HP Communications & Media Insights

WINTER 2010

C o m m u n ic a t i o n s & M e d i a

Insights

Technology to business transformation

the conversation

TelecomIQ This blog, led by HP Communications & Media Solutions’ VP & GM, Erwan MÊnard, features open discussion of topics that are shaping our Communication industry today. Conversations focus on challenges CSPs are facing in transforming their businesses; monetizing opportunities presented by Over The Top providers; and expanding their markets through Cloud technology.

www.hptelecomiq.com

FOREWORD

Technology to business transformation

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he demands of the new communications future mean that transformation of business models and processes is essential. However, the precise form that transformation should take is open to question.

Sensibly, many Communications Service Providers (CSPs) are taking a measured approach and one grounded in business realities, not in abstract and untried organizational theories. If service providers are to leverage their considerable assets and to move from a technology focus to become true business and social enablers for an ever-widening range of industries and communities, then they must be able to open their systems and processes and become more inclusive. Furthermore, that inclusivity must reach inwards as well as outwards, breaking down internal silos while simultaneously exploiting outsourcing, partnerships and cloud-based models for the benefit of both themselves and their customers.

Such a strategy involves exploiting existing assets, processes and data and combining them in original ways with new tools to solve emergent problem sets. Although service providers have been making sweeping changes to their systems and ways of working over the last decade or so, these have been driven primarily by cost reduction strategies and have often targeted technology rather than business.

The next stage, (a strategy I call Technology to Business Transformation (T2B)) has to be about reinventing the service provider’s actual business. Recognizing that the main challenges are now going to be focused on Customer Experience Management, growing revenues, competing against Over the top (OTT) suppliers and escaping from the potential trap of being relegated to the low value-add role of connectivity provider, service providers must, perforce, embrace new business models. This means focusing on what they can add to the customer experience and becoming both IT providers (via Cloud services) and content providers.

Cloud Services are driving business transformation in service providers. For example, SFR in France, working with HP, recently announced a broad Enterprise-focused cloud computing offer. With this announcement, SFR el-

evated their relatively small hosting business into a major enterprise IT service offer.

Further, a growing number of industry sectors are being attracted by the concept of inclusivity and the enormous potential of Cloud Services. These sectors, which include financial services, content owners and power utilities involved in SmartGrid initiatives, can exploit imminent winwin opportunities by working more intimately with CSPs. In this context, the building blocks of a telco’s network and systems assets can be reconfigured and exposed in appropriate ways to create real added-value for everyone, right through to the end-customer or user.

These building blocks, (or what I call “cross-business assets”) could include policy and subscriber data management, location, presence, real-time charging, service delivery platforms, assurance and fulfilment, analytics and, specifically for the content sector, media control and media workflow. Supporting these cross-business assets are the increasingly important disciplines of corporate governance, data retention, regulatory compliance and financial transparency. These factors are all critical to the next phase of Business Transformation in which CSPs are now engaged.

While the last few years have meant a necessarily intense focus on cutting costs, the next stage in the transformation process must be based in assembling and managing the building blocks of our industry (and our close relatives) in new, innovative and appropriate ways. Only by exposing these cross-business assets can we begin to monetize the true value that our industry brings to the world, delight and satisfy both partners and customers, and become the kinds of organization that our customers and our stakeholders will truly value.

The telecommunications industry needs to evolve and transform to continue to attract customers, drive new revenues and profit from the latest advances. CSPs understand the need to evolve their business as well as technology and are now starting to embrace whole-heartedly the necessary changes.

Erwan Ménard, General Manager and Vice President, CMS, HP

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03 FOREWORD The demands of the new communications future mean that transformation of business models and processes is essential.

06 This year, next year, sometime, never?

TelecomTV’s Martyn Warwick forecasts the Big Telecommy Things of 2011.

10 Reinvent the business – then leverage the technology Shifting the focus from technology to business (T2B) transformation.

14 Bridging the Internet Divide: Digital Experience Marketing Unrelenting advances in technology have been the hallmark of the century so far, with the Internet being one of the most significant and disruptive.

18 Wholesale in the Cloud The European network operator, Colt, has freshened up its price-list and pushed its wholesale activities into Eastern Europe, but another interesting story revolves around its customer-engagement approach – or cloud/collaboration.

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Contents 22 innovation: the rocky road we simply have to travel Have you ever come up with an idea that you were sure would change the world or, at least, would change your financial future? If only there was a clear route via which you could convince everyone else? How do you get started?

Where do you go for help or for appropriate comment and input to help you refine your idea and take it from a pipe dream to a real product or service?

26 Outsourcing for OpEx Reduction Outsourcing and Management Services (O&MS) is a hot topic for telcos. Why? And, what are the best adoption strategies for telcos to take, if they are to successfully transform businesses?

30 Golden Clouds, Silver Linings: How CSPs can Profit from the Business Cloud Services Boom New studies highlight an increasing demand for cloud services from business ICT users and CSPs are ideally placed to bundle these services for their customers.

32 Embracing Over-the-Top Opportunities A whole new market landscape awaits operators eager to find ways to monetize OTT services.

34 Addressing the Strategic Agenda Business transformation, it seems, is today’s most pressing imperative for CSPs as they vie to stay one step ahead of an ever-changing game. Organizational change is key, as is maintaining and even increasing the capabilities of the enterprise while transformation is underway.

39 Transformation in Action: From Service Provider to Business Exchange Business transformation, as an abstract, even academic concept has been debated in the ICT sector for quite a few years now but it took a combination of events – the perfect storms of troubles that have hit the industry twice in the past decade – to “transform” the theory of transformation into a pressing immediate need and practical application.

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TelecomTV’s Martyn Warwick forecasts the Big Telecommy Things of 2011

This year, next year, I

t was Neils Bohr, the Danish physicist and Nobel Laureate, who once observed, “Prediction is very difficult, especially if it’s about the future.”

I’m with Neils. This is the second year in succession that I have been commissioned to cast the runes, rattle the bones, rootle through the remains of roadkill and consult late into the night with a certain Mystic Meg, the in-house prophetess of O’Neill’s Irish Bar close by our offices in the City of London, in an effort to divine the portents of the year to come and then write TelecomTV’s forecast of the Top Ten Trends for 2011.

This time around, the focus is very much (but not exclusively) on mobility – an area so expansive and vital in 2010 that it will inevitably dominate the global ICT sector over the course of 2011.

So, here they are my Top Ten tips. And should any or even all of my prognostications turn out to be just so much bugle oil I shall take comfort in the wise words of George W. Bush who promised, “The future will be better tomorrow.”

Software (and much more) as a service – As a direct result of the growing power, relevance, security and user- acceptance of the Cloud, Software, Infrastructure, and Device Management as services will be made increasingly available from wireless and broadband companies.

As more and more work moves outside of the traditional office environment and is done in the home, in coffee shops, at other wireless-enabled venues and on the road, businesses find themselves having to support a wide array of mobile devices, networks, operating systems and applications.

Employees are working with sensitive, confidential and proprietary data far away from corporate headquarters and now, for the first time, equipment manufacturers are making technology available to network operators that permits them to generate new revenue by providing big and mid-sized business customers with secure, safe, robust, inexpensive Cloud-based mobile device management services.

This trend is certain to accelerate.

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Ever-increasing mobile data traffic and demand for broadband – Forecasts 1 and 2 above are based on the sure and certain knowledge that the explosion in demand for mobile data traffic is intensifying.

By next year 85 per cent of all cell phones and handheld mobile devices shipped globally will come with some form of embedded web browser. In the developed markets upwards of 60 per cent of all handsets sold will be smartphones that come with sophisticated (and bandwidth-hungry) web browsing capabilities.

Smartphones will begin to feature relatively big, high-resolution and even 3D display screens and this too will further increase mobile web usage as will the mobile wireless delivery of some popular B2C applications using established and popular web tools (like HTML) without the need for their adaptation.

The performance of wireless broadband will improve as some network owners and operators pursue their LTE strategies and move towards 4G and this will result in an expansion of the range of applications that no longer need to rely on fixed infrastructure.

However, burgeoning consumer demand will put further severe strain on networks and force operators to continue to spend on the build-out of faster and more robust infrastructure. The knockon effect of this for consumers (business and domestic alike) will be increased tariffs and higher costs for communications services, ameliorated perhaps to some extent in some parts of the world by cut-throat competition between service providers.

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The Cloud – Big news this year, it will be even bigger news in 2011 as hype becomes reality. The Cloud will take its place in the panoply of strategic options available not only to big corporations and government agencies but also to small- and medium-sized enterprises that will be able to take advantage of the capabilities of the Cloud – and the Cloud-based services – network operators already are, or soon will be, offering at much lower prices than hitherto.

Also, more and more core applications and sensitive data will be moved to the Cloud as security issues are resolved and trust builds.

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sometime, never?

Increased carrier collaboration and network sharing – Forecast 3 above will add extra impetus to the imperative for network sharing and partnerships between operators and service providers. Carriers will continue to look for ways to cut costs (especially Capex and Opex), extend their reach, push to get new services more quickly to market, exploit new revenue streams and to concentrate on their core capabilities.

