Beyond Covid-19: CSP survival and 5G transformation in a new digital age
22 Sep 2020
Beyond Covid-19: CSP survival and 5G transformation in a new digital age
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In the early months of 2020, the dark clouds of Covid-19 swept across the globe, and the International Monetary Fund warned of the worst global recession since the Great Depression. We now see most countries substantially reopen with policies looking to drive economic growth and reverse the damage of lockdown. It’s now time to get back to the important question of 5G and whether the new emerging world will help deliver payback from CSP’s $1 trillion 5G investments.
During the peak of lockdown, there were a number of interesting new 5G research studies – including our own with OMDIA - all coming to similar conclusions. Firstly, 5G looks like it’ll be an outstanding success from a customer perspective, particularly for enterprises wanting to digitally transform faster, to rebuild better post-Covid. Secondly, other than the very largest multi-nationals, enterprise customers want to buy pre-packaged solutions that are easy to try, easy to buy and easy to consume. They don’t want to buy products like connectivity or edge then stitch them together with IT applications and AI to create a solution. It’s too slow, costly and risky. Thirdly, CSPs need to adapt faster, with only 21% of 5G innovations to date being CSP led compared with 40% for other solution providers and 32% for enterprises doing it DIY. So, what can CSPs do to increase this number to over 50%?
In adversity, telecoms have seen a bounce as they kept us all connected in lockdown. Alongside many home working and entertainment companies they provided an essential service. In the first weeks of the lockdown, the CTIA for the US mobile industry reported data traffic for its members was up 9.2% and voice up 24.3%. US Telecom for fixed line said the average for its members was up 25%.
Through their ability to provide steadfast connectivity, the crisis gave CSPs their moment to shine. However, solutions massively outsold products. In the same first few weeks, Microsoft Azure which powers communication platforms like Microsoft Teams, reported a 775% increase in usage in US locations. Cisco's Webex reported an unprecedented 2,400% increase. It’s clear that now is the time for CSPs to evolve from selling standard connectivity products to selling pre-packaged solutions that solve genuine business problems.
It’s true that cloud services have proved their mettle this year. eCommerce, video conferencing, VOIP, file sharing and collaboration are all possible because of cloud and the scalability, flexibility and agility it brings to service delivery. The switch from on-premise to cloud has allowed businesses to connect and access business-critical data and applications from anywhere, fundamental to operational efficiency, effectiveness and employee productivity during the pandemic.
However, many will have learned that they aren’t driving their digital transformation fast enough. A recent Gartner survey of enterprise reported Global ICT is growing by 1.1% CAGR out of which Cloud is growing by 25% so cannibalizing existing ICT spend to take a larger slice. The pandemic will surely mean an acceleration towards migrating and consuming everything as a cloud service.
5G, mobile edge compute (MEC) and IoT should force CSPs to adapt digital platform business (DBP) models to better manage commercial relationships across a multi-party ecosystem that forms a marketplace. Digital business platforms such as our Infonova solution have proved to be a solution, allowing CSP to rapidly grow new solution revenues by bringing in complimentary capabilities from partners to co-create joint offerings that add far more value and forge closer relationships with customers. The challenge is that CSP are still organized in a way that best suits how they want to run their business rather than in a way that best serves customers. Consequently, CSPs are often too siloed and push cost and risk to customers by selling only very standardized products rather than complete end-to-end solutions that neatly solve defined customer business problems. This is the digital way.
Starting a lengthy R&D process to develop new solutions with a blank sheet of paper is too time consuming. Defining a sweet spot and seeking out the right partners, onboarding them and co-creating solutions is the way forward. Solutions can be onboarded within days meaning CSPs can innovate and experiment in the market before rapidly launching at scale – 8 weeks from idea-to-prototype-to-launch should be the aim. The target is not necessarily the largest multi-nationals (who have the scale to go DIY), but rather the next tiers right down to small and medium sized business (SMB). A digital business platform enables extensive automation so customers can self-serve and self-configure, therefore orchestrating the monetization of the entire ecosystem if they want a super simple buying experience.
