By Joy King, VP of Marketing,
Optiva • March 15, 2023
Joy leads Optiva’s Marketing organization. She has three decades of software industry experience. Previously, she led Product & GTM Strategy, including Product Management & Marketing, for Vertica, a high-performance unified analytics platform leveraged by the telecom industry. Before Vertica, Joy led telecom industry marketing for HP and HPE for over a decade. Her experience has created a passion for what’s possible, and she’s determined to make it happen.
After years of GSMA/MWC in Cannes and Barcelona, I was finally back on the show floor last week. As I walked through the halls, talked to so many different people, and looked at the messaging surrounding me, I was struck by the fundamental shift in the definition and understanding of one very keyword – scale.
There was a time when the telecommunications industry was the definition of scale. Custom-built infrastructure and software were developed either in-house or in partnership with a small set of well-known providers. There was no other option, nor were other options really needed.
Competition was controlled due to the immense amount of capital required to become a telecom industry player as well as the complex regulatory structure in every country which was a roadblock to new entrants. As a result, speed to market for new services, the development of new business models, and implementation of new operational efficiencies was not a top-of-mind concern.
While the telecom industry continued on the well-known path to “next-gen” connectivity like 3G, 4G, and 5G, the Silicon Valley boom was well underway. Amazon, which had evolved from a digital bookstore to a broad e-commerce marketplace, wanted to leverage its e-commerce platform and help third-party merchants build shopping sites on top of the rapidly growing Amazon platform. Custom integrations, one at a time, were not considered an option by the tech players. That was not their definition of scale, in stark contrast to the telco industry model.
Instead, Amazon created a structured and well-documented set of APIs that streamlined and accelerated the development and integration process, enabling new revenue opportunities for an enormous developer community. The next step was offering a unified infrastructure architecture spanning compute and storage managed with maximum efficiency so that all internal developers and external partners had the advantage of a simplified and unified platform and time-to-market process.
In 2006, Amazon recognized that its internal infrastructure and developer APIs had external market value. In August of that year, Amazon Web Services launched Amazon Elastic Compute Cloud, the first “infrastructure as a service” offering, fundamentally redefining innovation at scale.
Public cloud compute and storage is not materially different from the connectivity services that the telecom industry offers, and many analysts initially believed that the public cloud would become a grid commodity from a financial point of view. Commodity businesses are valid business models but continuously struggle with revenue growth and profitability, something the telecom industry has struggled with for nearly a decade. Network connectivity and cloud compute/storage are the lifeblood of our world today, and that won’t change.
But one very important difference between the two industries will have a major impact on future success, especially profitability. The hyperscalers, especially AWS, Google, and Microsoft, turned the traditional telco headwinds into tailwinds, streamlining partner ecosystems, including contracting and procurement, onboarding, delivery and settlement, and driving new and long-tail revenue streams. How did they do it?
They productized and automated, ensuring that slow decision-making, complex procurement processes, custom development of siloed billing, and other operational components of the stack don’t deliver frustrating customer experiences. They continuously focus on operational improvement beyond just cutting costs.
The telecom industry is working closely with the hyperscalers, but are they learning from them? Are the telcos recognizing the need to change not just what they do, but how they do it? Now is the time to simplify, unify and monetize, through productization and automation, with an obsession for an intuitive and digitized customer experience.
Those who embrace these changes will promote their recognition as growth brands, driving higher customer loyalty and enabling new service offerings that continuously contribute to revenue growth and profitability. Those who choose to follow the traditional path will inevitably become commodity infrastructure providers, which is a valid but much less interesting business model.
As for my willingness to embrace change, I am proud to say that the days of high heels and fancy clothes are behind me, and comfy sneakers were a welcome innovation to my MWC participation.
Have feedback or questions for the author? Contact Joy King, VP of Marketing, Optiva
Want to know more about Optiva’s 5G-ready proven BSS that powers brands globally? Request a presentation.
Discover and read more → Disruption and Opportunity: How Hyperscalers are Transforming Telecoms