Long gone are the days when network operators and service providers could claim to be able to do everything. The notion of being “all things to all men” and the ultimate “one stop shop” where all problems can be solved and all solutions provided has taken a hammering and nowadays carriers, service providers and network operators are partnering with one another as never before and almost as a matter of routine. What’s more, they are also collaborating with manufacturers, vendors, media companies and content providers to better and more cost-effectively deliver compelling new services and applications – before someone else does!

Nonetheless, the quality, reach, and reliability of the network itself will remain a key point of differentiation for operators.

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App Stores – App Stores, already wildly popular with the individual consumer, will continue to gain in importance to become the main – and sometimes the sole – method and mechanism for the distribution of applications to smartphones.

During 2011 they will also begin to play an ever-more important role in the B2B and B2E strategies of operators, services providers, Telcos and business corporations alike. They will be the key distribution channel for mobile apps, a commercial channel to sell applications and content and also a resource via which new options for application sourcing will be provided. App Stores will also have closer and closer links to the Cloud.

They will also provide a range of business support functions that will be of direct help and relevance to SMBs and enterprise.

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Augmented Reality and enhanced Location-Based Services – If content is king, (and it is) then context is queen and the new phenomenon of Augmented Reality (AR), is a technology inextricably intertwined with Location-Based Services (LBS). LBS have been around for a while but had little success having failed to fire the imagination of the general public. That is about to change.

AR convincingly blurs the line between what is real and what is computer-generated by enhancing what users see, hear and feel.

Augmented Reality is not Virtual Reality (VR). VR creates immersive, computer-generated environments while AR adds graphics, video, sound and “haptic feedback” (enhanced sense of touch) to the natural world.

The growth of AR is being driven simultaneously by the video games sector and the mobile handset industry. Both the Apple iPhone operating system and the Android OS can already overlay extra information over the top of a picture or video and other mobile operating systems will follow.

In essence, AR changes the way users see their world. Apart from mobile phone screens (that have inherent limitations as far as AR is concerned) manufacturers are developing Augmented Reality displays that look like a normal pair of glasses but which are capable of projecting informative graphics into your field of view, that, together with audio and object recognition technology, coincide with whatever you happen to be looking at. It is a live, real-time enhancement of Location-Based Service delivered in its semantic context that permits information about the surrounding real world of the user to be interactive.

Furthermore, it is expected that by the end of 2011, more than 75 per cent of mobile devices sold in mature markets will include GPS, so location-aware handsets will enable a wide range of B2E and B2C location-aware applications. This will develop to provide contextual AR applications for all smartphone subscribers.

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Sustainability and Green issues – In the aftermath of the global financial crisis, budgets have been cut and money is tight. As a result it seemed likely that the communications industry might reduce its commitment to (and spending on) green and sustainability matters.

However, in general this has not been the case and going into 2011, and beyond, the increased take-up of virtualization and the increased popularity of hosting in the Cloud should help organizations to reduce their carbon footprints still further.

These developments, taken with concerted efforts by the industry to make deep, quantifiable and sustainable reductions in the amount of electricity required to power network elements, the integration of renewable energy sources such as solar and wind, more energy efficient practices for data center operations, and a greater focus on recycling and reuse of network equipment not only helps to reduce carbon footprints and greenhouse gas emissions, it also results in a significant reduction in energy-related operating expenses.

Manufacturers and vendors are helping by providing operators and service providers with equipment that will increase energy efficiency and reduce Capex and Opex, while consumers are also looking to reduce their financial outgoings and are seeking energyefficient gadgets – everything from mobile phones to fridges and TVs. The availability and popularity of energy-efficient and green products has increased tenfold over the past few years and will continue to grow, while recycling schemes for old and discarded devices such as handsets, TVs, etc., are both popular and mandatory in many countries.

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Machine to Machine communication – The M2M market is in its infancy but is growing up fast.

Although this sector remains fragmented it is growing at more than 30 per cent per annum and is set to explode with new, low-cost M2M modules enabling a wide range of networked devices and business models.

Key applications include smart grid, meter reading, security and surveillance, automotive systems, vending and point-of-sale applications, remote monitoring, and track-and-trace systems.

Modern M2M systems are a vast improvement on the old telemetry services of yesterday. These have expanded well beyond one-to-one connections into a system of networks that transmit (and receive) data from personal appliances and the ubiquitous availability of wireless communications has made it much easier for M2M communication to take place while reducing the amount of power and time necessary for information to be communicated between machines.

These M2M networks also enable a wide new range new business opportunities and, as far as mature markets are concerned, over the course of 2011 an increasing number of national and multinational M2M service options will become available in mature markets.

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Repeat Prescription. Keep taking the tablets – And, last but by no means least; I repeat my prescription of last year to “Keep taking the tablets.”

Over the past couple of years tablet computing/ communications devices and so-called “smartbook” slowly became more popular but the introduction of Apple’s iPad changed things more or less overnight. It is estimated that more than 70 million iPads have been sold since it was first introduced only in April this year.

The device is a global phenomenon by any standards. That’s because the iPad is marketed predominantly as a platform for audio and visual media such as books, magazines, films, music, and games, as well as web content. Another of the iPad’s popular features is the multi-touch control of its display that makes the device so much easier and quicker to use than earlier tablet computers that relied on stylus pressure to make entries.

Over the next year we expect to see a flood of tablets coming onto the market from every direction. As a result, the tablet will likely spin in different directions as vendors take the successful ingredients and add their own slant. HP, for instance, has this year launched a business-oriented tablet called the Slate 500, running a version of Microsoft’s Windows 7 OS. More tablets will doubtless follow; some will succeed, others will fail, but the tablet computer in its various iterations is here to stay.

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TV: IP, HD, 3D and more – Television is changing almost beyond recognition. The number of people watching programs in the “traditional” way (i.e. live and linear) is in terminal decline as the use of personal digital video recorders becomes the rule rather than the exception – with far-reaching repercussions for the entire industry; content makers, distributors, broadcasters and advertisers alike.

As far as IPTV is concerned, operators and service providers will have no choice but to embrace ‘over-the-top’ TV and open Internet apps. There are now an increasing number of ways that content providers will be able to reach the TV screen and audience including via open specifications and connected devices’ initiatives such as Yahoo’s Connected TV. Many of these should be launched as commercial ventures rather than as experimental trials during 2011.

Meanwhile, HDTV is almost at tipping-point but the various platforms will have to improve the availability and quality of HD channels and increase the amount of compelling HD content if it is to go mainstream and become the norm.

Even as HDTV finally takes a hold in the public imagination, manufacturers and content providers, buoyed by the success of 3D blockbuster films such as Avatar, are hyping 3D TV and several 3D TV models are now on the market despite the dearth of 3D content.

2011 will give us some indication as to whether 3D TV will take-off or go down in history as a technological gimmick that will languish as a comparative failure until technology improves.

The 3D movies of the 1950s proved to be a flash-in-the-pan fad that did not resurface as a popular medium until the technology produced in the 21st century took the cinema-going audience by storm. It is possible that 3D TV could suffer the same fate. Time, good quality content, pricing and the eradication of the need to wear cumbersome and tiring glasses to watch 3D displays will be the determining factors.

Meanwhile, several companies (mostly in Japan) are working on table-top holographic television that they hope will be available in pubs and clubs in time for the next football World Cup.

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So, there you have them, my Top Ten Trends for 2011. I could, of course, have come up with a Top 20, a Top 50 or even a Top 100, but life’s too short and so is this article. Besides, the more prognosticating you do, the more likely you are to come a cropper.

A bit like Mother Shipton, a 16th century Yorkshirewoman and seer who also went by the name of Ursula Soothtell. Famous for writing about planes and trains and automobiles more than 400 years before they were invented but she made the classic mistake of moving from making vague predictions that could mean almost anything to anybody to the very specific when she wrote, “The world to an end shall come, in eighteen hundred and eighty one.” Oops.

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Shifting the focus from technology to business (T2B) transformation

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David Sliter, Vice President, Products & Solutions, CMS, HP

Reinvent the business then leverage the technology I

f you are a Communications Service Provider (CSP), you know that technology relevant to your market is emerging at a dizzying rate. Accompanied by a swarm of technologies like IMS, 4G, LTE, SON, SmartGrid, M2M and Cloud, the innovation that drives the world of the CSP is evolving almost daily. And, as these innovations arise to meet new customer demands, they also raise customer expectations.

In this dynamic environment it is easy to let the flurry of technologies obscure the vision of what your business objectives are while you continue to focus on whether your business has the latest technical capabilities in place rather than making rational and informed decisions about when to adopt new technologies and how to apply them so that they make a full contribution to the achievement of business goals. And the key thing to remember

is this: As changing customer demands drive the reinvention of communications technology, the challenge for CSPs is to reinvent the business.