Incorporating a digital platform model into CSP’s current business model requires a clear understanding of the synergies between old and new models. As a first step, gaining insight into customer needs and where they are poorly served by existing legacy products or where there is an outstanding business case for a customer to digitally transforming is a good starting point. It means a closer relationship with customers. There is considerable research on this and areas like smart manufacturing hold significant promise.
In order to achieve ROI, it’s unwise to rebuild what’s already out there. Place your bets where they can make a real difference for the company. Focus on differentiated offers and outstanding customer experience, not on rebuilding existing solutions and competing with infrastructure providers and software vendors. Standard functions can be provided by third parties and a SaaS based delivery model providing continuous upgrades is the preferred choice for offloading the operational complexity to the vendor.
Keeping these principles in mind, it’s possible to deploy a new platform and launch the first services to the market in a matter of weeks and roll out new services on a weekly basis from there.
New platform-based business models are something CSPs must adopt if they are to survive into the next decade, especially after recent lessons of Covid-19 and desires to rebuild better. Use an ecosystem of partners to bridge gaps in capabilities, to co-invest and co-innovate with you. Select the pathway that will help you get there fast while realizing synergies from existing business and identify the minimum viable product that will allow you to put this to the test. The result will be a higher level of innovation and revenue growth that will drive your business forward in a post-pandemic age.
To find out more about Beyond by BearingPoint and how it’s technology is helping CSPs such as Telia, Tata Communications, BNET and A1 to transform, please visit: https://www.bearingpointbeyond.com/en Or contact us at: infobeyond@bearingpoint.com
During the peak of lockdown, there were a number of interesting new 5G research studies – including our own with OMDIA - all coming to similar conclusions. Firstly, 5G looks like it’ll be an outstanding success from a customer perspective, particularly for enterprises wanting to digitally transform faster, to rebuild better post-Covid. Secondly, other than the very largest multi-nationals, enterprise customers want to buy pre-packaged solutions that are easy to try, easy to buy and easy to consume. They don’t want to buy products like connectivity or edge then stitch them together with IT applications and AI to create a solution. It’s too slow, costly and risky. Thirdly, CSPs need to adapt faster, with only 21% of 5G innovations to date being CSP led compared with 40% for other solution providers and 32% for enterprises doing it DIY. So, what can CSPs do to increase this number to over 50%?
Solutions that solve a specific problem will trump generic products and services
In adversity, telecoms have seen a bounce as they kept us all connected in lockdown. Alongside many home working and entertainment companies they provided an essential service. In the first weeks of the lockdown, the CTIA for the US mobile industry reported data traffic for its members was up 9.2% and voice up 24.3%. US Telecom for fixed line said the average for its members was up 25%.
Through their ability to provide steadfast connectivity, the crisis gave CSPs their moment to shine. However, solutions massively outsold products. In the same first few weeks, Microsoft Azure which powers communication platforms like Microsoft Teams, reported a 775% increase in usage in US locations. Cisco's Webex reported an unprecedented 2,400% increase. It’s clear that now is the time for CSPs to evolve from selling standard connectivity products to selling pre-packaged solutions that solve genuine business problems.
Digitalization is needed more than ever
It’s true that cloud services have proved their mettle this year. eCommerce, video conferencing, VOIP, file sharing and collaboration are all possible because of cloud and the scalability, flexibility and agility it brings to service delivery. The switch from on-premise to cloud has allowed businesses to connect and access business-critical data and applications from anywhere, fundamental to operational efficiency, effectiveness and employee productivity during the pandemic.
However, many will have learned that they aren’t driving their digital transformation fast enough. A recent Gartner survey of enterprise reported Global ICT is growing by 1.1% CAGR out of which Cloud is growing by 25% so cannibalizing existing ICT spend to take a larger slice. The pandemic will surely mean an acceleration towards migrating and consuming everything as a cloud service.
