Cost Modeling of a Network Service Provider Cloud Platform

The cloud service model is spreading into the telecommunications industry, forcing the telecommunications providers to adjust their production models. The network service provider cloud platform, also called as Telco Cloud, utilizing a cloud based production model, is a solution to respond to the changing market forces. The cloud based production model is a new concept in the context of telecommunication services and the cost structure of the network service provider cloud platform is poorly understood. Thus, this empirical research uses a single company single case study approach to examine the network service provider cloud cost structures and constructs a cost model to network service provider cloud by using semi-structured interviews. The results indicate that the network service provider cloud improves cost efficiency compared to the traditional platform model due to server virtualization and consolidation. The contributed cost model can be used for analyzing feasibility of an application on-boarding in network service providers that are utilizing cloud platforms for the communications services.