Adopting a measured approach Many service providers today understand this, and the ones most likely to succeed are taking a measured approach grounded in business realities. They are moving away from a technology focus and looking for ways to become enablers for both businesses and communities of private users. They are opening up their business processes as well as their technology systems to become more inclusive. They’re breaking down internal silos. And are exploiting partnerships and new business trends, such as outsourcing and cloud-based service delivery, to provide a richer experience for

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their customers whilst simultaneously enhancing the ability of their businesses to profit from that experience.

The strategy employed involves the exploitation of existing assets, processes and data, and combining them in original ways with new tools to address new business challenges and meet new customer demands.

In some ways, this is nothing new. Service providers have been making sweeping changes to their systems and ways of working for over ten years, but these have been driven primarily by cost reduction strategies and have targeted technology rather than business. The move to all IP networks, the adoption of 3G standards, and the provision of fiber-optic networks to homes are all examples here.

same time, DTAC was also able dramatically to reduce mean time to repair, improve customer experience, increase loyalty, and reduce both churn and operational costs.

Elsewhere, the Hungarian triple-play service provider, Magyar Telekom, placed a similar focus on customer experience, and added an emphasis on internal efficiency and faster time to market. Magyar Telekom developed a single consolidated serviceprovisioning and service activation platform to handle fixed, mobile, and broadband services and replaced three separate legacy systems. This not only increased efficiency, reduced costs, and shortened implementation times, it also greatly improved the experience customers have with Magyar Telekom’s ordering and activation processes.

The T2B transformation What some service providers are doing differently – and what marks the next evolution phase for CSPs – is the actual reinvention of the business. Tomorrow’s challenges will focus on Customer Experience Management, growing revenues, and collaboration and competition with OTT suppliers by breaking out of the current lim-

Cloud transformation The advantages of the T2B transformation approach are not limited to the individual subscriber business. The potential savings and efficiencies offered by cloud services are creating new opportunities for CSPs to engage with enterprises and vertical businesses such as office rental, healthcare, financial services, publishing, and power utilities involved in SmartGrid initiatives. By combining their existing telecommunication network and system assets with the cloud delivery model, service providers can deliver valuable services to business customers in a scalable, on-demand, payas-you-go fashion together with end-to-end SLAs. CSPs are uniquely positioned to offer a guarantee for the time taken from customer click to next application page and CSPs can combine service guarantees with network bandwidth guarantees to ensure application response times are achieved. This is a real and quantifiable transformation in the way enterprise customers do business, via the use of a public web, but without the uncertainty. Examples of these cloud-based services today include contact centers, interactive voice response, device management, remote storage, PC backup, remote server based computing and application security.

Service providers have been making sweeping changes to their systems and ways of working over the ten years and more, but these have been driven primarily by cost reduction strategies and have targeted technology rather than business ited role of provider of connectivity. Forward-looking service providers are embracing new business models such as cloud-based service delivery and are transcending their network supplier roots by providing content directly to their subscribers and business customers.

The Thai mobile operator, DTAC, is a good example of this type of transformation. By assembling a number of solutions that individually dealt with fault management, network performance, trouble ticketing, configuration management, and SQM issues and then wrapping these under a common framework of methodologies, best practice, and intellectual property, DTAC’s customer-care staff are now able to resolve 70 per cent of complaints on the first call and this places them well above the benchmarks* laid down by the Customer Contact Council for Telecommunications. At the

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Transforming with end-to-end expertise Ironically, at the very moment communications technology and innovation began to accelerate the economic downturn necessitated an intense focus on cost cutting, and many service providers

have yet to take full advantage of new trends and existing silo customer assets. Yet, according to HP’s latest Technology to Business Transformation research, revenue growth and reducing timeto-market are now the Number One drivers of transformational projects**, even ahead of cost reduction initiatives.

As the industry looks towards new business models and the opportunity to capture the potential of the Internet ecosystem, it is recognizing the need to energize the potential of new business models by unifying and managing the building blocks of the industry such as cross-business assets, end-to-end processes, customer profile and behavioral data. The trick will be the ability to combine these in new and innovative ways which project tremendous value to an array of business partners.

HP believes that T2B must be underpinned by end-to-end expertise, combining strategic, managed, outsourced, solution, integration and delivery expertise across all business domains, from IT and on across into the network. Cross-business assets, processes and customer data are scattered across both the network and IT domains, so before embarking on this critical journey, it is absolutely vital to be sure to choose a partner that can bring a broad breadth of skills to address your entire business problem, not just a fragment of it. * “Telecommunications Contact Center Benchmarking Results”, Customer Contact Council, 2008 ** “T2B Transformation Research” Hewlett Packard, 2010

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Rick Halton, VP Worldwide Marketing, CMS, HP

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Bridging the Internet Divide: Digital Experience Marketing

Unrelenting advances in technology have been the hallmark of the century so far, with the Internet being one of the most significant and disruptive.

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he Internet is like an ocean, upon which there is a constant passage of users. Navigating the web today is similar to the sailing days of old in that, when I open my browser and take a leap of faith into the web world, I am on my own with no one to lend me a helping hand. I’m without a safety net, and spending inordinate time trying to navigate to where I want to go and finding things of relevance to me. Search engines, recommendation engines and the technologies such as the semantic web help of course because they may be aware of where I came from or where I am going, but they have no contextual knowledge about my overall journey and can only deduce a tiny amount about my preferences and requirements.

According to Nielsen, the average US consumer spends an hour and a half every day browsing the Internet and with the number of global domains now reaching 200 million plus mark (so

says Verisign), the opportunity to transform the Internet experience into a less time-consuming and more relevant and enriching experience is real and right now.

New display technologies such as public information terminals, enhanced eye-ware, and automobile head-up displays combined with a user’s favorite points of interest and geospatial content, heighten the need to filter a raw Internet experience into something more useful to individual needs.

The Digital Experience Marketing Opportunity So, if a consumer could flick a switch and their Internet experience suddenly became much more relevant and engaging, would he or she do just that? If they could easily find new friends with similar interests, say in Facebook or World of Warcraft, would they like that? And, if the latest video app I download is instantly enhanced

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leverage their interactions during the web experience to enhance customer relationships.

By providing an operator’s own apps that provide an anchor point for the relationship, the bewildered customer will begin to rely more heavily on the service provider as a value added conduit for Internet access. The combination of features such as daily web recommendations, peak usage bandwidth offers associated with video websites, poor customer experience, pre-emptive kick-backs, correct device setting recommendations, content cross-selling and proactive customer care alerts bring a whole new meaning to the notion of nurturing customer relationships in the online world.

Further, as this opportunity unfolds, the concept of ‘customer lifetime value’ evolves into the web dimension. Then marketing staff can then carefully study and quantify the impact of different actions on customer sub-segments and client devices to maximize the overall benefit for the customer and the service providers business.

with video recommendations matching my personal interests and recent browsing history, I know I would find that attractive!

As the communications industry continues to re-invent itself, service providers find themselves at the natural intersection of the consumer web experience. They are in a powerful position within the value chain to be able to unify today’s fragmented experience into something much more valuable to the consumer. They can act as the conduit to deliver more engaging Internet experiences while maintaining a digital relationship with the customer, otherwise they risk losing contact with the customer once that user begins to surf the web. Of course, by empowering customers with their own data and controls to allow third-party access, consumers uncover new value in their web experience and applications.

Behavioral profiling takes this a step further by interpreting customer interest and personal information and perhaps identifying if this customer is a frequent traveler, has a high disposable income, is a frequent user of e-commerce and their spending patterns. Importantly, as service providers gain the trust of consumers, they can

Of course, by empowering customers with their own data and controls to allow third-party access, consumers uncover new value in their web experience and applications

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A Four-Step Approach To put Digital Experience Management into practice, service providers should consider the following four steps.

The first provides the customer interface to control and approve access to customer data. This is typically done through an app, API or web service.

The second collects customer data from critical sources throughout the business, some of it in real-time. Profile data may explicitly be declared data by the customer, extracted from network registries and OSS/BSS fulfillment and network management systems or garnered from third-party web services. It is then posted and continually updated into a customer-centric meta-data model.

The third step analyzes, profiles and interprets the customer data from usage and interactions, again often in real-time. Most data will simply be ingested; never stored and interpreted into some other useful data that implies usage-behavior meta-data.

Meanwhile, sensitive data may be encrypted, placed in data vaults and shared only with the explicit permission of the individual customer.

The fourth and final step is critical and provides the triggers and policies to act upon the data. This step provides the logic that confers value on the data by allowing it to be woven into the customer’s web experience in an elegant and, above all, useful way.

Customer marketing responses may be triggered by many types of events, including time-of-day, changes of location, URL type visited and content requested.

Digital Experience Marketing represents a fundamental transformation in the Internet experience. The service provider evolves its role to act as a facilitator and champion of the customer’s digital experience to help Internet users discover and exploit a new, more productive and more exciting and entertaining experience.

Outcomes that matter.

Learn more at hp.com/go/ascend

Ian Scales, Managing Editor, TelecomTV

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n many ways Colt’s approach is just a natural, organic refinement of the old telecoms wholesale business. And even that isn’t that ancient – dating I suppose from the late 1990s – when the European Union mandated a single European market in telecoms and the big boom in network building began.

