Posts Tagged ‘telecoms’

Jobs in the key of E

October 19, 2012

Taxi please

What we know as the ‘telecoms’ business is an intriguing game — saddled with 100 years of doctrine and fraught with modern identity crises, but also rich with opportunities for those capable of seizing them. As the dividing lines between Telco, IT and Media become fuzzy, new players emerge and incumbents are forced to adapt, continually reshaping our idea of what it means to be in the industry. This is why I find Service Providers such a fascinating area in which to work right now. It’s also why I’m delighted to be joining the EMEA Service Providers team at EMC as Senior Technology Consultant.

For those who know me mainly from my background in IP networks, or have a less than broad understanding of EMC, this may sound like a curious move, so I thought I’d explain a few of the reasons behind my decision and how it aligns my job with what I believe about service providers and their future.

We live in the wake of relentless commoditisation: a new era of large scale utility computing, a subsequent phase of war in the industry, and software continuing to eat everything else for lunch. Spending time with colleagues, customers and vendors, I often find myself thinking about these issues and the fundamental changes that are happening in the way we consume IT to get things done in our lives – it seems clear that the future power, relevance and profitability of many organisations will depend on how they respond to this stuff.

Cloud is replacing products with services, throughout the entire IT stack. As value chains evolve, previously solid business models are starting to look a little wobbly. Looking around the workplace we see business productivity gains being delivered from everywhere except the IT department. Incumbent service providers and vendors need to pay close attention to these changes and their impacts.

When it comes to steering through waves of change in the industry, EMC seems to be one of the few big vendors that is consistently smart at the top level. The company plays a strong strategic game and is always thinking several steps ahead. They’ve got an impressive track record of shrewd moves and timely acquisitions, with a diverse collection of technology under their umbrella.

The EMC and VMware magic trick is knowing how to make the most of today in mature infrastructure markets, making smart purchases to stay at the front, but also having the forethought and discipline to sow seeds for tomorrow, such as the Cloudfoundry ecosystem, that with sufficient nurturing will help the business reach escape velocity from past success.

EMC’s appetite for the long-term view was recently underlined by Paul Maritz, a big-time advocate of developer-centric thinking, moving from VMware to become EMC’s Chief Strategist. Interestingly this is the same man who “was prepared to stand in front of VMware’s core customers (IT ops people) and tell them they were not where business value lies” (redmonk.com).

The EMEA SP unit is quite a fresh venture and I’m excited to be on-board, with the chance to build relationships and understand the businesses of some major EMC partners and customers. I’m sure we’ll be having plenty of fun juggling the assortment of opportunities and threats in the service provider space, the legacy and the next generation technologies, the old business models and new ones.

So with sadness I bid farewell to Exponential-e, on my last day here, having worked with some great people and experienced so much change along the way. I will continue to watch the company’s progress with interest.

See you all in EMEA…

 

Opening up networks (Part II): Creating new value in the enterprise market

November 23, 2010

One obvious, ongoing trend amongst enterprises is the desire to consolidate technology and communications suppliers. In all businesses, the IT Directors and CIOs long for a more simple life; fewer vendor relationships to manage and just one bill for everything. So understandably, becoming a one-stop shop for all managed services is something to which all vendors now aspire.

We now have both feet firmly in the 21st century and, in our new IP-everywhere world,  a clearly horizontally divided communications market has emerged in which “cloud” is the buzzword du jour. The world is full of IT outsourcing companies and systems integrators vying for enterprise business, but none of them run their own carrier  networks. They consume the services of  network operators (the guys who shuttle your packets), who in turn are supplied by network owners (the guys who dig up the road).

Have you ever thought about just how much cost is incurred by support inefficiency in the standard carrier wholesale or reseller model? When building large scale enterprise solutions, things can sometimes get a bit silly:

  1. Network owner A selling Layer-1 infrastructure and supporting network operator B.
  2. Network operator B selling wholesale to operator C and supporting them.
  3. Network operator C supporting their channel partner, IT services company D
  4. Service company D supporting their enterprise customer.

