Poor network infrastructure undermines all digital transformation initiatives. The major technology building blocks affecting digital business are mobility, cloud, big data insights, and social collaboration. Thus, the key contribution to digital ecosystems by telcos is undoubtedly the provisioning of quality connectivity. However, many telcos we speak to have much larger ambitions. Can telcos increase their role in the digital value chain — and if so, how? Several macro-trends have an impact on the potential for telcos in digital ecosystems:
Rising customer sophistication is driving businesses to become more customer-obsessed. Businesses must work with ecosystem partners and vendors to improve customer experiences and drive operational excellence to enhance smart manufacturing, distribution, and supply chains. These operational ecosystems are essential to support the customer in his various life-cycle stages. Ultimately, the future of telcos in the digital context will be decided by their big data, cloud, and service orchestration capabilities.
Poor network infrastructure constitutes a major CIO challenge. CIOs at leading companies must support their organizations to take on the role of major ecosystem hubs with the assistance of mobility, cloud, big data insights, and social collaboration. The value and quality of digital ecosystem membership correlates with the quality of network-based interaction and collaboration solutions.
Orange hosted its analyst event in Paris in July 2015, detailing its Essentials 2020 strategy for business customers. Central to Orange’s Essentials 2020 strategy is:
Pushing its customer experience capabilities. Orange shared its ambition to make its entire organization listen to its customers more effectively. In our opinion, Orange is one of the more CIO-focused telcos. One of Orange’s key goals is to support the CIO in regaining control over technology projects that have been lost to line-of-business (LOB) managers, who launch technology projects outside the CIO’s remit. Importantly, Orange also told us that it is working increasingly with LOB managers.
Driving the cultural transformation of Orange itself. Orange must become braver to disrupt itself. This includes bringing in new perspectives and experiences from outside, including other sectors. There are some encouraging signs that this is beginning to happen. For instance, Orange Business Services recruited its deputy CEO, Laurent Paillassot, from the financial services sector and put the American Diana Einterz in charge of its French Major Accounts.
Enhancing its digital solutions. Orange recognizes the greater role of software and data in its customers’ and its own business models. At the event, Orange demonstrated a number of interesting digital solutions in the Internet-of-Things (IoT), mobile, and healthcare spaces, which equal those of its leading telco peers.
At the same time, for business leaders, having access to quality network infrastructure represents a vital underpinning for their digital business and their long-term competitive advantage. We predict that by 2015 and beyond:
The telco business model will shift from sustaining to enabling critical infrastructure. Traditionally, the telco business model focused on sustaining operational efficiency of network infrastructure. In the years ahead, we predict a shift toward enabling solutions that support telco clients to engage with their customers more effectively. This mirrors not only the CIO’s shift from IT towards business technology but will also be the overarching theme during the transformation of the telco business model.
At the beginning of this year, I took the time to sit down with my colleague Thomas Husson, vice president and principal analyst on Forrester's consumer product strategy team and a specialist in the telecom space, to discuss the top trends that will affect the European telco landscape this year.
Although we believe that the business/consumer split is increasingly vanishing, we decided to split the top 10 carrier themes that will matter in the European telco market in 2013 by enterprise and consumer perspectives.
In the enterprise segment, we see five main themes:
Over-the-top (OTT) and app-based communication services will become part of the IT landscape. OTT voice, social media, and messaging will spread in the enterprise space at the expense of traditional services. Our research shows that professional workers who travel are the most likely to embrace application-based communication services, often irrespective of what their company’s official IT policy is. Still, 2013 will not be the year (yet) that sees rich communication suites (RCSes) becoming a B2B2C communications platform.
Cloud-based enterprise services by carriers will see increasing interest from businesses. Communication-as-a-service will receive increased attention by CIOs as they plan unified communications and collaboration (UCC) projects. However, as our research shows, carriers will not be perceived as the top choice of providers for cloud-based services. Mobile device management firms like AirWatch and MobileIron will offer reselling opportunities for carriers but limit the carriers’ ability to add value around device and app store management. Business models for cloud-based data analytics of end user demand will grow in importance in 2013 but will only begin to materialize on a larger scale in 2014.