Colt was part of that boom and, unlike some of its competitors, has proved to be a survivor. It started off by providing communication services in the City of London (City of London Telecommunications = Colt) and built out from there. It had corporate customers but realized early on that the wholesale of various types of service was going to be key to survival and prosperity – “build big, sell to everyone you can” wasn’t any particular company’s slogan as far as I remember but it pretty much sums up many of the business models current at the end of the 20th Century.

Once you’ve built out the network, one way to keep ahead in wholesale is to be better and slicker at selling than the competition and one way to get like that is to automate things. So, rather than scurrying about with an order book, a pen and a hopeful look, why not let your customers right into your system online? Why not send them out your electronic price list and let them build it into their own sales systems?

In other words, why not cloud/collaborate and make a real, in-your-face feature of it.

According to Dr. Lutz Blank, Wholesale Marketing Director at Colt, his company can offer Ethernet list prices for metro, national and international services within the Western European footprint and into 23 main cities across Poland, the Czech Republic, Slovakia, Hungary and Romania. A self-service web-based quoting tool allows online selection of preferred solutions or a Colt data feed can be provided directly into a customer’s own sales tool.

“Ten years ago Colt had developed some enterprise services and we saw that some of the components were ideal for selling to wholesale customers”, says Blank. “We did it from the beginning – circuits from A to B and switched minutes. On minutes, other carriers would terminate traffic for us in some places, in others we would terminate traffic for them.”

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The European network operator, Colt, has freshened up its pricelist and pushed its wholesale activities into Eastern Europe, but another interesting story revolves around its customerengagement approach – or cloud/collaboration

Wholesale in the Cloud Now, says Blank, “It’s a commodity business. It’s really changed – you can buy a service from one company one minute and swap it for another the next and there’s no problem. So you need to do more than just offering a technical service.”

He continues, “It‘s very important for the customer to know what Colt is offering to where. You need to offer end-to-end processes around the technical services – access backbone and, increasingly, white label services that carrier customers can sell on.”

“Now, we increasingly have customers coming to us and saying, ‘you have something we don’t have. We don’t want building blocks, so can you deliver the whole lot to us? I don’t want to have anything to do with it, I just want to put my name on the bill please.’“

That’s what Colt is increasingly doing and more and more it is enabled for the customer online using automated processes. So, there’s no need to leave the building with your clipboard – a white label service is simply “mashed” into the portfolio.

Now this sounds very much like classical outsourcing, but nobody wants to call it that for a myriad of sensitivity reasons. I suggested to Blank that one way of viewing it is as a B2B cloud infrastructure service and the business change that is enabling this sort of relationship is the increasing willingness of the retail telcos to let go – technically that is.

Even ten years ago, the very notion of having a third-party deliver a technical service but calling it your own would have been

The Telco Clouds

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he big-brand global telcos are set to be strong players in the cloud computing market as corporate attitudes to cloud improve – so says a new report from London-based research house Ovum.

After a slow start, it looks as though the AT&T/BT/Orange/Verizon segment of the global telecoms market is now ready to take on the big IT companies at their own game. One of the main reasons for the delay is that previously cautious end-users are just beginning to come around to the idea of cloud and Ovum expects that the market will grow strongly over the next two to three years as users start adopting.

According to Ovum, sensible telcos are certain to succeed here because they already

have many of the key skills on tap. They’ve got a long heritage in the managed data center and hosting businesses and when you put this together with their networking and security expertise it becomes a compelling package. Ovum says that the big telco can do well in both IaaS (infrastructure as a service) and SaaS (software as a service) areas.

One of the keys for the telcos as they ramp-up their competitive pitches is the ability to provide end-to-end management of the critical network piece in the offer. This appeals particularly to large corporates or big companies with mission-critical applications.

Clearing a long-term (and assured) path to being able to offer enhanced service for Cloud connections along with (or beside)

standard Internet access was presumably one of the ideas in the back of the collective mind of Verizon when it hammered out its “joint statement” with Google on Internet neutrality. The ‘compromise’ document envisaged carriers being able to develop a sort of parallel Internet as long as it stayed distinct from the public one.

Certainly, the ability to be able to provide something in between a dedicated but expensive end-to-end network, and a cost-effective but much cheaper Internet access offer would clearly be another big plus for carriers eyeingup the corporate cloud market and wanting – in the US at least – to make sure they don’t run into regulatory problems through offering enhanced quality of service.

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regarded by some as a shady practice tantamount to fraud and, even at best, would have been viewed by most as commercially foolhardy. In those days you just had to hold the technology close and on your own network to be responsible and accountable for it. Now carriers are willing to let go – in other words, they have begun to collaborate.

Blank agrees. He says, “In fact many of the customers today are actually looking to reduce the number of suppliers, but each

Getting Down to Work with the Cloud

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n May 2010, TelecomTV held a global online event to discuss the Cloud. Guests on three continents debated the issues live, and these were watched and discussed by a worldwide online audience. The debate followed the clock – it started in Asia, then moved to Europe, and finally ended in the USA – as we sought to create a global Resolution.

In the first leg in Singapore, we attempted to define what cloud actually is as well as who the main types of players are and what sort of business models are involved in the establishment of cloud comTo watch TelecomTV’s puting and services.

“Getting Down to The Cloud has been Work with the Cloud” described as a “once in online debate, visit: a generation opportuhttp://bit.ly/cq8lri nity” – but for whom? Infrastructure as a Service, Platform as a Service or Software as a Service? Or all three? We tend to think of cloud as a technology being used differently, but aren’t the challenges and issues really about corporate ‘culture’, rather than technology? About moving on and up to sell and/or buy services rather than boxes and raw functions?

The Asian panel felt that the Cloud is indeed the one-off opportunity for the entire ICT ecosystem. For the hardware, software and service providers the opportunity is now – but collaboration to share risk is essential to making it successful.

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supplier has to provide more of a solution than simple bits and pieces because they themselves want to focus on the real service provision for their end-customer.”

So we believe one direction for wholesale services is towards Cloud/collaboration. On October 19, 2010, TelecomTV held a worldwide event “Cloud/Collaboration”. Three live panel discussions were held during the day; in Singapore, London and San Francisco. Check out the debate that ensued on www.telecomtv.com.

We then moved to Europe and broadcast live from the stage of the TM Forum’s Management World event in the South of France. Here we got more specific and looked at services, corporate end users and how telcos could use the cloud services concept to further their own business models. We examined what the hot areas are for cloud provision and those organizations that are doing the providing as well as debating the opportunities open to telcos and other players as providers and the architectural options that are available. We also looked at examples of what is working and what isn’t.

In its summary, the Europe panel felt that the cloud is a reality today. The business-to-business model, however, is more mature than the business-to-consumer model, and this needs work.

Finally, in New York, we looked at the trends and projections for the development of the cloud market. We examined what the adoption curves look like in different markets and debated what is expected to do well and how much that success will be quantified in terms of cold, hard cash.

The Americas panel felt it is important for telcos to see the cloud from a business viewpoint rather than a technology perspective. The cloud is all about getting the business models right and taking a leadership position by acting now. Players also need to know what they can do and what they can’t do, and be open to partnerships.

The conclusion of our day of discussions was that although the industry is fond of hyping things, it is not over-hyping cloud.

It’s here to stay and will grow stronger. This is a once in a generation opportunity for all the players within the eco-system – and that includes customers and end-users.

The only barrier is corporate paranoia and protagonists must get over that – now. The fact of the matter is that the businessto-business market for cloud is far more mature and developed than the business-to-consumer sector. And while telcos are indeed threatened by OTT players they’re in a commanding position because of their customer relationships and their unique grip of network technology. They have the full service model, which will stand them in good stead as they battle against the upstarts.

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Jeff Edlund, Chief Technologist, CMS, HP

Innovation:

The rocky road we simply have to travel Have you ever come up with an idea that you were sure would change the world or, at least, would change your financial future? If only there was a clear route via which you could convince everyone else? How do you get started? Where do you go for help or for appropriate comment and input to help you refine your idea and take it from a pipe dream to a real product or service?

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ell, questions like these (or rather a lack of coherent answers to them) commonly cause the most creative in our ranks to lose hope and give up. Negotiating such hurdles is difficult enough at the best of times but what can be even more discouraging is the propensity for the business not to follow through thoroughly or quickly enough on ideas that have been presented to it.

But that was then and this is now and the CMS business in HP has invested an enormous amount of energy and resources in terms of personnel, finance and support in an effort to solve these problems and really foster true innovation.

We have designed and implemented a culture of Innovation and of Transformation but the creation of such an environment is far from easy and it takes a lot of time and effort. However, with the support of our executive leadership it is evident that everyone in the organization believes that we are completely determined in our attitude towards fostering innovation and that with the new landscape, this will pay dividends for all concerned in the months and years to come.

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The CMS Innovation approach In CMS we have a triple-pronged approach to innovation that we have been developing and fine-tuning over the past two years as we have been transforming our business. The tines on the fork are: • IP Capture – Intellectual Property Capture • IPO – Innovation Program Office • VC Board – Venture Capital Board Each of these processes is designed to address the range of potential sources and method of creating compelling products, processes and services that help us to refresh our portfolio of offerings.

