Total Telecom Congress, day one… what kind of transformation do Telcos really need?

This week the OnApp team is at the Total Telecom Congress 2018 in London – and day one of the conference was fascinating.

In the opening moderator’s keynote and panel discussion, we heard from BT, Deutsche Telekom and Telefonica about a theme that seems eternal in the telecoms market – digital transformation.

It’s the same theme I was writing about as a freelancer for telecoms companies in the early 2000s. Well, they do say this industry moves slowly. To be fair, I think “digital transformation” – while being a phrase that does, in all honesty, feel tired now – is also a phrase that’s been applied to the myriad commercial and technological changes that Telcos have been making in response to technical and legislative changes over the past decade or two.

To be even fairer, each of the opening speakers readily identified the slow pace of change as a critical focus area for the industry. There is a need – now a pressing, urgent need – not just to move forward with new technologies (5G especially being the new darling) but also, to actually find a way to bring real agility to an industry that can still take years to realize ideas as market-ready products and services.

Common ground – and much to do

There was a lot of common ground in the presentations from each of the three large operators. We heard from Howard Watson, BT Group’s CTIO; Enrique Blanco Nadales, global CTO at Telefonica; and Arash Ashouriha, SVP Technology Architecture & Innovation at Deutsche Telekom.

5G, virtualization, SDN and network slicing, and edge computing are all foundation technologies for the expected next wave of growth – *if* telecoms operators can win the battle against disintermediation, and monetize their network assets, their network expertise, and the huge R&D investment that creates the network technologies that underpin the business and consumer experience of so many aspects of IT today.

Closer co-operation between operators, on more than just standards, was another important theme. So why, then, as a cloud management software company, was OnApp there?

Networks are (and aren’t) everything

One of the fascinating differences in conversations with Telcos (compared, for example, to more hosting-centric MSPs) is their total focus on the network. For sure, operators’ network expertise is going to be core to any new value proposition they take to market – but we take a view that, while the kind of virtualized networking that is taking hold in the industry is a core component of those services, it’s not really where their focus should lie.

Telcos have a direct, deep and data-rich relationship with the “eyeballs” on their networks – but have often failed to capitalize by providing anything more than the pipe to the services that customers really engage with, which tend to lie at the application layer,  the compute layer, or in the device. At least one speaker pointed out that it was crazy that the “home device” ground had been owned so completely, and so quickly, by companies like Amazon and Google. Saying “Ok Google” and “Alexa” only works because you have ubiquitous connectivity – but nobody says “hello BT!” (for example).

At the same time, most operators are active in the cloud – it’s just that they outsource the compute and storage components to third parties like AWS and Azure. While that approach avoids the perceived complexity of building and delivering their own cloud services, it does so by sacrificing margin, and ownership of that ultra-valuable customer data.

Taking back lost ground is indeed about finding ways to build the experiences customers are looking for – whether it’s better provisioning of network services, or new innovations in the home, or in vertical-specific applications for industry. Experience-led strategies were clear in each of the three speaker’s presentations.

The question is, how? Well, edge computing also featured highly in each presentation, and it’s here that the traditional telco borders between network and compute need to be broken down.

Inside every Telco…

It’s like, inside every Telco, there’s a cloud provider trying to get out – or a cloud provider that ought to be trying to get out. That was the topic of our own presentation, given by Tim Meredith, our CCO, and our Director of Pre-Sales Engineering, Jim Freeman.

Tim, who brings a wealth of previous Telco product development and commercial management experience to OnApp, talked about how Telcos need to look past any previous experience of launching cloud services where tech partner products were difficult to implement, and slow to take to market – or where they simply enabled a “me too” product that resulted in low or slow take-up.

Yes, there has been consolidation or exit for “me too” services – but there is still 30% CAGR in “as-as-service” solutions. So how do you, as a Telco, take advantage? Is Telco cloud a reality, ignoring the low-margin reselling approach?

Well, we believe it is. And after 5,000+ cloud deployments for service providers, we *know* it is. OnApp is a complete cloud management solution designed for your business – which means, it’s designed to give you the flexibility to create the services your customers need.

While open source cloud products give you a basic framework as a starting point, we give you the tools to simplify the creation, deployment, and crucially the monetization of your cloud services – so it’s easy to combine the next generation of network technologies with the compute and storage services you’ll need to take them to market.

Tim and Jim showed a few examples of how we make cloud easy for service providers – but I’m not going into more solution detail here. Much quicker to visit our cloud solution pages, or just contact us and speak to an expert!

In-depth discussion…

After our presentation we ran a roundtable, moderated by Tim Meredith, which explored the barriers to adoption of virtualization and cloud services in telecoms businesses – and specifically, what Telco technology partners should do better to help. Technology partners like OnApp. Are we actually part of the problem?

It was a fascinating discussion. Feedback included the need for technology partners to be aware of and sensitive to existing, legacy customer bases. That was particularly revealing in light of comments made in the opening plenary session: Deutsche Telekom’s Arash Ashouriha pointed out the bemused reactions he sees from Telcos in markets like Korea – where the norm is to adopt a kind of “best-of-bleeding-edge” approach – and they look at other countries where Telcos still have load on comparatively ancient 2G networks. End-of-Life for legacy products has consequences – but as Arash said, it’s life – and “life has consequences…”

In terms of the cloud services we’re helping Telcos bring to market, this means tech partners need to be commercially flexible to make migration from old to new technology easier. We heard that, sometimes partners try to bend their product to fit a use case that it actually can’t: where really, they should actually be honest about the capabilities and not exceed them. There was another view that partners should have a product with flexibility out of the box, so that customisation needed for the end customer is easier to achieve.

What else? We heard that white-labelling is not so important any more, because there is power in brand association with a tried and tested solution – and that go to market support is useful in this co-branded scenario. Helping service providers go to market is definitely important: though, we suspect that the need for white-labelling is something that will vary from provider to provider. We’re in the happy position where many of our service provider clients will build the OnApp brand into their cloud offering, but if you were BT or Telefonica? Perhaps not. The point is, you should be able to choose, and your partner should enable you to make that choice.

The roundtable also discussed whether Telcos should use their technology partners for agile product development, versus doing that in house. There was no real consensus on that issue. By contrast, the roundtable participants all felt that Telcos don’t necessarily have the professional services expertise in cloud to confidently go to market, and that that was a role partners could definitely fulfill – at least in the interim.

We very much enjoyed the roundtable discussion, and hope we can continue it “offline” with the participants. It’s so important, sometimes, to remove product from the conversation and just talk about the approach!

Onwards to Day Two!

We had a great first day at the Total Telecom Congress. We welcomed a wide range of different companies to the OnApp booth for demos of the OnApp cloud platform, chats with our business and technology specialists, some cool giveaways and a chance to win an Oculus VR kit.

Tonight’s drinks reception was bizarrely devoid of people wanting free drinks. Hopefully everyone was too busy planning their new cloud strategies…

Tomorrow, we’re looking forward to an even busier day, with another VR kit to win, and the after-show reception where the OnApp team will be present in full force.

Stop by the OnApp booth to say hello – and see how we’re helping telecoms companies bring simplicity, clarity and profitability to the cloud!