Deploy technology that is scalable and facilitates a multi-party ecosystem
5G, mobile edge compute (MEC) and IoT should force CSPs to adapt digital platform business (DBP) models to better manage commercial relationships across a multi-party ecosystem that forms a marketplace. Digital business platforms such as our Infonova solution have proved to be a solution, allowing CSP to rapidly grow new solution revenues by bringing in complimentary capabilities from partners to co-create joint offerings that add far more value and forge closer relationships with customers. The challenge is that CSP are still organized in a way that best suits how they want to run their business rather than in a way that best serves customers. Consequently, CSPs are often too siloed and push cost and risk to customers by selling only very standardized products rather than complete end-to-end solutions that neatly solve defined customer business problems. This is the digital way.
Starting a lengthy R&D process to develop new solutions with a blank sheet of paper is too time consuming. Defining a sweet spot and seeking out the right partners, onboarding them and co-creating solutions is the way forward. Solutions can be onboarded within days meaning CSPs can innovate and experiment in the market before rapidly launching at scale – 8 weeks from idea-to-prototype-to-launch should be the aim. The target is not necessarily the largest multi-nationals (who have the scale to go DIY), but rather the next tiers right down to small and medium sized business (SMB). A digital business platform enables extensive automation so customers can self-serve and self-configure, therefore orchestrating the monetization of the entire ecosystem if they want a super simple buying experience.
Shift your focus from the mainstream and go agile
Incorporating a digital platform model into CSP’s current business model requires a clear understanding of the synergies between old and new models. As a first step, gaining insight into customer needs and where they are poorly served by existing legacy products or where there is an outstanding business case for a customer to digitally transforming is a good starting point. It means a closer relationship with customers. There is considerable research on this and areas like smart manufacturing hold significant promise.
In order to achieve ROI, it’s unwise to rebuild what’s already out there. Place your bets where they can make a real difference for the company. Focus on differentiated offers and outstanding customer experience, not on rebuilding existing solutions and competing with infrastructure providers and software vendors. Standard functions can be provided by third parties and a SaaS based delivery model providing continuous upgrades is the preferred choice for offloading the operational complexity to the vendor.
Keeping these principles in mind, it’s possible to deploy a new platform and launch the first services to the market in a matter of weeks and roll out new services on a weekly basis from there.
Thriving and surviving beyond Covid-19
New platform-based business models are something CSPs must adopt if they are to survive into the next decade, especially after recent lessons of Covid-19 and desires to rebuild better. Use an ecosystem of partners to bridge gaps in capabilities, to co-invest and co-innovate with you. Select the pathway that will help you get there fast while realizing synergies from existing business and identify the minimum viable product that will allow you to put this to the test. The result will be a higher level of innovation and revenue growth that will drive your business forward in a post-pandemic age.
To find out more about Beyond by BearingPoint and how it’s technology is helping CSPs such as Telia, Tata Communications, BNET and A1 to transform, please visit: https://www.bearingpointbeyond.com/en Or contact us at: infobeyond@bearingpoint.com
Beyond by BearingPoint is a platinum sponsor of the Digital Transformation World Series.
While we can’t meet physically, we’ve reimagined everything you know and love about Digital Transformation World and turned it into a six-week digital event. The Series will offer a varied and engaging content program that will enable our global membership to connect, learn and collaborate, supporting all time zones. Don't miss out on the festival of collaboration!
Register today. Note: Communication service providers: you can claim your free pass here.
While we can’t meet physically, we’ve reimagined everything you know and love about Digital Transformation World and turned it into a six-week digital event. The Series will offer a varied and engaging content program that will enable our global membership to connect, learn and collaborate, supporting all time zones. Don't miss out on the festival of collaboration!
Register today. Note: Communication service providers: you can claim your free pass here.
