The Effect of Software People on Telco – Updated

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The Effect of Software People on Telco – Updated

On June 18, 2014, Posted by , In News, By ,,, , With No Comments

This is a long overdue follow up to a presentation I gave back in March looking at the Startup Disruption in Telco. That talk was from the perspective of the startup / entrepreneur. This talk is from the perspective of the Telco.

Some of the content is reused from the first incarnation of the talk which I wrote back in July 2013, but there is also a lot of new content and some simplification. Read that as less data and charts! I delivered this talk at the Telco Cloud World Forum in Munich on April 30th, 2014.

Ok, so lets get into the commentary. I’ve not expanded where the slide content is self explanatory. Where some additional thoughts where given live on stage, I’ve added them below.

Slide 1

It was only a 20 minute presentation, so I didn’t go deep into any of the topics I raised. The talk looks at the mindset, the DNA, of various players in the new mobile product & services ecosystem. It’s not a technical presentation, it’s focused on how people think.

And some of these people are now very much in the driving seat of mobile products & services.

So my goal is to provide some markers and to provoke some thoughts. Feel free to leave a comment / tweet if you want to expand on any of the points raised.

Slide 4

I’ve chosen to start with this tweet as I think it highlights a number of interesting things, at the heart of this talk. This was a Tweet Paul Graham posted after the announcement that Facebook were going to acquire What’s App. It was interesting when I asked the Telco World Forum crowd who had heard of Paul Graham, about 5 people out of a crowd of ~100 raised their hand.

To me this tweet highlights the PR challenge Telco’s face – “abusive monopolies” – very emotive language. It also reminds us that many startup’s succeed by spotting opportunities for disruption – quite different to the Telco mindset.

Slide 7

I’ve grabbed this diagram from Tsahi Levent-Levi. It helps illustrate those points about startups thinking globally and open from day 1 due to the web. Due to historical reasons Telco’s are vertical and specific to individual countries.

Slide 8

Today’s technology, society, business, customer experiences and customer expectations are a million miles away from 1985. These historical constraints & thinking have been baked into the Telco DNA over the past 30 years.

Slide 11

Having made those huge investments there is huge pressure on the Telco to pay back. Therefore the focus is on monitizing, retaining customers, and acquiring competitors customers. All this is happening while revenue and price erodes. It’s also a repeatable investment per country of operation.

Slide 12

Yet despite this burden, in the new world, Telco’s MUST resist the temptation to think defensively. They should shed the decades of control. Remember WAP, on deck content like Voda 360, Telco App Stores? The days of the Telco dictating to their customers which services they can enjoy is gone. Open has conclusively won in the services space.

Slide 13

The telco stack starts off identical to the web stack, then it stopped. For 100 years nothing has fundamentally changed. The Telco’s never created their WWW for 3rd parties to innovate on top of. That open thinking was missing. This is why, with the advent of mobile data, startups have just gone and done it anyway, giving birth to the OTT issue.

Slide 20

So the world is changing. Software people are the new creators and the new channel to market and APIs are the building blocks they use. It has moved from a direct to an indirect model. The Telco’s need to open up their networks and their mindsets. Embrace software people and stop trying to build product. If your company is not providing APIs for software people to innovate with, how long will you survive?

Slide 21

Another quote I love, this time by API pioneer John Musser. It’s from a few years back now, but John has been proven to be right. Providing the right tools to tap into Software People innovation has to be the way forward.

Slide 22

11,335 APIs were listed on Programmable Web as of last week. In fact 650 new APIs have been added to Programmable Web since January this year! Compare that to 32 public APIs in 2005. Mash ups are key – Developers combining your assets with the assets of others to create great experiences – its the opposite of control. Look at the company names in the Top 10 list of mash ups – the brands driving the new digital economy

Slide 23

Embracing the power of developers via APIs is liberating for your organisation. No longer do you need to come up with the next big thing. No longer do you need to pour millions into NPD only to find you have been out executed and brought your product to market 12 months late. How many water fall NPD projects can you take? Idea, customer research, RFQ, business case, product requirements, roadmap prioritisation, project team, customise the supplier product beyond recognition, bring to market, marketing campaign, miss internal expectations.

Slide 25

O2 UK feel that letting customers change their phone when ever they like before the end of their contract is worthy of a £5m TV campaign which is running at the moment. To me this is a powerful example of how the Telco’s have a hit an innovation wall.

Slide 27

Getting locked into one cash cow impedes your vision. Even if you ask customers what they want, when they give what you perceive as the wrong answer you ignore it, because the implications are just too scary. Kids have already moved to products that have small or zero profit for the Telco.

Let me know your thoughts.

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