From the point when the end user initially reports an issue to their provider D, just how much delay, human error and eventual customer agitation is introduced, with each additional support ticket that gets logged down the chain?

There is so much operational overhead, conflict and support headaches when human NOCs are chained together. The poor end-customer, being very far from the engineer who will eventually diagnose the fault, ultimately has a very poor experience during the resolution process.

If the cloud is really about enabling access to cheap data, to create value, can operators develop smarter wholesale services to improve efficiency and customer experience? What use is there for abstraction layers to unlock internal management data?

Imagine an operator offering a white-labelled transport network for a large managed services or outsourcing provider. This would take ‘wires only’ to the next level by removing not only customer IP router management, but also something else that a ‘one-stop shop’ shouldn’t really need: human NOC eyeballs performing routine 1st line monitoring and support of all those VPNs, tail circuits and network termination devices.

It seems to me that large systems integrators could utilise APIs to operator assets, running their own software tools, pulling data directly from their core services and customer edge devices.

The key to making the operator value proposition unique here is in removing the friction that normally occurs when the outsourcing provider is supporting their end customers. The provider also has the ability to use the management data in a way that suits them. Global systems integrators have their own route to market for large contracts,they just need a network component in order to build a solution.

Conventional wisdom amongst network operators is to attempt to offer more service wrap to customers, not less. There is a common fear in the industry that now dissuades all operators from concentrating on what they do best, which is delivering bits. Nobody wants to miss out on what is perceived as the smart, high margin business – the “value-add” in managed services. I think it is worth taking time to question this view, for there are other ways to make ourselves invaluable to our customers.

Network operators are the communications enablers that sit between solutions providers and end-user businesses. Surely there is some way to offer more value here by selling intelligence, not just capacity. This kind of smart wholesale looks like an exciting opportunity to me.

Opening up networks (Part I): There’s nothing wrong with being a plumber, if you have a really cool toolbox

August 25, 2010

 

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Mark Twain

The Internet has developed an annoying habit of eroding 20th century business models that were based on the artificial scarcity of some resource or service. The music recording  and newspaper industries have been grappling with this difficult truth, because their business was based on the belief that the media distribution mechanism was what had value. The whys and wherefores of these economic effects are an extensive and widely discussed topic, so you can do the research if you’re interested, but while we’re on this subject I’d like to highlight one of the best articles I’ve read recently: Jeff Jarvis’ summary of how the relationship between privacy and publicity has now inverted.

So anyway, back to data pipe operators. There has been a storm brewing for the last decade: I’ll just recap on the main “threat” for the benefit of anyone who isn’t familiar with this topic. In telecoms we have an industry built historically on voice and messaging services. Direct user-to-user services. The IP revolution, and convergence of all services onto this medium, has meant the end of vertically integrated services that are tied to the network. When communication services become decoupled from the transport network the old-world services lose their scarce status. Do you remember the news headlines when Skype began to get popular? Just wait and see what happens after today’s Google Mail “voice” kick-off.

Traditional voice minutes make juicy profit margins, whilst the data offerings that replace them do not. We have a digital communications industry converging on a commoditised data transport layer where price is the only key differentiator.

With the price of data connectivity tumbling, those margins will eventually become, in the words of Mr Creosote’s maître d’, “waffer thin”. Meanwhile the delta between data revenue and bandwidth usage is increasingly at an alarming rate, particularly for mobile operators. This is a big problem when you have a one-sided business model, where revenue comes only from selling these products to users.

And thus the scene is set for the following premise:

Long term growth in the telecoms industry will not come from just selling  connectivity.