Yesterday the Kenyan president broke ground on a new smart city development outside of Nairobi. The site of the new Konza Techno City is located in Eastern Kenya, 60 km from Nairobi on the Nairobi-Mombasa Road. It is 50 km from Jomo Kenyatta International airport and 500km from Mombasa and its ports. The greenfield site, purchased by the Ministry of Information and Communication and to be managed by the Konza Technopolis Development Authority, extends over 5,000 acres.
The primary goal of the new city is to develop the Kenyan Business Process Outsourcing and Information Technology Enabled Services (BPO/ITES) industry – with estimated creation of 200,000 new jobs across the broad technology and related sectors over a 20-year period. But the primary objective is to create at least 82,000 jobs in the BPO sector as this is a key area for Kenya's Vision 2030. The new city will also house a university, recreation and entertainment venues, a film and media center, a financial district, as well as residential neighborhoods and the supporting infrastructure.
Boring as it may appear, the World Conference on International Telecommunications (WCIT), which just took place in Dubai under the auspices of the International Telecommunications Union (ITU), matters to all Internet users globally. To us, the three most important questions that were discussed are:
Should national governments have greater influence over the global regulation of the Internet?
Should over-the-top providers (OTTs) like Google and business networks be governed by international telecom regulations?
Should the underlying business model of the Internet change from a free and neutral exchange of data to a “sender pays” model?
At its recent analyst event, Ericsson outlined its strategy, product, and service ambitions. Ericsson remains the overall benchmark for network infrastructure vendors. The company has a leading market position in the growth segments of mobile broadband and network services and delivers a solid financial performance — despite the disappointing Q3 2012 results. Still, in my view, Ericsson has several challenges that it needs to address:
· The cloud strategy is built on a questionable assumption.Clearly network infrastructure is becoming more, not less, important for cloud-based solutions. Ericsson therefore assumes that carriers are well positioned to be cloud providers. But CIO perceptions suggest otherwise. CIOs tell us that carriers are far from the preferred choice for cloud-solutions (see Figure 9 in the “Prepare For The Connected Enterprise Now” Forrester report). Carriers therefore need help in addressing the potential of cloud computing. For instance, Ericsson’s cloud solutions ought to help carriers cooperate with cloud partners regarding embedded connectivity in devices and applications.
At an analyst briefing in Singapore on November 7, newly minted SingTel Group Enterprise CEO, Bill Chang, laid out his vision on how the group’s reorganization aims to build the foundation for SingTel to become the largest ICT services provider in Asia Pacific in an ambitious five years.
For Sourcing and Vendor Management professionals, here’s a quick summary:
SingTel Group Enterprise: SingTel Business Group, NCS, Enterprise Data and Managed Services (EDMS) and Optus Business (including Alphawest) are now one entity as of 1 Nov 2012.
Converged capabilities: This organizational transformation converges SingTel’s Telco and IT service competencies for a one-stop ICT experience, and simplifies delivery capabilities to enable large scale global deployments. In a nutshell: SingTel is aiming to create a repeatable and more scalable product set.
Carriers have lost a great deal of their relevance for end users. People of all shades, individuals, employees, information workers, etc, are looking for solutions that meet their demand, not connectivity per se.
In our view, four trends matter significantly for carriers since they strike at the heart of their customer facing relationships in the shape of changing end-user behaviour:
Applications have become the focal point for end-users. Phone or connectivity features are less interesting. The carrier brand is not seen as the destination to turn to for app-demand. Merely 18% of business users would turn to a carrier for apps compared to 49% who go directly to the classic app stores. Carriers ought to get closely involved in HTML5 development as it paves the way for OS-independent Web-based apps, thus potentially limiting the influence of operating systems like iOS or Android over the ecosystem. Carries must strive to accommodate where possible app developers to remain somewhat influential ecosystems players.
Users buy devices directly. There is an increasing push by device manufactures (traditional like Samsung and Apple and emerging such as Google, Amazon etc) to sell devices directly to the customer, both business and consumer, and outside the carrier channel. This robs carriers of their main service distribution channel and undermines their potential to monetise value added services.
Carrier-selection is becoming more ad-hoc and temporary. The emergence of embedded software SIMs “interrupts” the relationship between user and carrier. End-users will increasingly be able to select carriers after they purchase a device and for certain circumstances like content consumption or for international roaming. As a result price wars for basic connectivity will increase once again.