Over the last couple of years, North American telecom, media and entertainment enterprises have navigated through inflation, continued competition, regulatory hindrances, layoffs and disruption of business models. With the widespread rollout of 5G and fiber-tothe-x (FTTx), growth in data traffic continues unabated. Enterprises are balancing variety, accessibility and quality of content with freemium models. Technological advancements have however reduced data carriage costs, accommodating users in a regulated industry where spectrum and customer attention are always scarce.
As enterprises compete and cooperate for the same price-conscious subscriber, the need for one platform, one bundle and one subscription has become paramount with product simplicity and consistent service quality. With 5G monetization still underway,
most connectivity spend by enterprises is being repurposed and remodeled to embrace the shift from product-based to platform-based business models, which are collaborative, interactive and responsive. Connectivity has emerged as a foundational enabler of digital initiatives and a catalyst for CX, from mobility to secured cloud platforms to industrial IoT and smart homes. This connectivity glue enables the digital world with distributed cloud and edge platforms
Under current operational, business and macro-economic conditions, more for less has been the operating mantra of the industry. As the telecom, media and entertainment (TME) industry transforms itself by adopting alwayson service delivery and operating models, including outcome-based, customer-centric models, cloud adoption within the industry is expected to increase for core and non-core functions. The use of AI-assisted and cloudgoverned assets, more so at the edge, will rise to manage, optimize, secure and monetize disparate IT and business assets in the forthcoming years. Further, cloud aggregation and infrastructure disaggregation will become table stakes for TME enterprises. The rise in
the development and migration of cloud-native applications in core business and functional areas will necessitate the use of microservices, containers, open source and DevSecOps. In a hybrid or multicloud setup, tight coupling between business, network and IT teams becomes critical as enterprises transition from a traditional company to a tech-company.
The need for collaborative R&D, upskilling and cross-border talent movement remains pertinent. With joint standards development, cloud-led alliances and interoperable assets, investments in cybersecurity and new-age technologies such as extended reality, antiad-blocking, Wi-Fi 6 and 6 GHz spectrum co-existence with cellular bands, automated journalism, and wearable and AI-driven video creation will become the new norms.
In all cases, the data quality with continuous content curation and collaborative data sharing holistic governance will dictate the adoption of new age technologies such as blockchain, non-fungible tokens (NFTs), secured Web 3.0 marketplaces, and uniform environment, social and governance (ESG)-led initiatives. The existing regional differences in data privacy and security regulations among the U.S. and various countries will likely lead to federated AI and data frameworks.
An integrated data platform that leverages AI- and ML-based end user and network data is crucial. This platform, or the digital twin of the network, has several benefits TME enterprises:
Implications for service providers, this would indicate that emphasis on agile architecture and operations strategy, design and execution of technology services is paramount. Providers will need to leverage hybrid, multi cloud, multivendor, multi-technology and multiconnected assets using full-stack development and support capabilities. In a tough operating climate for TME companies, where customer requirements change rapidly, providers are expected to implement automation for process optimization, free up monetary resources and speed time to market by using real-time, edge-based analytics as more processes are deployed at the edge.
A unified system of record to enable single-pane-of-glass observability with layered security is equally imperative for CXOs, with a preference for partner-based models that drive efficiencies, provide flexibility and are user- or customer-centric. This will propel the use of generative AI (GenAI) across customer, product engineering, enterprise servicing and partner management.
Collaborative risk management techniques in an ecosystem will likely enforce the use of standardized tools where ethical AI and ML modeling is preferred, lightly governed or regulated (or even crowdsourced) to enable innovation. They will also be used where apps are released based on security posture mandated by clients. As trust-based systems pave the way for a superior customer experience (CX), a healthy mix of insourced, acquired (from clients or global captive centers), re-shored capabilities and outsourced functions are needed to balance the reuse of assets and build differentiated intellectual property (IP) and skills. Citizens Broadband Radio Service (CBRS) in the U.S. is the best example of leveraging shared spectrum by operators such as Federated Wireless with neutral host push. Still, there are others, such as the Ofcom-sponsored model in the UK, for telecom providers (telcos) to lease unutilized spectrum in local areas to interested third parties.