Telcos’ (especially traditional, retail telcos) have a psychological inhibition – they really don’t want to be straight utility providers. After a century of business as usual, there is an entrenched belief within telcos, almost a sense of entitlement, that they should be the ones selling communications services to end users.  Consequently they fail to concentrate on what they still do best  – delivering bits – and instead we get what Rudolf van der Berg calls Apple and Google envy. The aspiration (as this 2007 Gartner report makes evident) is to be in consumer and enterprise IT “services”. Offering services is cool, being a digital plumber is not.

When the threat of ‘over-the-top’ providers began to take shape, somebody somewhere began talking about telcos being demoted to “dumb pipes”. Dean Bubley has pointed out that whoever coined the term “dumb pipe” has cost the industry untold millions. Indeed this negative response doesn’t get us very far. Particularly when, in reality, what is being threatened is merely the unwarranted assumptions of the industry. One of the knee-jerk reaction of those concerned was to start demanding payment from the likes of Google, on the grounds that they were getting a free ride.

The prevailing trend has been to go on the defensive, rather than changing the mindset of the business by considering the possibility that these threats might actually be perceived as opportunities. I am amongst those who think the industry needs to take a step back and accept that being a plumber is fine, when you happen to be in possession of a very flexible, intelligent toolbox. A toolbox that can create new value from the network and its data, and ultimately introduce new ways of doing business. After all, the network operator has the potential to understand the customer better than anyone, as Alan Quayle is keen to remind us.

Imagine the possibilities that could arise when we create an interface between the transport network, including all the high value data on it, and those who are best at innovation: software developers. In future posts on this topic I’ll take a look at some examples of what might be possible.

 

Chasing the ball

January 26, 2010

Since Tim Berners Lee’s invention first began to attract the world’s interest in the mid 1990s, with a rapid transformation of the public face of the Internet, everyone has been furiously pointing and clicking, and puzzling over how best to make money out of it. The Internet has always been a social phenomenon rather than a technological one. While the underlying layers of technology change imperceptibly, the applications on the surface undergo constant development, recycling and repackaging. For example, twenty years ago Twitter was called IRC and Web Forums were called Usenet. The trends of the day are followed by magpie-minded marketing, business and media folk, like a herd of school children chasing a football around the playground.

Nowadays, in the era of social media, information sharing and collaboration are the key characteristics. As Facebook achieves 350 million users, while simultaneously failing to make a profit, there is something of the old dotcom excitement in the air amongst investors. As John Naughton points out, this seems like “the triumph of hope over experience”. How frustrating it must be to have a user base larger than the population of  the U.S and yet not be able to sell them anything, because their minds have learned to filter out the window dressing of click-through advertising. Meanwhile Google, in the context of search, have bucked the trend and managed to capitalise on Howard Gossage’s classic observation: “The real fact of the matter is that nobody reads ads. People read what interests them, and sometimes it’s an ad.”

But recently some new business models for the information economy have begun to take shape. Firstly, there are new rules to be learnt by the old guard – the telecoms companies, who have up until now been doing all the heavy lifting between the content providers and their audience. The explosion of Internet video has brought with it a fundamental change in the textbook political hierarchy of the Internet. The Tier-1 cartel of telco giants are losing their edge as the likes of Youtube (Google) peer directly with the end user networks.

As the commoditisation of raw connectivity squeezes the profit margins, the challenge is to start spinning gold not from the network itself, but from the data created as a by-product of the network being used. The data on who the customers are, where they are, who they communicate with, and when they do it. Initially this idea begins to take shape as ‘value-add’ bolt-ons to existing services. Thinking bigger, the likes of  Telco2.0 suggest that telcos could act as mediators of trust between these customers.

This week Apple will unveil their new hypebeast. This will be a device where content and connectivity come as part of the package. Is this finally some good news for the newspapers? Purveyors of traditional media have of course always struggled with the idea of an Internet where the owners of the eyeballs don’t want to pay. We have come to expect free service and free delivery, explains Martin Geddes. While Google and Facebook provide us with incredible ‘free’ applications it is worth remembering that we do pay for these, just not with money. We forfeit our privacy and give them our attention instead.