CEM For Telcos: Just Started With A Lot More Potentials

Telcos across the world — and especially mobile operators — are now struggling with increasing network complexity and lower customer satisfaction due to exploding data traffic, decreasing ARPU, and OTTs marginalizing their opportunities to generate new revenues via content. The Japanese market, with one of the highest ARPUs, has been the battlefield for technology providers to offer local telcos to services their high-value customers in a country where people have very high expectations of telecommunications services. Two weeks ago, I participated in Nokia Networks’ analyst days in Tokyo and was interested to see how the company has increased its share in Japan in the past couple of years. To continue its success in the age of the customer, Nokia Networks must help Japanese telcos better win, serve, and retain customers.

Two days of briefings and discussions convinced me that Nokia Networks’ must address three critical items to maintain its leadership position in LTE radio in Japan:

  1. Optimizing its networks to make its coverage and performance the best it can be in this very high-density market.
  2. Introducing customized features from its Japan R&D lab to meet the most demanding operators in the world.
  3. Helping telcos meet or overfulfill their customers’ expectations via a customer experience management (CEM) solution, although the revenue contribution is much smaller. Obviously, what customers experience and perceive are what really decides how effective all of the network improvements have been.
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Are Hong Kong And Taiwan Losing Out In The Age Of The Customer?

In the past three weeks, I’ve been in Hong Kong and Taiwan; several things that happened while I was there led me to think about their competitiveness in the age of the customer.

I was in Hong Kong to moderate three panels at a CIO summit. During a break, I chatted with a Singaporean CIO who’s been working in Hong Kong for 15 years but is thinking about moving back. We discussed the recent criticisms of mainland Chinese who allow their small children to pee by the curb of main thoroughfares. Hong Kong media and residents have been quick to criticize mainland parents without listening to their explanations that the city doesn’t have enough public toilets and that there are long queues at every shopping mall — hardly a surprise given that Hong Kong attracts more than 100 million visitors from mainland China each year.

Yesterday, I read that Hong Kong’s chief executive is considering limiting the number of mainland visitors to address local residents’ complaints. I wonder what impact passing such a bill would have on the city’s retail revenue growth, employment rate, commercial property prices, attractiveness towards global investment — even its economic freedom index ranking. As my CIO friend asked me: “Imagine what would happen if, for just one day, no mainland tourists came to Hong Kong. What impact would that have on Hong Kong’s retail, property, and financial markets?” I had no answer for that.

On to Taiwan: I was just in Taipei for a couple of days on business. I go to Taipei at least once a year, but this is the first time I’ve gotten the impression that Taiwan is really losing its attractiveness, despite the fact that I really love the city’s culture and food.

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Nokia Unveiling Android Models Represent New Strategies From Microsoft

At Mobile World Congress this week, Nokia announced the first three models of its new Android product line, Nokia X. Nokia X is positioned as entry-level smartphones below the Lumia range that nonetheless deliver a more complete smartphone experience with Android application availability than the Asha range. With both 4-inch and 5-inch screen models, the Nokia Store and Microsoft services will also be available on these devices; Bing Search, Outlook, OneDrive, and Skype will come preloaded. Although I am disappointed with the super-old Qualcomm MSM8225 chipset used, it brings high-quality Nokia products to the Android world at only €89 to €109 before tax and operator subsidies. 

It was not surprising that Nokia started trialing Android models before the Microsoft deal. However, it is interesting to see that Nokia is now not only launching it just to prove to the public that it has tried to do so, but also that it wants to make it a serious strategy. What does this mean when we are expecting the Microsoft acquisition to complete in just merely a month? And why did Microsoft approve it? Some possible reasons why:

  • Microsoft can’t yet deliver a good Windows Phone experience at the low price points they want to hit. Now it can — by using Android and old, low-cost chipsets.
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Announcing Speakers For Forrester's Summit For Marketing & Strategy Professionals, APAC 2014: March 19 In Shanghai!

Improving the customer experience is the path to achieving business results. In these challenging times, there’s nothing more critical for marketing and strategy professionals to pursue than the customer experience. At our Summit in Shanghai next month, we’re eager to discuss the theme of “Driving Digital Customer Experiences In A Slowing Chinese Economy”..I’m proud to announce the illustrious list of speakers we have pulled together for this year’s summit:

Kicking off the agenda for the day, Harley Manning will speak on customer experience innovation and sizing disciplines that companies need to consider Harley is the co-author of Outside In, Forrester’s book about the customer experience that draws upon 14 years of research. At the summit, Harley will also officially launch the Chinese version of Outside In in conjunction with our publishing partner CITIC Press, a leading business and financial publishing house in China.

China is forecast to become the largest eCommerce market in the world. Zia Daniell Wigder, Vice President and Research Director at Forrester, will address China’s market potential and speak about “Creating Customer-Centric eBusiness Experiences.” Her session will explore opportunities to build successful sales and service ecosystems in China, including what the age of the customer means for Chinese eBusiness customers, and explain how digital tactics are essential to creating customer-centric eBusiness experiences.

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Forrester's Summit For Marketing & Strategy Professionals APAC 2014: Drive Digital Customer Experiences In A Slowing Economy

As the second largest economy in the world, China is moving toward digital faster than anyone can imagine. The number of online buyers in China alone will reach 356 million in 2014 — surpassing the total US population. In addition, the value of China’s online retail market reached $294 billion in 2013, the first time it’s ever taken over the US market, which is estimated at $262 billion. However, the experience that Chinese consumers are receiving in digital media, either on PC or mobile, is still far behind many mature markets.