The use of open innovation models and bolt-on complementary acquisitions will also likely be encouraged by U.S. and Canadian TME enterprises. ISG notes the following trends and imperatives for service providers catering to the telecom vertical evaluated in the study:
Providers must be quick in integrating cloud connected ecosystems for cross-industry transformation and monetization. IBM, for example, has used AI and automation to build service wrappers on top of core business functions by leveraging ecosystem partners. Data-intensive and AI-driven industry use cases such as business support systems (BSS) app modernization, and video management are sandwiched between these ecosystem partners (who continually innovate) and proprietary infrastructure platforms (which drive standardization) to enable value creation for the telco-to-techco transformation projects.
Most providers are quick to release use cases backed by previous AI investments. They are now riding the Gen AI wave with accelerators used for various use cases such as software development, user support for billing/loyalty, weather forecasting, customer sentiment analysis for call centers, faster visual inspection for tech services firms boosting ecosystem services and others.
With 5G mmWave and fixed wireless access (FWA) expansion in the U.S. and Canada, virtualization and edge computing are driving hyperautomation using hyperscaler platforms. ISG sees the rise of selfmonitoring, self-configuration, self-healing, self-optimization and self-evolution of telco network infrastructure. These techniques simplify network architecture, employ autonomous domains and automate intelligent business and network operations with SD-WAN, SASE and private networks, enabling closed-loop control and insights for digital businesses.
As per ISG’s network transformation survey (n=199 global enterprises) in 2023, 75 percent of enterprises mentioned network security as the number one priority until 2024, followed by cost optimization and modernization. As a customer-centric industry, protecting consumer data backed by the laws of the land, securing communications channels, preventing service disruptions and adapting to new threats are much needed by telcos.
Trusted digital entities with blockchainenabled micro-transactional flexibility are needed to tackle fraud across the network (5G) and endpoints as well as cloud, identity and perimeter. As service providers target DevSecOps for operations, the focus needs to be equally developed on architecture agility based on threat modeling, baking in security user stories, morphing chaos engineering in pre- and post-production systems. ISG notes the following trends and imperatives for the service providers catering to the media and entertainment vertical in the study:
The use of data platforms is democratizing access to insights fueled by cloud migration. Content Delivery Network (CDN) use cases that include edge, security, video and other API sets will continue to enable remote, mobile or cloud production. Remote integration capabilities on the cloud will enable real-time polls, chats and Q&A sessions during live broadcasts, enhancing fan and user engagement.
As the focus on metaverse and Web 3.0, content platforms and spatial computing rises, the GenAI movement supports a creator-based platform economy, which further improves the automation of non-strategic and repetitive tasks. However, for artificial general intelligence to permeate within the media and entertainment vertical, data collection (wherever and whenever required with user consent), non-biased algorithmic developments and cognitive architectures need to be fused with self-supervised learning, common-sense reasoning and multi-modal learning (where video contributes equally with text and images).
Providers must focus on non-traditional domains such as eSports along with podcasts, radio and other audio content assets. Cloud gaming services are gaining traction, allowing clients to stream games to various devices. Hence, platform compatibility and SDK engineering are necessary capabilities to drive cross-platform adoption and monetization. The contours of the telecom, media and entertainment industry finally depend on how disruptive technologies can enhance the CX to provide continual feedback to the network and service operations teams.
As the need for observability rises with more network resources being deployed at the edge, operational complexities are expected to increase with bundled offerings blending security, collaboration and intelligent connectivity. Hence, a healthy mix of insourcing and outsourcing ITS and BPS functions is critical to balance costs, customer centricity, strategic vision, IT-OT convergence and core operations.
TME companies focus on f lexibility, customer centricity, innovation and security. Providers are embracing new-age innovations with pre-built best practices and fusing their partnerled transformation models based on modularity, security and AI-led automation for cost-effectiveness, differentiation or both. Ultimately, the digital transformation of TME enterprises depends on scale, uniqueness of offerings and growth rates attached to their portfolios and markets.
Definition
Telecom Intelligent Business Process Services (BPS): Covering business consulting, product, and service strategy support functions along with infrastructure, product and service lifecycle management functions cutting across network, service, and resource operations that include fulfillment, maintenance, assurance, billing, sales, monetization and revenue management. Covers co-innovation aspects, platform-centric self-serve approaches with industry 4.0 offerings, ESG-led initiatives and enterprise business and IT support that includes risk, procurement, HR, F&A, billing, procurement, and value-led domain services that may sometimes contain development and maintenance activities with analytics, cloud and Gen AI for platforms, radio or network solutions.
