At a recent event in Sydney, Telstra, Australia’s incumbent network solutions provider, provided new insights into its strategic activities under its new CEO Andrew Penn. Overall, Telstra’s strategy remains in line with that communicated last year; we suggested then that for European CIOs and technology managers, Telstra represents an attractive network solutions provider for their organizations’ activities in Asia. But Telstra has evolved since then. Discussions with Telstra executives have provided us with new information and have led us to several new observations:
Telstra’s digital strategy is beginning to take shape but remains fragmented. Like many other telcos, Telstra has created a digital division to develop digital retail offerings for SMBs and consumers. In its current shape, this approach carries some risks, as Telstra’s Global Enterprise Services and Software divisions are also pursuing separate digital activities. As a result, duplicate and potentially contradictory digital offerings could emerge. Although Telstra claims that it is coordinating these activities, the current set-up underlines the fact that Telstra doesn’t yet have a digitized strategy; it is instead pursuing several digital strategies. This could cause confusion for customers, inefficiencies for Telstra, and flawed end-to-end customer journey mapping, thus undermining the value that Telstra can deliver to CIOs as a business enabler.
I believe that network-as-a-service-type offerings — where customers can control the provisioning and characteristics of their network transport services — will have a long-term impact on those enterprises undertaking digital transformation. Businesses that fail to recognize the significance of quality network infrastructure will undermine their digital business strategy. Secure, stable network connectivity is a prerequisite for using cloud, mobile, big data, and Internet-of-Things (IoT) solutions. As the business technology (BT) agenda gains momentum, CIOs are looking to technologies like virtualization and cloud that create agility by dynamically responding to business conditions. Network infrastructure has been a laggard on this score — until now.
AT&T has unveiled its solution, Network on Demand. It’s the basis for a new category of services aligned with customer requirements, including self-service access, control, and configuration of network bandwidth and features like security, routing, and load balancing. Network on Demand:
Gives customers control of network services. Network on Demand offers a completely different customer experience regarding network provisioning. Near-real-time provisioning via a self-service portal makes the customer’s network responsive to business needs.
As you’re all well aware by now, a perfect storm of technology innovations — including cloud, analytics, mobile, and social — is fundamentally disrupting the way your company engages with its customers (as well as employees and partners). For service providers in particular, the main challenge is understanding how to best leverage these technology innovations to remain relevant and ultimately generate more business value. So it’s exciting to see a service provider like Cisco Services come up with new offerings that respond to this challenge in innovative ways.
I met with Cisco Services Asia Pacific Japan and China (APJC) executives last week in Seoul to discuss their strategy in Asia. I wanted to highlight a few takeaways that I believe will be important for sourcing professionals in Asia and beyond:
Cisco Services is a key enabler of Cisco’s overall transformation. Cisco Services used to be a captive consulting organization providing support and technology services for a product company. In a recent analyst call, John Chambers identified Cisco Services as one of the main levers that will help Cisco transition from a transaction-oriented to an annuity-based business model and help the company become the largest IT company globally. The company’s aim is for Cisco Services to represent 24-26% of total revenues in the next 3-5 years. These goals are extremely audacious; achieving them will require huge efforts from Cisco, including some targeted acquisitions in the services space.