OpenCloud ran a great panel discussion event last week entitled “The Stranded Service Provider,” accompanied by a white paper that’s available on their website.
On the panel were myself and:
- Tereza Borges, head of NSN’s next gen applications
- Keith Dyer, Editor of Mobile Europe
- John Logsdon, MD of NetDev
- Marlon Bowser, MD of HTK
- Kris Kimbler, Executive Editor Moriana Group
- Graham Francis, Marketing, OpenCloud
- Chris Haddock, Alliances & Partnerships, OpenCloud
Some quotes from the white paper that explain why operators are stranded include:
- “Service Providers are stranded by a 25 year old operating system. Imagine a web application developer trying to compete in today’s market using Windows 1 as its operating system! The truth is, much of the infrastructure supporting today’s networks is stranded in the mid 1980s. Unfortunately for Service Providers, their customers are living in 2009 and their expectations of Service Providers is increasingly shaped by services on the web (such as Google, Facebook and Twitter) and consumer equipment providers (for example Apple, Sony and Nintendo). Even evolved IN products only pay lip service to IT and web based technologies, yet do not enable Service Providers to play a significant role in the emerging services landscape beyond connectivity.”
- “Change can only come from within, for some Service Providers it will be a stark financial hole in the business model that prompts change, while others will recognise the large gap in their service innovation ability from their customers’ perspective. Both will be adopting processes and technologies to enable them to play a part in the emerging services landscape by understanding developer’s needs, exposing capabilities, enabling service reuse, and leveraging their core voice assets by mashing them up with the web. This will allow them to share in the value created in the new service delivery landscape, and avoid becoming commoditised pipes to the Net.”
The panel discussion covered many issues, such as the failure to launch of IMS, the migration to IP for transport yet the lack of migration for session control. So networks now enable service bypass without putting operators in a position to add value. The role openning the network plays internally (between marketing and network operators) and externally (both strategic partners and third parties), as discussed in this article The Telco API: Potential to raise ARPU by up to 36%.
A point I raised was the responsibility NEPs (Network Equipment Providers) must play in stranding operators. They asked operators to believe not think on IMS which has wasted years, they’ve failed to deliver an integrated, open, standards based application server infrastructure, and failed to help operators manage the risk in migrating their IN (Intelligent Network) into the 21st century. Now blame also lies with operators, but my point was to highlight the critical role NEPs play in rescuing the stranded operator – and hence the importance open, standards based application servers such as OpenCloud play in rescuing the stranded operator.
Your most recent post saying that Telcos need to solve these challenges internally got me thinking about the buy, build, or rent decisions that Telco Executives are making.
BT bought Ribbit, Orange is building it internally, and in the US there are plenty of examples of RBOCs private labeling other vendor services.
I’m spending loads of time thinking about Go-To market maturity models. Keep up the good work.
Thanks Pat 🙂
I hope to get a few more weblog articles out within the next couple of weeks.
What you are describing is very true and I can only relate to it.
By not making certain decisions at the right time, it is now wonder that driven by complelling user experiences provided by devices like the iPhone, telcos are forced to see their value vanish and get limited to data connection fees. Also, the decisions that made telcos adopt or reject IMS have been purely (in most cases) on voice evolution towards IP. Use cases that were more daring and more futuristic have been dimissed due to the uncertainty on business models and business cases. as an example, it was hard to convince anyone in a telco organization about the interest of widgets before the iPhone came out. It is quite ironic to see that Apple for example, managed to snatch those business cases and made them its own…
So is there no hope? Well, there still is but the challenge gets harder on telcos as days go by.
First, on the mass market side, the true potential of convergence hasn’t been unleashed yet. There is room for fancy examples around media sharing that could reuse the big machinery around IMS behind the scenes. Broadband is an asset that needs to be better leveraged to exchange content for example.
Second, interestingly enough, new communication channels appearing on the web could become ravenous towards context-based information. Telcos can help there because they know a lot about their users, much more than they are generally recognized for. So, in some kind of paradox, channels propelled by the Web could indirectly generate telco revenues. And let’s not forget the increasing pressure we are all receiving by regulation authorities to manage user profiles? Who do users trust more to do the job?
Last,on the enterprise side, local support of cloud computing offerings can also create new opportunities in the direction of API’s as you mention but also more along the lines of very streamlined and localized offerings particularly on the SMB market reusing our sales and operations channels.
These are just some additional thoughts…
(PS: these statements represent my personal opinion and not necessarily the official position of my company on such matters)
Great comment! 🙂
On the user profile you raise a critical point. People choose Google to manage their profile, look at Google Latitude. It makes sharing location easy. Operators are very constrained by their regulators on what they can do with the user profile. Regulators can not control Google, so they essentially ham-string the only entity they can control, which results in operators being misaligned to customer expectations.
For user-profiles to become a component of an operators business two things must happen:
1) Operators should use my profile to make the services they currently provide better. For example, my current mobile provider T-Mobile knows I travel extensively internationally, they have never once made me aware of services, offers or products that could make my life easier – this is true for most operators. This should be addressed as a matter of urgency as its an embarrassment to the industry – if an operator can’t eat its own dog food no one else will.
2) Regulators need to understand the emerging threats web-based service providers present, to which they have no control. Regulation should facilitate operators in their competition with Google, not ensure Google wins.