Changing The Way We Think About Telecom

By Mark Swanson

Over the past decade, the Telecommunications Industry as we know it has undergone fundamental changes which have changed the ways business use services. The “Old” structure was based on the tight integration of critical communication functionality – primarily around voice services. These services were provided by a very limited set of players, with the core of the network supplying a tightly integrated set of limited features, and consumers, at the edge, consuming them. Success for the incumbents was based on owning the core. However, the advent of Voice over IP coupled with ubiquity of the Internet has decoupled service and delivery. As a result a plethora of new services, features and functionality has dramatically changed the way businesses are able to operate. Think mobility, distributed communication, and real-time metrics. As a result, a new set of communications service providers has emerged where ownership of the core and edge are no longer meaningful in driving innovations and business models of the future.

The last decade has birthed a large number of innovative, next generation communications services companies that are reshaping the landscape of the telecommunications industry. Starting with the rollout of Skype in 2003, innovative firms around the world have been launching edge based services that are completely changing the dynamics of the telecommunications services industry. Innovative companies like Angel.com, inGenious, DemandVoice, Twillio, Voxeo, have launched with very little investment and have generated significant value by leveraging the decoupling of services on the edge from the core network. These low cost, well targeted and innovative products have lead to the realization among carriers that voice is fast becoming a commodity and the real value of these services are the customer facing applications that impact customers business models.

However, demands on the core have also skyrocketed as these services mostly depend on an efficient and effective network to deliver the value they promise. New Internet services such as YouTube, NetFlix and Vimeo are flooding the Internet with trillions of packets of video each day generating ever increasing demands for bandwidth and intelligent technology to manage this demand. Today, YouTube alone consumes over three times as much bandwidth as the entire Internet consumed a decade ago. Without proper “management” of this network, many value added services will just get drowned in a sea of Data measured in PetaBytes – that’s a million times a Gigabyte.

Success for the communications company of the future is managing the delivery of this innovation. Speed comes by implementing changes in the technology, business, and regulatory space to deliver real value to the customer. Previously scarce resources, such as servers and networks, have become easily and widely available, reducing the barrier of entry for new players.  As a result, like Skype, most of these services emerged in the consumer market, where bleeding edge services are not subject to the five nine requirements of a business. However, the most important questions for a business customer, in particular for new services, are does it provide me a competitive value proposition and does it work?

The issue of network control is key for evaluating the success of innovation.  It has to work. Innovation became possible by being able to flexibly place control points throughout the communication infrastructure. Consequently, methods for evaluating the future value chain need to take this flexibility into account. With this, it seems obvious that constructs like core and edge within the communication networks no longer suffice to lay out the possible future industry value chain. These services have to be managed.  Ownership of the core network established the current industry incumbent and their success. Creating an easy to use user interface to deliver decoupled services where the guarantee of delivery is paramount is the key to success for a new breed of teleco

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Does your IT team have CDD?

by Mark Swanson

No one can argue against the fact that the depth and breadth of business technologies in use today has gotten, well, much deeper and wider in the last decade. Ten years ago, IT teams primarily worried about desktops, servers and network connectivity. The corporate marketing department primarily managed websites as ‘brochureware,’ smart phones did not exist, only one out of 10 computers were portable laptops, and there was a ‘phone guy’ who managed the phone system.

Today, the situation is dramatically different. Not only do IT teams have to manage traditional IT services, but they also must corral all the new information technologies that have emerged in the past decade. The expanding list of new technologies is growing faster than the national debt — smart phones, tablet computers, remote desktops, VPNs, VoIP, the cloud, the list goes on and on.

“This has led to a condition among CIOs and IT managers that I refer to as competency deficit disorder (CDD).” I define CDD as the inability to manage the various technologies that you choose to deploy in your business. It happens when IT’s focus moves from delivering strategic value to the business to pursuing an agenda of buying technologies as a response to management’s obsession with cost control. When you choose to purchase based only on cost, you make dumb decisions like buying cheap while at the same time paring down your IT staff and bringing previously outsourced services in house. The result is your remaining staff runs around like chickens with their heads cut off, trying to fix things that break more often and that they have little or no training on. It’s like a never-ending tsunami of problems. These keep you from focusing on the projects that move the business forward.

How does the emergence of cloud technologies impact CDD? The cloud is the solution to CDD. Well, not quite, but the availability of cloud-based IT solutions offers some cures for CDD. One primary benefit is the reduction in wasted software licenses. A 2001 study claimed that 30 percent of software that companies bought was never even deployed — costing businesses an astonishing $130 billion. The primary reason was that IT personnel did not have the time to develop a competency to get the software up and running. The great advantage of Software as a Service (SaaS) is that you can start with one seat, try it out, and if it works, scale from there. If not, turn it off.

Another big cure is the ability to have a support staff that knows the product when you need it. A lot of times when a system breaks, it might not have been touched for months. Your support staff might not even remember the log-in password. You can’t have competency in a system that is barely used and you can’t afford to pay someone to maintain that expertise. I have Cisco Certified Engineers on staff that cost more than $100,000 and use that skill every day. The point is to choose — narrowly — the systems your IT team should focus on and find good cloud-based providers who have that competency for the rest.