenue streams.This master thesis addresses Telenor?s opportunities and challenges in the Norwegian business cloud market by taking a resource based view approach. Building on a series of interviews and investigation of relevant literature, the report aims to contribute with valuable insights to Telenor?s cloud strategy and suggests practical implications. TELENOR?S ADVANTAGES AND CHALLENGESThe analysis of Telenor?s resources identifies seven capabilities that are relevant for its cloud initiatives. These are assessed with respect to their value creation and sustainability to determine their strategic importance. Main findings from the analysis are:- Telenor?s sourcing skills, customer handling, integrity, and sales & marketing know-how are sources of competitive advantage. A common feature of these capabilities is their link to both Telenor?s brand reputation and its customer base. - Project management know-how and product portfolio management are vital, but not source of competitive advantage.- Determining stand-alone value of connectivity capability requires further research.In addition, the analysis identifies three main resource gaps that may imply challenges for Telenor:- Lack of innovation capabilities- Lack of cloud know-how- Lack of experience within IT provisioning, system integration and customization Notably, the research also identifies current high profitability on existing products and legacy from traditional telco operations as more overall challenges for Telenor?s cloud efforts. POSITIONING OPPORTUNITIES FOR TELENORBased on the identified competitive advantages and challenges, the report suggests attractive market positions for Telenor. This includes position in the cloud value network, point(s) of differentiation, target customers and ecosystem positioning. The report proposes the following: - The cloud broker role, more specifically the aggregator role, stands out as most attractive role in the cloud value network, with IaaS provider as a possible option or complement.- Superior quality and superior service represent Telenor?s opportunities to differentiate.- Potential customers range from large enterprises and public sector to SMBs.- A keystone ecosystem strategy should be applied to allow successful positioning and manage challenges.PRACTICAL IMPLICATIONS OF FINDINGSThe report highlights the need for Telenor management to clearly integrate cloud computing services in the corporate strategy and to adapt the organization to fit the corresponding requirements. Two business opportunities are presented to show how the findings of the analysis can be implemented in Telenor?s strategy work.1) Targeting SMBs as aggregator with the following actions: - Customer-centered and rapidly evolving product portfolio - Keystone strategy focusing on enabling local customization - Focus on value-adding services to differentiate - Initially leverage existing sales channels, but online presence is key to future success2) Targeting large enterprises as aggregator and IaaS provider with the following actions: - Initial focus on a few robust services to meet high requirements and manifest trust - Include developers, system integrators, consultants and service providers in the ecosystem to complement offerings - Long-term aim of building relevance on horizontal services through leveraging partnershipsFURTHER RESEARCHThe authors suggest several topics for further research, including:- Investigation of the potentials for leveraging network and connectivity resources in a cloud setting, including an understanding of the value it creates for customers- Further assessment of how Telenor can position itself in the ecosystem to seize business opportunities and manage challenges.- Exploration of Telenor?s cloud computing opportunities in other geographical markets.- Further investigation of the Norwegian business cloud market, more directly addressing customers and key success factors, possibly with a quantitative approach.