IP Capture IP Capture is the process CMS uses in the servicesled/field-connected engineering aspects of our business.

In IP Capture the source of new intellectual property almost always originates during a services engagement directly with the customer. The types of IP that can be captured includes; best practices or processes for implementing a solution; software created specifically to solve a previously unsolved customer problem, and the creation of new interfaces or APIs as the result of a new integration.

The key to successful IP Capture is repeatability. So, if the CMS product portfolio team is to be able to invest in your IP Capture activity you must be able to demonstrate that your solution is not simply a one-off but that it can be re-used, time after time, with a host of other CMS customers. What’s more, an additional and potentially huge benefit is an idea that will be able to drive new license revenue streams. We are also keen to improve our existing product lines and under all normal circumstances we look to the POR (Plan of Record) to help accomplish these goals.

IPO – Innovation Program Office The CMS Innovation process seeks ideas from across the HP Corporation and from all our customers. Things change very quickly and the purpose of the IPO is to encourage anyone, anywhere, to come up with ideas that might take CMS in new and profitable directions not envisioned in our original strategy or on a POR. The job of the IPO is to take in amorphous notions and ideas that – whilst not fully formed and quite untested – are perceived to have genuine potential. We then apply our Market Research and Business Plan development system and processes to the idea and go on to create a presentation and rationale that will go before a VC Board as a costed and coherently argued concept.

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CMS uses the HP Garage to run its very successful Innovation IPO campaigns and has recently completed one campaign that resulted in more than 30 highquality ideas being moved forward and presented for evaluation. Out of those 30-plus ideas, three were selected to go on to the Market Research phase. That is a remarkable conversion rate of 10 per cent.

The winning ideas included:

It’s easy when we’re successful to be lulled into believing our own hype, and, to mix a metaphor, stick our heads in the sand whilst resting on our laurels. (That’s quite a trick and shouldn’t be attempted without having an advanced diploma in yoga).

• Using a graph database for the next generation of uCMDB’s (universal Configuration Management Database) • Machine to Machine (M2M) as a Service, and • Adaptive Bandwidth Optimization and Management VC Board – The Venture Capital Board The VC Board, in particular, looks to fund ideas that come from CMS employees. The CMS P&S (Product and Services) team operates the VC board process and uses it to align requests to create new IP or products with the appropriate CMS Domains that will eventually receive the idea and turn the innovation into a product.

The VC board is a great place for those ideas that don’t fit into the current POR to come for coaching, advice, resources and funding to move the idea along from simple blue sky innovation to achievable product.

A new way to think about Innovation.

Here’s another couple of questions for you – 1) “What are the unshakable beliefs in my industry about what customers want?

2) What if the truth is the opposite of what I have been thinking?”

It’s easy when we’re successful to be lulled into believing our own hype, and, to mix a metaphor, stick our heads in the sand whilst resting on our laurels. (That’s quite a trick and shouldn’t be attempted without having an advanced diploma in yoga).

Under such circumstances we brush aside objections and difficulties by arguing that the customer just wouldn’t go for whatever was being offered. We insist we know best what trade-offs they are not prepared to make.

When we reach this level of complacency, my caution flag is snapping in a strong wind at the very top of the mast. As soon as you start believing completely in your own unshared and hence untested and unvetted thoughts and rationalize that you will continue to have your finger on the pulse and continue to be successful, you are heading for a fall.

Want an example of this kind of delusionary folly in action?

OK. Just look at your local phone company. For many years it had a complete monopoly on the provision of phone service to consumers and businesses.

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Then, when the early Voice over IP (VoIP) providers emerged, established Telcos discounted the threat to the life to which they had become far too accustomed by rationalizing away to anyone who would listen and deceiving themselves into believing that the customers would not put up with the “low quality” and “unreliability” of this new service.

Indeed a particular telco actually said that the poor audio quality of the early VoIP calls showed that VoIP players weren’t – and couldn’t be – a not, and threat to the established order. This is the same company that had earlier dismissed the threat of mobile carriers to the business by stressing the unique “wire” based relationship with its customers.

These were complete misreadings of the situation based on wishful thinking rather than hard and dispassionate analysis. They refused to comprehend that technology would improve and that a new business models could emerge that would present a tipping point for their customers. As we know, the net effect of this selfdelusion was that when all these factors came together, customers switched en-mass because the quality was “good enough” and “price was right”.

What emerged was they were taken by surprise by new competitors. That they wereunprepared to compete against. Such companies as Skype, Vonage and Comcast became the “new local” phone company. While this was going on, the wireless operators came in and tempted many of the the local wireline phone customers to join them. How? Well, customers recognized that the wireless service quality was “good enough” and that “mobility” was a necessity given their changing lifestyle.

We should rememberthat the phone companies came into existence because the telegraph companies turned down the invention of the phone! They felt that there would be no need for phones as the telegraph worked just fine. How wrong they were!

These are blind spots that become so clear to us in the 20:20 vision of hindsight, but we all have blind spots and need to ask ourselves, “What is our blind spot in the Communications market place? What strongly held belief or passion do we need to stress test to check and ensure that it remains relevant to our customers and their businesses?

The answers to these questions will allow us to negotiate the rocky road to innovation and create products, service and market disruptions that will position HP CMS as a leader for many years to come.

Outcomes that matter.

Learn more at hp.com/go/ascend

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Outsourcing and Management Services (O&MS) is a hot topic for Telcos. Why? And, what are the best adoption strategies for telcos to take, if they are successfully to transform their businesses?

Outsourcing for OpEx Reduction O

Bob Ciccone, VP, Worldwide Delivery, CMS, HP

utsourcing and Management Services (O&MS) is a discipline in itself and relies on grounded expertise in the specific domain, on ensured capacityand, equally as importantly, on a measured and methodical approach to service governance.

Outsourced services have been around for more than a decade in the IT sector, but only now is it gaining acceptance and momentum in the telecoms industry.

First off, the customer has to be involved. The customer has to govern the operation. The chosen vendor puts the customer firmly in control and will also provide the tools needed to measure progress and ensure efficiency.

Competition drives service introduction The dynamic in the Telecom industry is changing. Over the Top (OTT) players are entering the market and are offering competitive services.

Telcos are under pressure to offer an abundance of innovative, attractive services to ensure differentiation. These services need to be offered, rolled out and managed – all while agility is improved and costs are managed tightly.

Sourcing key tasks to highly efficient partners is becoming an option that is both necessary and attractive. The research

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Reduction of OpEx Outsourcing can help telcos to reduce their OpEx – obviously a very significant cost in their businesses. In the past, OpEx costs rose quickly when many operators expanded their systems during periods of rapid user growth. By installing systems quickly to meet demand, they often ended up with siloed architecture and added new systems to support the introduction of new services, networks and technologies that were introduced over time. The architecture that eventually emerged was complex and demanded ever-higher maintenance costs.

Another key impact is dependency on highly skilled – and highly paid – staff, all too familiar with the ‘spaghetti architecture’ that multiple operations create. Think too about limitations in governance models and lack of operational visibility.

The main risk is delusion; that outsourcing For example, how can you tell that running a service is too expensive and that means getting away from management issues. the same outcome can be achieved for less A telco needs to manage its service management money, if you don’t monitor the groups concerned? A lack of metrics and poor goverprovider and make sure at the outset that there is nance equals higher OpEx. It’s as simple total clarity about KPI and SLAs as that!

There’s also a reluctance on the part of In the Middle East, an operator going through a phase of in- operators to impact critical working operations. Just think of the ternational expansion decided to replicate its operations in several bad press and criticism an operator gets if one of its Value Added different countries. Rather than copying its back-end systems into Services goes down and customers are impacted. Services such all the new territories, it chose to externalize them under an Out- as voicemail are very sensitive, and an operator would rather pay sourcing contract and created a new remote center to service all over the odds to keep them up and running than have them offline even for the shortest time. territories.

Improving Operational governance is an additional way to reduce OpEx. HP has the tools and systems to monitor KPIs using Customer strategies Whatever the driver, the telco should define exactly what is standards-based ITIL/eTOM methods and also from a technolrequired. To do that, we advise a detailed analytical process to ogy consolidation perspective, has solutions and expertise that determine exactly what is needed. Everything will be defined in cover the entire telco operating environment, including end-user services, BSS, OSS, enterprise operation, IT, network and infradetail and then constantly monitored as change is applied.

A popular Outsourcing strategy is step-by-step functional out- structure. These two measures can easily be applied, but over sourcing and is particularly well suited to Operations and Busi- the past ten years, most telcos have singly failed to adopt these ness Support Systems (OSS and BSS) and Value Added Services practices.

In outsourcing, HP recognizes the structural difficulties that tel(VAS). By using this methodology, a telco can gradually switch operations to an external provider whilst continuing to execute cos face and what we suggest is that the change be inverted so that rather than the customer having to improve its governance and services. reshape its architecture, the operation is outsourced as it is and Tight governance is key to success.

