Nokia stated a report it commissioned from Analysys Mason indicates CSPs could reduce their IT costs by about 25 percent over five years if they adopt software-as-a-service (SaaS) models for software delivery and consumption.
The Finland-headquartered vendor noted the projected reduction compares with the cost of the traditional on-premises model where CSPs buy, manage, and maintain their own hardware and software infrastructure.
Mark Bunn, SVP of Cloud and Network Services at Nokia, observed there is a “strong operational and financial case” for moving to SaaS services and away from the “dated practice of buying customized software for analytics, security, and other functions that run on costly, complex, on premise infrastructure ”.
Analyzes Mason cited potential benefits of SaaS including lower initial investment, always having the latest software and being able to launch new services faster.
The research company also found CSP spending on SaaS accounted for 5 per cent of their operational expenditure in 2019, but expects the proportion to increase to 11 per cent by 2023.
Justin van der Lande, research director at Analysys Mason, noted CSPs must consider a number of factors when mulling adoption of new capabilities through a SaaS model.
“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.”
Van der Lande also pointed out SaaS vendors can remove “long-standing CSP pain points” such as having to plan data center resources and manage complex IT environments.
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