White Label Cloud
Given our starting point, one of the inquiries we field every now and then is: ‘why did we opt to go SaaS?’ By not going the B2C route (like Dropbox and OneDrive), we laid out what we believe to be our roadmap to success. With an eye for emerging economies, I’ll take you through the process of why we chose the SaaS route.
What is White Label?
In the mobile carrier cloud space, one word you will hear tossed around quite a bit is ‘white label’. What white label means for us is that mobile carriers can choose to brand our cloud service as their own. The term has roots in the music industry (for those wondering), and basically it’s an umbrella term for products you can brand as your own.
For reference, here’s our cloud offered as Vestel’s Vestel Cloud. By design, you will not find one hint of Cloudike on the website because the cloud has been branded and marketed as if it were Vestel’s own.
When we thought about how we wanted to proceed, we saw telecoms as our best shot at building a sustainable business. For us, these were the points that helped us favour a B2B2C model rather a B2C:
- For a B2C product in emerging markets, new market entry is a very difficult feat: Everything from local partners to marketing has to be done from the ground up – even finding someone on the ground to manage all these things is a hurdle.
- Mobile carriers have an existing customer base: This means we can bypass any need to spend tremendous capital on marketing, ads, and other methods to acquire users.
- ARPU in emerging markets is not particularly high: E-commerce still a relatively new concept for many in the emerging market and given lower incomes, consumers are not racing to spend money online. With mobile carriers however, spending on cloud services could instead be bundled with their mobile phone billing; a process most consumers are already familiar with.
Why the Emerging Market?
From a market standpoint, we found that mobile carriers in the US and Western Europe had adopted cloud services already and that companies were fighting tooth and nail for opportunities.
On the other hand, we examined emerging markets and saw the increasing rates of mobile and internet connectivity. Both of which were very promising.
If you take a look at this report by the Asia Cloud Computing Association in 2016, nearly every emerging economy has some variation of a Government assistance program that aims at increasing web infrastructure and connectivity. Given research that points towards connected users naturally inclining towards cloud services, we knew it was only a matter of time before these markets reach potential.
Take into consideration that one of the few entities in emerging markets that can afford data centres to install cloud are mobile carriers. If you can put two and two together, you can see our thought process three years ago.
So when you factor in the new market entry requirements plus the infrastructure hurdle, the logical direction for us was a cloud platform for mobile carriers.
However, unlike B2C or even SMB B2B, signing a mobile carrier to a service is a far more difficult endeavour. As you can imagine, entities with 100,000+ customers are not going to be easy to sway.
Even as we have refined our pitch to mobile carriers on how to best roll out our service, signing a client is still a ~8 month process. Even with references from other telecoms and major OEMs, there are still many hoops we have to jump through before we have everything ready to go for mobile carrier customers. This includes everything from software security tests, implementation timeline, and of course the contract negotiations themselves.
That said, we take the wait time as a cost of doing business. Given our product and where we like to operate, we have no doubt that our way is the most secure and success-bound path.
I think if there’s one thing we’ve been sure of, it’s the fact that our built three years ago, was the right one. We’ve found the mobile carriers who’ve found a need for cloud in emerging markets and we’ve discovered that trends such as the adoption for cloud, has proven true as evident by our business pipeline.
While we still believe our product has many innovative upgrades to come, we feel that SaaS in emerging markets model thus far has been the right one.
By Max Azarov