The main risk is delusion; that outsourcing means getting away then improved to a planned program and timetable.

A recent outsourcing study from the research house, Gartfrom management issues. A telco needs to manage its service management provider and make sure at the outset that there is total ner, indicates that average cost savings of 30 per cent are easily clarity about KPI and SLAs. Telcos would be wise to ensure that achievable, while similar work by the TMF reports 40 per cent their vendor of choice has the appropriate industry-standard moni- savings as commonplace. HP has shown a 48 per cent saving for a customer in the Middle East. toring tools in its armory to gauge its own performance. house IDC predicts that Telecom Managed Services will exceed 50 per cent of total OSS/BSS expenditures within the next five years.

There are two main drivers for telcos to go for outsourcing: expansion and cost reduction. With expansion-driven outsourcing, the operator may be looking at new market segments, a new set of services or a fresh geography. And a managed service provider is often better equipped quickly to get this expansion up-and-running than trying to achieve it in-house.

Cost-reduction-driven outsourcing is often a major focus – especially on and around Operations and Business Support Systems where typically there’s a lot of room to make savings by improved measures of management.

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HP: The Telcos’ Telco Telecom outsourcing depends on the convergence of multiple disciplines. a. Business strategy orientation HP Solution Consulting Services (SCS) is focused on helping telco executives identify and execute their plans for growth, agility and cost reduction. It is essential that both operator and vendor engage in an analytical phase before commencement. b. Expertise across all domains of telecom HP portfolio of expertise spans across all aspect of telecom operation. From signaling through network solutions, VAS, OSS and BSS, all the way to complete Service Delivery Environment, XaaS and Over-The-Top end user services. c. Management discipline We have a proven outsourcing methodology with over 30 years of Business Process Outsourcing (BPO) solutions. HP is a leader in both ITIL and eTOM and is well known for its complete set of governance solutions and processes. d. Service Capacity HP provides end-to-end industry BPO solutions to meet the needs of large volume, complex, transactiondriven organizations. HP has over 30 years of experience and a global presence, with 65 shared service centers and multiple fulfillment centers, delivering services in 51 languages and in 42 countries.

Only a vendor with proven leadership in all four areas can effective take on Telecom Outsourcing.

Where to Start?

The answer to this question is contingent on the main reason for the customer decision to consider outsourcing. It also depends on the characteristics of the telco’s operations and needs.

HP strongly recommends that customers start with an analysis where HP Solution Consulting Services (SCS) can provide expert opinion and support. Customers who want to reduce OpEx without impacting their core operations, should consider focusing on OSS operations. For many operators, the cost of running OSS has increased hugely over the years and OSS can be an ideal candidate for outsourced operation.

VAS operations is another candidate for outsourcing. VAS revenues are typically in decline, but because expenses are flat, there is an imbalance between costs and revenue. There’s generally a lot of room to improve the operation of VAS, and this has been identified as a priority area by many telcos.

Other operators are focusing on shortening time to launch new services. Open Service Delivery (OSD) is a framework environment that allows for quick introduction of end-user services. Outsourced OSD is a low risk, high impact change that can also help workforces cope with the introduction of new business models.

Of course, and despite some claims to the opposite, size does matter. Only a large enough service vendor can justify construction of the governance framework needed to ensure the right level of service. Economies of scale are extremely important.

An example of this is that HP outsourced VAS operations of a very large operator in India, running 20 centers of VAS throughout the sub-continent. With the customer, we defined a clear governance superstructure, assumed management of the operation and consolidated the multiple sites. The total cost of ownership fell by 40 per cent. No telco can afford to ignore financial impact of such significance.

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Golden Clouds, Silver Linings:

Why CSPs must Profit from the Business Cloud Services Boom New studies highlight an increasing demand for cloud services from business ICT users and CSPs are ideally placed to bundle these services for their customers.

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nformation and Communications Technology (ICT) at corporations both large and small is being re-thought. Larger enterprises are concerned that the cost of ongoing maintenance is much too high and is stifling innovation in ICT. Meanwhile, smaller businesses simply cannot afford the cost of staff expertise as ICT becomes more and more critical to their businesses both in computing and communications. Businesses of all sizes are realizing that designing for peak load in IT is very costly.

A Forrester Enterprise IT survey from 2009 established that 71 per cent of IT organizations are already using – or are interested in – Cloud Utility computing. HP’s own research with Forrester from the end of last year showed that the number of Small and Medium Businesses (SMBs) already using – or interested in purchasing – selected Communications as a Service (CaaS) service offers, such as IP Contact Center, had increased to 75 per cent.

In June this year, Gartner announced that 80 per cent of organizations in Asia Pacific are now using Software as a Service

Richard Arthur, Director, Business Transformation Marketing, CMS, HP

CSPs are perfectly placed to be the “aggregators” of a range of “as a service” offerings, developing their own where it makes sense and, in other instances, acting as a kind of “App store” for third parties

(SaaS) for enterprise applications such as ERP and CRM, with the remaining 20 percent planning to use it by June 2011.

Driving New Revenues So interest from IT organizations large and small in various “as a service” offerings is clear. They are already convinced there is benefit – the question now is, how should the CSP enter into cloud services and what is the best approach to drive new revenues?

Amongst the clear advantages that CSPs have are brand, billing relationship and control of the end-to-end Service Level Agreement (SLA). However CSPs can also have disadvantages, such as lack of skills in IT in some instances and lack of openness of service platforms. At HP we believe that CSPs are perfectly placed to be the “aggregators” of a range of “as a service” offerings, developing their own where it makes sense and, in other instances, acting as a kind of “App store” for third parties. CSPs

can therefore take advantage of their strengths while using third parties where appropriate to complete the offer.

Our study with Forrester further showed that CSPs have “permission to play” in the sense that IT buyers see them as, if not the first choice for their Cloud services, then certainly a close second or third.

Cloud services are moving out of a “best effort” phase, with weak SLAs targeted mostly at consumer or non-critical business computing services such as testing or R&D – the exception being established SaaS for CRM. The next phase is about higher value computing, storage and platform communications as well as software services.

CSPs can’t afford to be overtaken by “Over the Top” providers in Cloud, as is starting to happen in app stores and with consumer cloud services. The good news is the clouds are moving in their direction: CSPs need to build out the new services and partnerships promptly if they are to catch the golden cloud and exploit the silver lining.

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Embracing Over-the-Top Opportunities Operators need to find ways to monet ize OTT services, and in so doing, create a whole new market landscape.

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ith the number of mobile users soaring worldwide, mobile operators find themselves in a powerful position in the market. But they also face huge challenges. The emergence of Over-the-Top (OTT) services and the proliferation of providers that offer them have caused data traffic to skyrocket, bringing networks to their knees and upsetting subscribers. And while mobile operators have much more traffic to handle, their revenues haven’t increased. Why? Because flat-fee monthly plans prevent them from charging more for the increased services they are delivering. Quite simply this is not sustainable.

Operators need to find ways to monetize OTT services, but simply raising flat subscriber fees is not the answer. They need to do something more, they need to keep the OTT community from relegating them to the limited role of just managing the data pipe.

They need to seize the significant new opportunities OTT offers by transforming the nature of their relationships with OTT providers.

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Operators have unique capabilities that are critical to the successful delivery of any OTT application or service, but few of them are currently exploiting them. There are multiple ways in which mobile operators can utilize their exclusive assets to both partner with and compete with OTT providers and to monetize OTT services.

These assets include, but are not limited to: • Rich subscriber data • Unique customer-centric relationships, from order to payment, including billing and support • Core network insights Game on Operators can use these resources to create a new market landscape with win-win business models that maximize revenue and optimize customer experience. And forward-looking opera-

Nigel Upton, Director of RTBSS, CMS, HP

tors are already aggressively inserting themselves into the OTT value chain through a combination of partnering, competing, and monetizing.

The relationship between traditional operators and OTT providers is both competitive and symbiotic, so strategies are possible that create opportunities for operators to capitalize on the services OTT vendors offer, and at the same time enrich those services in monetizable ways.

By introducing tiered or personalized pricing, operators can monetize OTT services and give customers the services they want, and through partnerships and alignments with OTT vendors, can enrich OTT offerings to the benefit of subscribers. By creating their own application ecosystems, operators can compete directly with OTT vendors. And as the competition heats up, subscriber payto-play, fair-access, fair-use, and net-neutrality models will create further possibilities.

Tiered pricing makes it possible to leverage the economics of the moment Operators have largely been on the outside of the OTT world, looking in. Now though they can take advantage of the economics of the moment to monetize OTT services by introducing personalized, tiered plans with flexible pricing and by delivering bundled offers and promotions precisely when, where, and how subscribers are most likely to embrace them.

But as they move away from flat-rate schemes, operators need the flexibility to customize plans and rates for different markets and subscribers. Tiered pricing gives them that flexibility by allowing them to meet individual subscriber needs with packaged service plans based on different classes of services and varying levels of service options.

Ingredients of a tiered-pricing plan can include network type, network state, service usage (time, volume, events), speed, QoS, device type, time windows (weekends, weekdays), location, subscriber information, application type or any combination of these.

