Agile, fast, value, innovative. Just a selection of words that could grace the website of any telecoms vendor. Any CIO or CTO in a telecom or cable service provider (the “operators”) who has just seen the bill and the timescale for a change request for new BSS functionality, would probably laugh (or maybe not) at the irony of the vendors’ messaging. In reality most telecoms software / solution vendors could post the following list of characteristics on their website: expensive, change request fixated, slow projects with long implementations, inflexible, self-serving and closed.

The problem with telecoms (wireless, fibre or cable) – both for many vendors and operators – is that there is still a notion that business processes and practices that worked well in 2005 are going to work well in 2018. Back in 2005, vendors charged very large up front licence fees for BSS (e.g. billing), ran implementation projects that could go on for years and encouraged the operators to buy all their OSS / BSS solutions and, in the cases for the equipment vendors, network gear, from a single vendor. The telcos ran very long, very intensive procurement processes. These had long lists, RFIs, short lists, RFPs, ever shorter lists before deciding on which vendor to enter into a long and (often) unhappy marriage with.

Look at the evolution of Internet Service Providers and consider the following examples press coverage that highlight of how things changed in the Internet Service Provider Space over the past few years:

“Amazon, Facebook, Google give Cisco’s switches the COLD shoulder

Microsoft and cloudy pals go DIY as networking giant’s stock plummets”

By Jack Clark in San Francisco 18 Nov 2013 

“Dell. EMC. HP. Cisco. These Tech Giants Are the Walking Dead”

Metz business 10.12.15

“Amazon claims another victim: Cisco kills its $1 billion cloud”

Julie Bort

Dec. 14, 2016

The economics of the internet didn’t allow for vendor models that promoted high priced, specialised and proprietary software and equipment – and Darwinian behaviour took over. The result was that the Internet Service Providers, frustrated by old school legacy vendor behaviour, innovated using new development models incorporating open systems.  Given that most telecoms operators say they want to adopt the lean, fast business processes and models of the Internet Service Providers how much can be gleaned from the internet model and how quickly and easily can it be put into practice?

So of course, now that it’s almost 2018, has everything changed for the telecoms operators too? There is little actual change for the operators in terms of how their vendors serve them – the real change being in the way that competition from internet service providers has grown hugely in terms of services and customer relationship ownership. This has really impacted savagely on the operator top line revenues and profitability. So have the vendors adapted and evolved to address the inevitable Darwinian forces? Well generally no. Unfortunately not. Despite a lot of fancy vendor slideware and generally poorly understood buzz-words, sadly some vendors are still acting like its 2005 and placing the current needs of the operators’ way down their list of priorities.  Other vendors are changing, but they’re not changing fast enough to give their customers (the operators) the edge that they need to compete and win. There is an underlying focus on milking as much short term revenue out of the service providers as possible.  This involves the following: making projects go in slow, making sure change requests are the order of the day, having very heavy up front licences, having commercial barriers in place to hinder the implementation of the open ecosystems and being fanatical about retaining control of the overall project. Recognise any of these?

The current operator / vendor model is broken. It needs to be fixed.

Here’s some areas where vendors need to change:

Changing commercial models to remove costs. Vendors need to work with operators to look at newer pricing models that are more webscale than phone company. As a service type pricing and even revenue share for new business areas all need to be considered. Vendors say that they want to enable a ‘fail fast, learn fast’ capability in their customers. It’s pretty hard to have this when any software project has a massive up front licence fee that needs to be recouped.

Changing the enabling technology to deliver faster and more agile solutions. These solutions don’t just involve the vendor’s software. They can include open source and also software from other vendors. Advances in software modularisation, APIs and microservices, means that operators can have much smaller projects that are focused on delivering quick wins.  This is the polar opposite of the large mega-systems that take 3 years to implement, cost $100M and will be out of date by the time they go live. This approach to deliver faster, smaller solutions gives more freedom to operators to say goodbye to vendor lock-in and have solutions which are much less expensive and are delivered faster than traditional software projects. The internet teaches us lessons here that apply to the operator technology and market needs in 2018: agile non-complex applications for some services, automated service capsule capabilities for some services and microservices modular software for some services. These are now requirements from technology vendors – not simply desirable future states on roadmaps.

Changing the enabling technology to deliver faster and more agile solutions. These solutions don’t just involve the vendor’s software. They can include open source and also software from other vendors. Advances in software modularisation, APIs and microservices, means that operators can have much smaller projects that are focused on delivering quick wins.  This is the polar opposite of the large mega-systems delivered by network equipment that take 3 years to implement, cost $100M and will be out of date by the time they go live. This approach to deliver faster, smaller solutions gives more freedom to operators to have solutions which are much less expensive and are delivered faster than traditional software projects. The internet teaches us lessons here that apply to the operator technology and market needs in 2018: agile non-complex applications for some services, automated service capsule capabilities for some services and microservices modular software for some services. These are now requirements from technology vendors – not simply desirable future states on roadmaps.

These changes are needed. Operators are wanting to get new services to the market quicker than before. They want to be able to compete for as large a percentage of their customers’ entertainment and services spend as possible. They want to quickly and cost effectively try out new business models and if something works then great, make the investment and grow. If it doesn’t work, then move on and try something new. But all too often vendors and the systems they provide don’t let these changes happen quickly enough, so innovation is stalled and nothing happens.

As well as vendors changing, there also needs to be changes in the operators. The lengthy procurement processes need to be dramatically reduced. There’s not much point in asking a vendor to deliver a system that is needed in 3 months’ time, if the procurement process takes 18 months. Agility cuts both ways. The operators also need to take a leap of faith when looking at vendors. It used to be that the accepted norm was to buy everything from the big equipment vendors then complain about vendor lock-in and massive IT costs. These days are gone and operators now have a real choice. These changes will save more than just money.

Niall Norton