Can digital marketplace partnerships help telcos crack the small business conundrum?

Communications Service Providers (CSPs) have faced challenges growing their revenues beyond basic connectivity from small and medium-size enterprises (SMEs). Hurdles include the sheer number and variety of SMEs, as well as the complexities involved in stitching telco and third-party solutions together into a coherent offering.

Yet, CSPs have a long history of serving SMEs. As a result, they have in place connectivity products and local sales and services channels that make them interesting partners for cloud hyperscalers also looking to address the SME market. But can everyone benefit equally from the arrangement? It’s one of the questions we discussed with Ramesh Nagarajan, Head of Network Modernization and Partnerships, Telecom Industry, at Google Cloud, Jonathan Sorum, Head of Center of Excellence, Telecom Channel at Google Cloud, and Samer Geissah, Director of Technology Strategy and Architecture at TELUS in interviews for Inform.

SMEs worldwide are expected to spend US$11.45 trillion on IT in 2023, according to Analysys Mason. Within that, more than US$66 billion is forecast to be spent on IT solutions from operators, which does not include communications services. The analyst firm said SMEs are increasingly looking to CSPs for “IT advice, support, and services” with a recent survey showing 80% would consider taking IT services from operators.

Unlike large enterprises, SMEs often do not have in-house IT expertise or the budget to hire systems integrators (SIs) and need more support with IT services. While some are further along in their digital transformation journey, others may find it daunting to navigate the market for business applications and digital solutions to even know where to start.

“The smaller SME customers rely a lot more on operators because they have more boots on the ground. They not only have the sales staff, but they also have the natural touchpoints. For any operator customer, there are multiple touchpoints like physical mailers [in the post], emails, visits to the website, or even better, a marketplace solution. If the customer is big enough, then they have an account manager, who frequently calls or meets with them,” said Sorum.

Operators are well placed to step up and fill the digital gaps for SMEs given their existing customer relationships and the connectivity services they already provide, according to Google Cloud. And courting SMEs is on the agenda in the C-suite as operators look at “opportunities for growth and how to partner for growth,” said Nagarajan.

While CSPs want to help SMEs unlock new revenue opportunities and drive growth, they face multiple challenges as they look to offer scaled-down versions of large enterprise solutions or repackage consumer products. Now, some operators are building or partnering on digital marketplaces for SMEs, with the aim of curating digital solutions and tailoring offerings for SMEs in a way that minimizes the cost to serve.

“You need to provide an easy way for SMEs to discover the tools they need and get recommendations from the [marketplace] community. And then provide an easy way for them to sign on, on board, and consume those products … as well as analytics to give them visibility into how they are using the products and how their usage can be optimized,” said Nagarajan.

From transaction to trusted advisor

Operator B2B marketplaces are not new but they have been largely limited to reselling third-party software-as-a-service (SaaS) products, according to Google Cloud. It sees an opportunity to help CSPs do more with digital marketplaces and engage more closely with SME customers. Rather than selling products in a transactional relationship, CSPs can become “trusted advisors” for SMEs through each stage of their business growth.

This requires understanding typical pain points for SMEs and grouping products and services that will solve those business problems. Through a digital marketplace, operators can curate relevant digital tools, create pre-integrated solutions for specific use cases, and provide additional services such as training courses from a wide variety of partners, including third-party SaaS providers, hyperscalers such as Google Cloud, as well as their own 5G, fixed broadband or other services, explained Nagarajan. It also allows operators and marketplace participants, including resellers, to co-create solutions for sectors that have unique requirements, such as a point-of-sale service for retail SMEs.

Nonetheless, there are several challenges, including management of the full lifecycle of partners from onboarding to order fulfillment and settlements, packaging CSP and partner products and the ability to go-to-market at speed with these offerings, intuitive digital shop fronts and self-service, and flexible go-to-market models from B2B to B2B2X and N-tier reselling. Here, the TM Forum’s work on Open APIs and digital marketplaces helped to bring Google Cloud’s SMB platform ecosystem to life, said Nagarajan.

Digital marketplaces speed time to market

One CSP partner that Google Cloud works with is TELUS, which is investing a lot of effort to understand what SME customers need beyond connectivity and considering zero-touch digital marketplaces and industry solutions to serve them.

“By putting ourselves in the customers’ shoes, we realize we need an open ecosystem that will allow us to onboard a lot of partners and combine them into propositions that make sense with our connectivity,” said Samer Geissah, Director of Technology Strategy and Architecture at TELUS.

The operator has found that small businesses are having to go to multiple providers to find the business applications they need, which makes procuring services difficult and time consuming. There is a large opportunity to help them by becoming their partner and providing an ecosystem where they can “get a really good deal by combining connectivity and value-added services,” he said. In turn, this could also enable new products to come to market faster and greatly improve the customer experience.

Currently, trials are in the works for a digital marketplace that would leverage TM Forum’s Open API principles through the ongoing partnership with TELUS. With an existing relationship with Google Cloud, coming together to build an ecosystem on top of a cloud environment will enable the most innovation and ability to bring additional partners on board.

Along with a customer front end to make exploring, buying, and using digital business apps easier, TELUS and Google Cloud and its ISV partners are looking to implement a partner management portal that allows third parties to access the operator’s provisioning, billing, and inventory management through Open APIs.

“If we’re able to onboard third parties that have Open APIs in days instead of months, that’s really the strength we were looking for…Within days, we can take a proposition to test in the market. If it works well with our customers, great; if not, we move on and pivot to another product. Making those products continuously adaptive to customer needs is the most critical when using this architecture,” said Geissah.

Google Cloud has also partnered with Indosat Ooredoo Hutchison, a leading operator in Indonesia, to develop a software-as-a-service marketplace, according to Nagarajan. Google Cloud says the marketplace is designed to make it easier and faster for Indonesia’s millions of micro-to-medium-sized businesses to fully digitize their offerings and operations. Offers include Google Business Profile, Google Workspace, artificial intelligence and machine learning to automate operations and smart data analytics to deliver better customer service.

“If [operators] support them through the whole journey and become the trusted advisor, then it becomes a sticky engagement. This also helps with profitability and reducing churn,” Nagarajan continued, noting that this is a new way of engaging with customers for most operators, which are typically “more transactional.”