To date, operators have taken multiple approaches to differentiating their plans. Some postpaid tariffs simply use volume or usage as the basis of the pricing model, while many prepaid models are based on time, volume, and bandwidth combinations.

Going forward, tiered-pricing capabilities will make it possible to mix any combination of ingredients to create product and service differentiation. Customer behavior will help drive this innovation – and monetize it – as customers select various capabilities based on their unique needs and requirements.

Operators can also partner with OTT vendors and agree to augment their services by providing obfuscated subscriber profile data to enrich OTT offerings or send promotions on an OTT provider’s behalf to the end users on a revenue-share or per-transaction basis.

Lastly, operators can compete by pioneering market-driven and value-added customer use cases to create marketable scenarios that customers will value. Customers don’t purchase functionality like advice of charge or notifications for excessive usage – they buy unique services that are of obvious value to them. Operators, by combining the abilities of their unique assets, can offer hundreds of possible customer scenarios to end users such as parental controls, location-based services like family locator and geo-fence, time or application-based bandwidth boosts, rate plan advisors, and personalized family plans to name a but a few.

And then there is the issue of operators’ own application stores... to embrace application providers and extend their offerings. But that’s a subject for another article.

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Addressing the Strategic Agenda Business transformation is today’s most pressing imperative for Communication Service Providers (CSPs) as they vie to stay one step ahead of an everchanging game. They must be able to bring about that organizational change while maintaining and even increasing the capabilities of the enterprise while it is undergoing transformation.

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TERESA SCHLEGELMAN, WORLDWIDE MANAGING PRINCIPAL, SOLUTIONS CONSULTING SERVICES, CMS, HP

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ransformation for the content, media and entertainment industries is a particularly tall order because the market is in a state of continual flux and change has to be carried through to success whilst balancing current business imperatives and requirements against the perceived and expected benefits that change will foster.

This is pretty much akin to trying to put a new engine in a sports car while maintaining sufficient momentum to keep it top gear, on the road and in the race. Not easy; you are likely to skin more than your knuckles if you are not very careful!

The entire process of business transformation is complex because it requires participants and stakeholders to take an all-encompassing, holistic view of the entire business and all the facets of it that combine to make up the whole.

That requires the discipline to undertake an objective analysis of process and the likely benefits as well as potential drawbacks of organizational change. It also requires a detailed examination of the human resources issue including frank appraisals of the strengths and weaknesses amongst the company’s staff together with an unflinching look at the technologies required to engineer transformation. An informed estimate of costs and calculation of a timeline for expected returns on what is, for any organization or enterprise, both an economic necessity and significant financial investment, is critical.

Transformation road map When this analysis and appraisal program is complete, the next step is the drawing-up of a road map for the implementation of transformation based on pragmatic reality rather than pie-inthe-sky hopes and dreams. Samuel Johnson, Sir Walter Scott and Karl Marx all separately observed, “the road to hell is paved with good intentions”!

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Transformation, and the key business results that such an exercise can drive, requires a cool, clear-headed examination of reality – not just wishful thinking.

Furthermore, many of the world’s CSPs are big corporations that have achieved their present size and eminence as a result of mergers and acquisitions as well as via long-term organic growth.

The result is that these companies often have a series of overlapping, redundant and outmoded infrastructures that must be rationalized if business transformation is to be a success.

The vertical silos of data and information that frequently characterize these organizations, combined with the outmoded proprietary applications, rigid processes and incompatible technology components that are an inevitable corollary of such systems not only affect the ability to quickly react to market changes engendered either by customers or corporate competitors, but also severely limits exploitation of new business opportunities.

That’s why a strategy must be devised and a clear evolutionary path defined and followed, driven by business requirements so as to have a direct and ongoing impact on market positioning, and backed by methodologies and best practices that minimize risk, quickly provide positive results and deliver quantifiable benefits including improved top line growth, the ability to capture new revenue, greater operational efficiency and an improved customer experience.

The HP approach The HP way is to analyze and describe the transformation process though building models that represent strategy, business metrics, services, processes, organizations, information systems and technology solutions.

HP CMS Solution Consulting Services (SCS) offers a comprehensive set of consulting capabilities that are product-agnostic, which allows expansion of the sphere of influence for HP in general beyond just technology and solutions, into an holistic approach.

These capabilities give SCS visibility and a footprint into a different constituency within the CSP space, gaining a greater level of visibility for its capabilities around transformation.

An integral component of SCS solutions is COSMOS. The use of COSMOS allows an organization or enterprise to slice painlessly through the complexities surrounding services and related business operations, to share structured knowledge and to be able to understand and evaluate the impact of evolutionary changes to the business environment and to design and implement transformation programs.

COSMOS does this by applying object modelling technology and the graphic representation of business and technology relationships to achieve a common understanding among the stakeholders across an organization. It provides an holistic view across the organization itself and across its value chains as well as representations

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Insights

many of the world’s CSPs are big corporations that have achieved their present size and eminence as a result of mergers and acquisitions... The result is that these companies often have a series of overlapping, redundant and outmoded infrastructures that must be rationalized if business transformation is to be a success. of the interrelations and interdependencies that sit at all business levels, leading users to an enhanced understanding of how these impact the enterprise.

Global expertise HP is a global company and every HP solution leverages proven global experience that spans people, processes and technology. And, as you would expect, HP Services’ consultants fully understand the communications, media and entertainment marketplace and are able to help companies get the most from their business technology investments.

SCS offers a comprehensive portfolio of consulting services and systems integration capabilities to enable the transformation of communications, media and entertainment business operations. In this regard SCS offers application modernization services providing a full range of current and future business need assessments, strategic and technological roadmaps for change, infrastructure transition services and monitoring services for the evolved application environments.

HP also provides mission-critical support and outsourcing and security services.Financing options are also available that can remove the final obstacle to network evolution and business transformation.

Magyar Telecom The Magyar Telecom project was about streamlining the provisioning of all of its services with its environment. The objectives were to increase efficiency within the organization and reduce costs while ensuring the deployment of the overall program.

Magyar has been delighted with the results and SCS is also very pleased to be part of the team excellence award that was bestowed in acknowledgment of the success of what was a complex product, to a tight timetable and within all the specified parameters in terms of changes, enhanced capabilities and budgets.

By Curtis Price, Vice President of Infrastructure Services, IDC

Transformation Challenges

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onvergence is altering the industry structure and expanding the competitive landscape to a plethora of new entrants in this marketplace. Web 2.0 companies like Facebook, Google, YouTube and others are all coming to market with very compelling value propositions.

The business models of these players are in constant odds with those of the established CSPs. Web 2.0 companies view transport as a commodity and they have focused on delivering value at the applications or services level.

CSPs need to find a means of differentiation against not only the traditional competition but also against these new entrants to the marketplace. Transforming their business operations is absolutely critical to give them that vital competitive edge.

They are really embarking on these transformation programs to drive specific strategic outcomes, and the three key imperatives are:

• Creating new sources of revenue and an environment where they can reduce the time to market for delivering these services • Improving the total customer experience • Eliminating costs Any sort of transformation tends to be a very difficult and challenging proposition for CSPs. Many believe that they don’t have the internal resources to carry out a large transformation program and so they’re looking for expert assistance from a third party.

This complexity revolves around people, processes and systems, and a change to one of those elements affects the other two. CSPs need to take a holistic view of their entire

organization and all their processes so that they understand what changes need to be made to improve those processes.

A lot of vendors are also focusing on a transformation theme, but we think that the one vendor that has a unique approach to transformation in the CSP space is HP. They’ve got a very innovative asset called COSMOS that they leverage to really drive successful transformation projects with CSPs around the world.

I think the real value of what HP is providing is in the broad set of capabilities around transformation that they put together from a consulting perspective. When you combine that with HP’s technology portfolio in the CMS space, you really have a strong foundation for delivering operational transformations; those transformations that drive the kinds of outcomes that service providers are looking for to really establish a strong source of competitive differentiation in the market.

I think the real value of what HP is providing is in the broad set of capabilities around transformation that they put together from a consulting perspective. When you combine that with HP’s technology portfolio in the CMS space, you really have a strong foundation for delivering operational transformations

Insights

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Outcomes that matter.

Learn more at hp.com/go/ascend

Erwan Menard, Vice President & General Manager, Communications & Media Solutions, HP

Transformation in Action: From Service Provider to Business Exchange Business transformation, as an abstract, even academic concept has been debated in the ICT sector for quite a few years now but it took a combination of events – the perfect storms of troubles that have hit the industry twice in the past decade – to “transform” the theory of transformation into a pressing immediate need and practical application

T

he double whammy that hit the ICT sector began with the bursting of the dot com bubble back in 2000. Then, after years of uncritical acceptance by analysts and the markets the nascent Internet and dotcom entrepreneurs would change the commercial world overnight and forever. And despite the marked lack of coherent business plans to supply some underlying structure and strength to all the froth and bubbles, it finally became evident that many of the self-styled emperors of the brave new world really had lost their clothes!

