Open APIs

Vodafone Chief Architect on why M&As need technological openness

Vodafone has been party to many of its own mergers and acquisitions (M&As) over the years, with first-hand experience of the complexities of understanding and integrating the IT architectures of different companies.

Questions of how to integrate systems arise, how to envelop the merged/acquired company within the current digital ecosystem and whether IT teams are even prepared for future enterprise.

A slapdash handling of technology issues can drain value from any M&A activity. I discuss with Dr. Lester Thomas, Chief IT Systems Architect, Vodafone Group, his and Vodafone’s IT approaches for executing a successful, derisked M&A deal, focusing specifically on the benefits of open APIs and an open architecture to enable a stealthy transition.

Dr. Lester Thomas, Chief IT Systems Architect, Vodafone Group

JOB: How much do you feel that an open architecture and open APIs have played a role in simplifying the M&A process?

LT: In working for a global multi-country operator like Vodafone, I assume that it’s going to be constantly either investing, acquiring or divesting every year. If you look back at the last few years, almost every year there’s been some sort of M&A activity with some operator; it’s almost like it’s just the done thing.

For me, the most important thing when I look at the IT architecture is the agility and flexibility to make these sorts of business decisions much easier to execute on. If you look back at Vodafone’s recent history, we’ve been buying TV fixed-line operations in different markets, and merging with different companies in different markets. Having an open modular and API-centric architecture, I believe, gives you this flexibility and this agility.

Ideally you don’t want one big waterfall merger, or one big waterfall integration project. Really, you want to be delivering quick wins early on in the program; you want to be able to carry out a merger through smaller incremental changes, bringing benefits earlier in the program.

Having a layered architecture and being able to expose through open APIs enables you to do things like offer multi-play products to your existing base before needing to do a full integration. The separation in layers and APIs mean that such services and products are running independently

We’ve done some Catalyst projects to show how the TM Forum Open APIs can do this in a very, very industry standard and open way. We’re looking to expose these standard Open APIs through all of our markets so that we can build integration very quickly. This way, an M&A isn’t one big monolithic project, it becomes a project where you can ask: “What’s the minimum step for me to be able cross-sell products and have integrated product bundles.” Eventually, you would do the full integration and decommissioning of your legacy estate; this becomes an approach which is much more incremental and agile.

JOB:  Would that mean the lead time to be able to do something productive like sell a particular service for a new small company that you’ve acquired will have massively reduced?

We’ve done acquisitions that from getting the support to actually building the integration – within a one year to nine-month timeframe – we’ve been selling quad-play services including services that we’re getting through standard APIs from the acquired entity. To put it in perspective, normally, a full merger would take years in multiple different countries.

JOB: M&A has historically been plagued with all sorts of technological and cultural issues. Is something like letting them retain their own identity for a period of time also a derisking factor?

LT: That’s right, and often you find that just from a business perspective, the acquiring organization wants to maintain the brand and identity of the acquired entity. But, at the same time, Vodafone would also want to be able to package and resell those through all of the channels that we have.

So, it’s all about driving the most value out and having quick wins as early as possible.

We believe TM Forum’s industry standard Open APIs really help. With them, you’ve already got standards set, even in a company that you’ve only just acquired. This includes standard definitions for things like: what a customer facing service is, product definitions, a catalog of services available etc. We believe having these as open industry standards, data models and definitions drives that flexibility and agility so much more.

JOB: Do you consciously use the models of the B2B partnering like the sell through and sell to? An awful lot of the open ecosystem and Open APIs were built around these concepts.

LT: For us, these models are very valuable, particularly in our work in TM Forum’s Catalyst Program. The ability to prove some of these ideas in real scenarios, almost like a dry run, proof of concept, in advance of them going and implementing it for real in our operations. We’ve had several different catalysts and working on new ones for this year for Nice, which are about inter-operator, sometimes even between competitors. These are about how to create model bundle services, using the Open APIs.

One of the Catalysts we are doing this year is much more around 5G services modelling, 5G service augmented reality edge computing, how do you model those and then expose them between operators using the Open APIs? This is a Catalyst called Blade Runner and is just one of the examples, and we’re doing this in advance of, how we can see when we look forward to 5G, our need to be able to do very similar things between Vodafone, our partner markets and even our competitors.

JOB: Is there a specific recent M&A that you could point to that has gone well using these concepts?

LT:  Yes, several of our European markets have done acquisitions fairly recently, like Kabel Deutschland in Germany, ONO in Spain, Cable & Wireless in the UK. In all those markets, we’ve done some sort of layering and selling of services before doing a full integration.

JOB: Is the layering following a layering model similar to the Open Digital Architecture (ODA) that we’re familiar with, or is it something else entirely?

LT: The layering in Vodafone is something we published a while back and which I presented at TM Forum. This was the Vodafone Ocean Architecture, and effectively we’ve contributed this as part of the ODA, because I know that our competitors had a very similar view. The Vodafone Ocean Architecture is based on layering, effectively the SID information model, products, end-to-end services, and resource facing services.

We contributed that as part of the ODA because we believe that this is the more appropriate way forward, particularly when you look at virtualized services; instead of having BSS and OSS [business and operational support systems], you have this three-layered model. I’m fully supportive of this being an industry standard to replace BSS and OSS terminology.

JOB: You seem to have a pattern you go through in terms of the stage of the technology side of M&A, steps which can help sell the components and capabilities of the new company more quickly and efficiently.

LT: It does depend on the business strategy and the commercial approach they want to take, and this is why it’s important for IT team and the IT architecture to have the most flexibility and most agility to do what our business wants us to do.

I’d say a typical pattern would be, an acquired entity would have its own customer base, and this would normally be a very complex and big task to do a customer migration, and clearly that’s a very big customer impacting and brand impacting move. I want to get an early win of actually being able to resell some of their technology services as an early step, like for example, if we’ve acquire a fixed-line or TV operator, being able to sell those fixed-line or TV services to the Vodafone base as an early step, that’ll be an example of a pattern.

The whole purpose of the open modular architecture, and Open APIs is about having maximum flexibility so that their new business can be made commercial and you can execute them in a short of a time period as possible.

JOB: Is there anything else you’d like to mention that you feel would be of value to our audience?

LT: To me this is one more driver of having these Open APIs between the different platforms in a layered model. For Vodafone, it’s been a critical part of our strategy the last couple of year to drive this open standard and Open API approach, and to me the M&A is just one more reason for doing it, one more business benefit to doing it.

JOB: Quite a strategic one, and one that a lot of businesses will understand very simply. Thank you Lester for your insights and time.



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    About The Author

    VP, APIs & Ecosystems

    Joann’s career spans over 20 years in technology, ranging from consumer electronics, telecommunications mobile switching to OSS/BSS and more recently to industry collaboration. Joann is currently the program lead for TM Forum’s Open API & Ecosystems initiative, chair of the API Steering Committee and lead for the Open Hack program. Joann has significant experience leading complex large scale transformation programs for a number of organizations.

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