Bundling Telecoms and IT

At the SDP World Summit in Berlin, one of the presentations I’m giving is on M2M (Machine to Machine), a theme in that presentation is the challenge operators will have in M2M is its much more than just the telecoms bit of the problem.  I’ll review that presentation in the weblog summary of the conference later this week.  Rather I’ll share some of my experiences in helping a cloud-based document management start-up called Knowledge Tree, their focus is solely document management for the mid-market.  Its not the consumer oriented file sharing services of Dropbox or Box.net; nor the complex enterprise platforms like Microsoft Sharepoint which require a large IT department and specialist organizations to implement it.  Instead they aim for an easy to use product, that’s well designed and automates the processes found in many enterprises around collaborative document management, its not an insubstantial market, with a total addressable market of $4B.

The ‘collaborative’ word is key, as rarely is a document created and signed off by an individual.  When you examine the processes involved in creating and managing documents within an enterprise it often involves conferences (audio, video and web).  So there is a natural fit between collaboration (a telecoms service) and document management (an IT service.)

Consider this simple use case: Jim (CFO), Sue (Sales), Jane (Operations) and Fred (Engineering) are working on a new contract. Jane is frustrated at how slow the contract editing is taking.

  • Awareness: Jane needs the contract completed tomorrow, but its going to take at least another week.  Jane sees the free document management offer while setting up a conference call for tomorrow using the Telco’s online reservation tool.
  • Interest to Action: The Offer includes online storage and an online document collaboration tool all available for free, with one click Jane’s account is created (as she’s already logged into the Telco’s site).
  • Setup: Jane uploads the contract and invites Jim, Sue and Fred to the service to jointly work on the document (viral awareness).  Jim downloads the tablet app, Sue downloads the smartphone app, while Fred works online from his laptop.  Virally the document management tool spreads within the organization.
  • Usage: Over the day Jane, Sue, Jim and Fred realize the power of document management in being able to jointly edit, comment and share.  On the conference call they continue to use the tool and complete the contract using the Telco’s complete collaboration service, meeting Jane’s goal.

Of course the above scenario is marketing, but the fit between collaboration and document management is obvious.  Knowledge Tree talked with operators around the world on the opportunity of collaboration and document management.  Some operators got it immediately, some were already busy planning such converged offers.  While others talked about the challenges facing Telcos offering IT related services.  Yet those same operators are making large investments in M2M, building divisions hundreds of people strong and even worse building their own M2M platform (yet another silo), where exactly the same issues reside on IT services.

M2M is a large, mature business, it started back in the 1960s.  The wide area (mobile network) piece of M2M is the new kid on the block.  While there’s a mature IT-centric ecosystem supporting M2M, which is focused on numerous verticals.  Check out IBM’s Smarter Planet vision.

Telco has proven successful is selling horizontal services that work across many verticals, e.g. free phone services, telephony, and internet access.  But there’s a change happening as telecoms and IT converge.  I’ve referred to it previously as the ITization of Telecoms.  And what that means is operators need to become much more effective at delivering vertical solutions than simply offering a horizontal freephone service and letting businesses work it out for themselves how to use it.  The same is true for cloud services as well, its just a technology being applied to existing business problems.

Some operators are ‘partnering’ with IT Solution vendors like HP or IBM, but the problem is they’re competitors in the enterprise space around services.  In the limit operators have to build their own value in the enterprise space, rather than sit there with a state granted oligopoly and expect enterprise business to come their way.  Verizon and NTT are two examples of operators that understand this problem and are making big bets to build the necessary IT competence.

Bundling of collaboration and document management should be a ‘no-brainer’, its a quick-win extension to existing collaboration services.  Granted not the size of the M2M opportunity, but the Telco piece of the M2M opportunity is substantially smaller than many think.  And as long as operators continue to focus on technology and not the business of delivering M2M to enterprises they will be relegated to connectivity providers.  As an industry we’ve got a long way to go in delivering the next generation of converged services to enterprises, its going to require a change in culture, a change in how we do business, and an intense focus on the many vertical segments that make up the complex and ever changing enterprise market.  Else just focus on best in class connectivity and restructure for a utility business model.