Many had been hiding that ugly reality behind smoke, mirrors and PR hype and the established and largely blameless ICT industry, which had been ploughing its own steady, independent furrow during all the tumult, was tarred with the same brush as the dotcom fly-by-nights and suffered accordingly.

For several years the sector was all but paralyzed by the worst recession ever seen in its 130-year history. Just as a slow recovery had at last began, it was hit by another massive blow – the global financial meltdown caused by the banking sector.

This time around though the industry was in better shape to weather a second storm having become leaner, meaner and more responsive during the first recession.

We saw the development of new comms technologies, emergence of new competitors and rivals to the established order, increasing availability of broadband access, ubiquity of Internet access, the plethora of content and content providers, the popularity and power of social networking sites and the giant Internet search engine companies.

All of this puts consumers squarely in the driving seat. If one service provider cannot immediately satisfy their demands they can, and will, move easily and quickly to become customers of another who will happily snap up the business.

Consumers are rightfully demanding and their loyalty has to be first earned and then carefully nurtured.

And that’s why business transformation is such a hot topic and vital discipline.

Insights

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What are the biggest challenges your organization has faced in successfully driving Transformation programs?

Implementation Pace of fulfilment Business/change capabilities Executive alignment Limited organizational momentum

Change, the only constant We are in an industry where, if there is one constant, it is change. The theory and terminology of transformation is by no means new but the meaning of transformation is changing. And we at HP have empirical evidence to support this contention.

We recently conducted some fascinating research, that we discovered resonates remarkably with our customers and partners.

In the past when people spoke of “transformation”, it was really a sort of code or shorthand. What they were really talking about was little more than cost savings and reductions. Now that has changed and “transformation” is now about actually evolving the business model that service providers are so reliant on.

It’s about them identifying and capturing new revenue streams and about being more agile and responsive at operating their businesses. That’s why I say the concept of transformation is itself being transformed.

Nine out of ten businesses are transforming – now!

Let me give you a bit of context on the research itself. Here at HP CMS we regularly ask C-level executives at service providers in countries all over the world for their input and opinions and recently we have been asking a couple of really simple, straightforward questions before we delve deeper into the research.

We start by asking “Is your company conducting any sort of transformation process or exercise right now?” And a remarkable 97 per cent* of respondents said, ‘Yes, we are’. Now that is an astonishing indication of just how important transformation is.

The next question is, “What makes transformation difficult, or might even cause the process to fail?” Now, you might expect the response to be along the lines of ‘our initial business case assumptions were wrong’, but that is not what we found.

The reality is that 65 per cent* said that the pace of implementation of transformation is the biggest headache and added that if the impetus and speed of the exercise falters, then the whole process can fail completely.

From an HP CMS standpoint that’s what brings us right back to the fact that, first and foremost, transformation is about people.

It’s what humans do – not robots or machines. And people want to partner in the transformation with people who do what they say they will do. And that’s exactly what we do at HP CMS. There’s more to it than money Of course the traditional metric for measuring the success of a transformation is financial. Lower capital and/or operating costs, new revenues streams, improved profitability and so on – but it’s not the only measurement and the HP CMS research also asked, “How do you measure the success of transformation above and beyond financial metrics?”

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Rollout/embedding Weak business case (and/or no budget) Technical capabilities Other 0

2

4

6

8

10 12 14 16 18 20

Which non-financial measures are most important to your organization when assessing the impact of Transformation?

Customer satisfaction Productivity Employee satisfaction Time to market Other 0

4

8

12

16

20

24

28

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Well, it turns out that THE paramount indicator of successful transformation is improved customer satisfaction. Indeed, 97 per cent* of respondents cited customer satisfaction and better customer experience as the fundamental reason for undertaking transformation in the first place – as well as being the Number One measure of the success of the entire transformation process.

Following on from that, 88 per cent* of the respondents to our research questions cited the maximization of margins from their existing portfolio of services and applications as another key reason for undergoing transformation. They want to sell more and realize more from what they already have.

Furthermore, 88 per cent* also said they wanted to transform to improve business agility and reduce time-to-market for the launch of new offerings.

Finally, 56 per cent* undertake transformation to reduce costs, while 32 per cent* want to launch new services and expand their market profile to increase revenues.

In essence, transformation makes the difference between surviving and thriving.

Technology to Business Transformation (T2B) So far we have been looking at transformation “in the round” as it were, but as the concept changes and adapts there are subsets of transformation within the greater overarching subject. For example, there is Technology to Business Transformation (T2B).

We’re a business that has been very technology-driven but times are changing and now the emphasis is on delivering desired business outcomes and to achieve that we must satisfy three critical factors.

First off is the need to focus on business needs. When these have been analyzed and itemized we can then create a technology blueprint for the eventual solution, but getting the business needs in order is the first priority.

Secondly, we have to leverage our own expertise and the expertise of our service provider customers to ensure that we have people on the T2B transformation teams who can cross the divide between the network and IT. Thirdly, we must ensure that T2B transformation applies to entire end-to-end life cycle of design, build and operate and to ensure that we take full advantage of aids such as blueprints and that we

From an HP CMS standpoint that’s what brings us right back to the fact that, first and foremost, transformation is about people. It’s what humans do – not robots or machines. And people want to partner in the transformation with people who do what they say they will do. And that’s exactly what we do at HP CMS Insights

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take full cognizance of the best practices as already proven and established by other service providers around the globe.

Cross-business transformation Another attribute of this subject is cross-business transformation. In the past many transformations were partial in that they were compartmentalized and addressed only a given silo within a service provider’s organization. Overarching, comprehensive transformation was practically unknown until networks began to move towards an all-IP environment and BSS systems evolved to become convergent BSS systems.

Most of the transformations we at HP CMS are working on with customers right now stretch horizontally across all the vertical silos in a service provider’s organization including the network, BSS, OSS, service delivery and applications. We cover and cross-over these assets because transformation is about business and the processes required to make a business more effective, competitive and profitable.

The proof of the pudding That’s the theory but what about the practice? After all they do say that the proof of the pudding is in the eating. So what is HP doing in the real world with real customers?

For obvious reasons we can’t talk too much about transformations that are taking place now; that we’re helping to bring about in ongoing partnerships where the exercise is not yet complete.

But here are a few real-life examples of HP CMS customers analyzing their business processes to deliver improved operational agility and focused on business outcome objectives. There’s Magyar Telekom in Hungary, DTAC in Thailand and SFR in France.

Magyar Telekom – We developed a single, consolidated platform, called Service Provisioning and Activation (SPA) that uses HP Service Activator to automate key processes and workflows. The solution is now in operation for new IP services and Magyar plans to extend it to the rest of its services portfolio.

The result for Magyar is a more flexible platform that has increased efficiency, reduced costs and shortened implementation time. It has also laid the foundation for a more comprehensive service management layer that will link all OSS elements into the platform’s framework.

SFR – With SFR, a leading French telecoms operator serving more than 30 million subscribers, HP enabled the service provider to generate new revenue by extending the advantages of cloud computing to its business customers. Together we built a complete cloud services platform to enable SFR to offer IT infrastructure as a service (IaaS) with utility-based pricing to French companies.

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HP CMS is on a mission to enable service provider customers to transform themselves into business exchanges because times are changing so very quickly and business exchanges are the wave of the future.

With the HP CSE portfolio, SFR business customers can take advantage of a wide selection of services on demand, guaranteed quality network bandwidth and access to state-of-the-art IT technology. And, for SFR customers, the business benefits include predictable operating costs, reduced capital investment and decreased risk in adopting new technology.

DTAC – HP CMS worked with DTAC, the second largest operator in Thailand, on its business transformation. As a result of the collaboration DTAC was able significantly to reduce the level of costs associated with the operations of its IT and OSS environments. Furthermore, because service availability was markedly enhanced, customer satisfaction rose, churn levels fell and ARPU was improved across the board.

People Power HP CMS has a strong position in enabling business transformation, but this is the real world and there are plenty of competitors who claim to have similar antecedents and expertise. The million dollar question then is “What’s your USP? What does HP CMS bring to the party that others can’t?“ It’s our people, without any doubt. You’d expect HP to have leading-edge technology and we do, but what we bring to the table is industry solutions in the shape of service offerings that are differentiated in terms of intellectual property, technological know-how and PEOPLE. Our customers tell us, ‘We like working with you because you do what you say you will do’.

In any transformation project of course technology matters. Of course expertise is important. Customer references are important.

Brand values, brand strength, perception of HP as a company that has been here for a long time and will be around for much longer – all that is very important. But, in the end the ultimate differentiator is our people and that’s why at HP CMS we place so much emphasis on the people dimension.

HP CMS is on a mission to enable service provider customers to transform themselves into business exchanges because times are changing so very quickly and business exchanges are the wave of the future. *Source: Hewlett Packard Global Transformation Study 2010 (in collaboration with Frost & Sullivan)

Outcomes that matter.

Learn more at hp.com/go/ascend

to a bolder, brighter communications future.

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Get ready to discover a new world of business opportunities with HP. Outcomes that matter.

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Copyright Š 2010 Hewlett-Packard Development Company, L.P.