At the same time, the Chinese economy is slowing down; annual GDP growth will slow from 10% in 2010 to a probable 7% in 2014. The slower economic growth is a challenge for multinational companies and local enterprises to win customers, be it in tier one or tier six cities. Under such circumstances, we believe that China has entered the “age of the customer,” which Forrester defines as “a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.”

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China Tech Market In 2014: Five Key Predictions

Since 2012, China has become the second-largest economy and third-largest IT market in the world, but IT spending per capita in China is still less than 5% of US. The potential for IT spending growth is obvious in the coming years. For CIOs in China to succeed, they need to go beyond retaining “control” of technologies to focusing on retaining and winning customers.

Forrester recently published its technology predictions for Asia Pacific in 2014, highlighting to technology professionals that the ability to embrace the age of the customer will determine success or failure of an organization. We believe that we have entered “a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.”

In particular, CIOs in China should take note of the following five key 2014 predictions:

  • Technology spending is slowing down in China and local vendors will gain share. According to my latest China Tech Market Outlook: 2014 report, Forrester estimates that China’s enterprise IT purchases will grow by 6% in 2013, to RMB 698 billion, and a further 8% in 2014, to RMB 752 billion. This is slower than then 11% growth in 2011 and 9% growth in 2012. The new government is focusing on economic reforms to overcome both internal and external challenges. In the meantime, local vendors like Huawei, Inspur, and Lenovo will likely benefit from the NSA/Snowden issue; they will gain share mostly in the hardware space, including server, storage, and networking, in 2014.
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Chinese Government Raises Security Concerns for IBM, Oracle and EMC

On August 16, a branch of the Chinese government said it would investigate three large U.S.-based technology firms due to “security concerns”, naming IBM, Oracle and EMC.  The move – feeling somewhat similar to the US government’s security concerns on Huawei – is the first time Chinese government officials have openly addressed this issue.

However, this issue extends beyond IBM, Oracle and EMC. There is talk that Chinese government entities and state-owned enterprises (SOEs) will begin to shun foreign IT vendors in their IT environment, and instead replace them with local vendor solutions.  A number of foreign vendors are already feeling the heat.  In Cisco’s FY13 Q4 financial statement last week, its China bookings declined 6% YoY.  We have observed similar trends for IBM in China, and believe it is a headwind that will challenge MNC vendors to further expand their China businesses. 

While it has never been confirmed officially, the latest development seems to suggest the possibility of the Chinese government formalizing it as policy. In the past couple of months, I have already seen SOEs seeking out local suppliers, like Huawei, Inspur, Lenovo, and ZTE. The primary considerations were:

·        CIOs are concerned that critical business and customer data might be compromised after the Snowden revelation.

·        CIOs are cautious about holding off buying foreign equipment, pending new governmental policy in the coming years.  Hence, they want to prepare to protect their current investments.

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HUAWEI’S NEW SWITCH LOOKS PROMISING, AND ITS STORYLINE NEEDS REINFORCING

by Clement Teo, Bryan Wang, Katyayan Gupta (this blog is also published by Clement Teo)

We recently met with Huawei executives during the launch of its latest product in China, the S12700 switch.  The product, which ships in limited quantity in Q1 2014 is designed for managing campus networks, and acts as a core and aggregation switch in the heart of campus networks. While wired/wireless convergence, policy control and management come as standard features, the draw is the Ethernet Network Processor (ENP). The ENP competes against merchant silicon in competitive switch products, and Huawei claims to be able to deliver new programmable services in six months, compared to one to three years for competitive application-specific integrated circuit (ASIC) chips. This helps IT managers respond quicker to the needs of campus network users, especially in the age of BYOD, Big Data, and cloud computing.

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Microsoft’s Surface Promotion Signals the Growing Importance of Tablets in Chinese Schools

Microsoft recently announced an education promotion for its Surface RT tablets that offers deep discounts to schools and universities.  Under the program, Microsoft will offer Chinese students the 10.6” Surface RT tablet at $199 (versus a list price of $499), with official Office applications standard.  With e-education a critical part of education reform, Forrester sees two key trends driving strong tablet adoption in the education sector:

·       Continuous government investments in e-learning.  At both the central and local government levels, e-learning programs are underway to improve students’ information literacy as well as narrow the education resource gaps across the different regions in China.  For example, the “Digital Education Resources Full Coverage Project" was launched in November 2012 by the central government with funding of RMB 308 million ($49 million) to equip digital education devices for teaching venues across China.

·       Explosive growth in tablet adoption.Forrester forecasts the number of tablets for business, government or educational use to increase from about 19 million in 2012 to more than 83 million in 2016 in APJ, with China as one of the key growth engines. Noticing this growing opportunity, multiple city governments (e.g. Beijing, Shanghai, Nanjing, Guangzhou, etc.) have announced projects to purchase tablets for students’ usage in class.

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Leverage mobile payment deployment to support expanded business in China

 

In China, mobile commerce has become one of the top priorities for organizations in retail, hospitality, transportation and other services industries, given the dramatic growth of smartphone adoption and the exploding e-commerce spending. Alipay, the leading third-party online payment platform in China and sister company of the country’s largest C2C website Taobao.com, claims 60 million mobile payment users and estimates 10% of its 2012 transactions were from mobile devices.

In terms of mobile payment, mobile proximity payments and mobile remote commerce have gained momentum through early industry implementations and government support. Starting 2011, the variety of technologies and platforms available in the market has grown significantly.

Under such circumstance, many IT organizations are interested to understand more about the landscape of the mobile payment space. They are also seeking information about the multiple platforms that will be enabling them for their corporate mobile commerce strategies, especially considering that the mobile payment market landscape in China is dramatically different from other parts of the world.

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