Telecom Managed and Next-Gen IT Services (ITS): Covering IT consulting, product and service architecture, implementation and maintenance functions along with infrastructure, product and service lifecycle management functions cutting across network, service, and resource operations. The support from core to edge includes operational support system (OSS)/business support system (BSS), fulfillment, maintenance, assurance, billing, sales, monetization and revenue management/ CX.
Also covers enterprise IT support for architecture and technology practices such as 5G lab-as-a-service, 5G private networks with neutral hosts supporting network slicing, data engineering and transformation, cloud transformation, network as a service (NaaS) with observability and DevSecOps automation, open radio access network (O-RAN) for flexibility and proactive management, AIOps/ MLOps with automation/AI accelerators, experience-centric design services, that include new-age practices including CI/CD, DevSecOps, container-led microservices and managed services. Further, digital engineering that encompasses research and design with semiconductor OEMs for IT/OT integration is also included.
Media & entertainment Intelligent Business Process Services (BPS): Covering business, CX and strategy support for functional components such as content production and workflow, media preparation, packaging, curation, content discovery, ad tech, distribution and broadcasting for publishing, streaming and podcasting sub-verticals. Also covers business systems, including ticketing, advertising, supply chain, user management, ad sales, content discovery and content delivery across mobile, web and OTT/video multichannel platforms that lends simplification of search and profitability in operations. The scope includes certain allied services, such as payments, immersive video gaming solutions, data platforms, VFX, conferencing solutions, unified media centers and content management fused with analytics, ESG, cloud and Gen AI.
Media and Entertainment Managed and Next-Gen IT Services (ITS): Covering strategy, IT, integration and maintenance support across the media supply chain, including content production and workflow, ad-tech, rights ownership and royalty accounting, over-thetop (OTT)/Internet Protocol TV (IPTV) platform engineering and management, assurance, media preparation, packaging, curation, content discovery, ad tech, distribution and broadcasting. It also includes non-functional areas such as security, scalability, resiliency, latency and discoverability with test automation suites, SDK engineering, vCPE implementation and edge-focused managed services, hyperautomation for highly agile media architecture, platform/product adoption strategies and operations center support. The focus is also on blending new art-tech solutions (art inventory and collections management) within the interactive media industry with legacy media assets for modernization. For supporting a creator-focused economy, AI and Gen AI use cases for code analysis and synthesis, test automation, content generation and others are also in the scope which aid faster monetization.
Scope of the Report
For the telecom industry vertical, ISG has considered providers catering to:
For the media and entertainment industry vertical, ISG has considered the providers catering to:
All service-led sub-industries under networks, communications, media and entertainment that influence the end customer primarily via audio, video, sensory or haptic experiences are the scope of the study. In this ISG Provider Lens™ quadrant report, ISG covers the following four quadrants for services: Telecom Intelligent Business Process Services (BPS), Telecom Managed and Next-Gen IT Services (ITS), Media and Entertainment Intelligent Business Process Services (BPS) and Media and Entertainment Managed and Next-Gen IT Services (ITS).
This ISG Provider Lens™ study offers business and IT decision makers with the following:
Our study serves as the basis for important decision-making by covering providers’ positioning, key relationships and go-to-market considerations. ISG advisors and enterprise clients also use information from these reports to evaluate their existing vendor relationships and potential engagements.
Provider Classifications
The provider position reflects the suitability of providers for a defined market segment (quadrant). Without further additions, the position always applies to all company sizes classes and industries. In case the service requirements from enterprise customers differ and the spectrum of providers operating in the local market is sufficiently wide, a further differentiation of the providers by performance is made according to the target group for products and services. In doing so, ISG either considers the industry requirements or the number of employees, as well as the corporate structures of customers and positions providers according to their focus area. As a result, ISG differentiates them, if necessary, into two client target groups that are defined as follows:
The ISG Provider Lens™ quadrants are created using an evaluation matrix containing four segments (Leader, Product & Market Challenger and Contender), and the providers are positioned accordingly. Each ISG Provider Lens™ quadrant may include a service provider(s) which ISG believes has strong potential to move into the Leader quadrant. This type of provider can be classified as a Rising Star.
Hitachi Digital Services (HDS) is headquartered in California, U.S. and operates in over 40 countries. It has more than 12,000 employees worldwide. In FY23 the company generated $15 billion from its IT sector. Hitachi Digital combines the strengths of its three business segments: Hitachi Digital Service (data infrastructure), GlobalLogic (engineering and design) and Hitachi Digital Services (OT and IT integration).
Benefits Delivered
In addition to using AI and computer vision with deep learning to recognize everything static and mobile, HDS produces metadata for video content – the basis for various machine-originated actions. It also explores secured edge AI use cases with 5G and human–machine interfaces. Future use cases include edge alerts, eliminating the need for continuous streaming of data. HDS aims to explore joint jurisdictions between public and privately owned video monitoring and recording devices such as dashboards, drone-mounted or smartphone cameras that counter fake videos in a GenAI age. It focuses on enhancing its video capabilities with cloud-native, automated, privacy and security, and sustainable principles.
The ISG Provider Lens™ 2023 – Telecom, Media & Entertainment Services research study analyzes the relevant software vendors/ service providers in the North America market, based on a multi-phased research and analysis process, and positions these providers based on the ISG Research methodology.
Yash Jethani
Deepika
Jeff Cosby
Radhika Venkatachalam and John Burnell
Rajesh Chillappagari
Shona Jacob
Information Services Group Inc. is solely responsible for the content of this report. Unless otherwise cited, all content, including illustrations, research, conclusions, assertions and positions contained in this report were developed by, and are the sole property of Information Services Group Inc.
The research and analysis presented in this report includes research from the ISG Provider Lens program, ongoing ISG Research programs, interviews with ISG advisors, briefings with services providers and analysis of publicly available market information from multiple sources. The data collected for this report represents information that ISG believes to be current as of August 2023, for providers who actively participated as well as for providers who did not. ISG recognizes that many mergers and acquisitions have taken place since that time, but those changes are not reflected in this report.
All revenue references are in U.S. dollars ($US) unless noted.
As ISG’s Principal Analyst and Senior Manager, Yash brings brings over 13 years of experience in consulting, research, thought leadership, corporate marketing, due diligence, account management, and business development. He has worked with consulting/audit, IT services and research organizations in the past, primarily in the TMT vertical. As a lead analyst, he currently contributes to ISG’s Provider Lens™ global competitive research studies. He is also involved in supporting client queries, generating marketing assets for the firm, supporting surveys and leading active discussions in building relationships and driving business outcomes.
Deepika is a Senior Research Analyst at ISG and is responsible for supporting and co-authoring Provider Lens™ studies on Cybersecurity – Services and solutions. She works closely with the Lead Analysts from diverse regions in the research process. She also authors enterprise context reports. She has over 4 years of experience in the technology research industry and has carried out various clientfacing ad-hoc projects across industries such as Automotive, BFSI, and Retail & Consumer Goods. She was also accountable for maintaining a constant eye on the technology market and providing insightful quantitative and strategic analysis to clients through market sector reports. Her expertise spans a wide range of technologies, including IoT, AI, Big Data, and RPA.
Mr. Aase brings extensive experience in the implementation and research of service integration and management of both IT and business processes. With over 35 years of experience, he is highly skilled at analyzing vendor governance trends and methodologies, identifying inefficiencies in current processes, and advising the industry.
Jan Erik has experience on all four sides of the sourcing and vendor governance lifecycle – as a client, an industry analyst, a service provider and an advisor. Now as a partner and global head of ISG Provider Lens™, he is very well positioned to assess and report on the state of the industry and make recommendations for both enterprises and service provider clients.
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services across multiple geographies globally. For more information about ISG Provider Lens™ research, please visit this webpage.
Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digitalready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit isg-one.com.
ISG Research™ provides subscription research, advisory consulting and executive event services focused on market trends and disruptive technologies driving change in business computing. ISG Research™ delivers guidance that helps businesses accelerate growth and create more value. ISG offers research specifically about providers to state and local governments (including counties, cities) as well as higher education institutions. Visit: Public Sector. For more information about ISG Research™ subscriptions, please email contact@isg-one.com, call +1.203.454.3900, or visit research.isg-one.com.
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