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Building a successful service ecosystem

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Aggregation, Inter-dependence, Openness, Intelligent pipe

Today, the digital society is at a new starting point. Digitalization has changed key features of new-generation business ecosystems and blurred the boundaries of closely-connected industries. Various win–win collaborations have led to mutual value growth of various players in the digital ecosystem.

As suggested by Martin Creaner, ex-president of TM Forum, the new open digital economy will be a diamond-shaped industry representing a significant shift from vertical integration to horizontal integration. Three main levels of diamond from the bottom to the top represents communications & cloud infrastructure provider, service provider, and service retailer:  implying that, only few companies will provide the necessary communication and cloud infrastructure, most of the companies will be involved with service creation and provision, and some of companies will have their business oriented towards retailing of these digital services.

Figure 1: A diamond shaped industry & Huawei Key pivot points

Figure 1: A diamond shaped industry & Huawei Key pivot points

It is found that carriers have started transformation from being communication service provider (CSP) to digital service provider (DSP), changing their operation contents and modes. To help carriers accelerate business transformation, Huawei finds key pivot points for accelerating business transformation for carriers: Aggregation of partnership, Interdependence of digital and physical products and services, Openness in platforms, and intelligent pipe in a cloud infrastructure provider environment; acronym as A.I.O.I

Aggregation: Carriers aggregate a large number of partners to offer diverse services and contents for users, building an inter-dependent ecosystem. To enlarge the ecosystem, carriers can include vertical markets such as gaming, music, video, eHealth, social networking, automotive and many others. Huawei supports carriers in expanding the ecosystem related with various digital services pertaining to various markets as below by offering agile operation modes and services to monetize customer assets and build new value chains.

  • Video: Aggregate TV App/OTT content to enhance user experience on multi- terminals including TV, iPad, mobile etc. , and to provide easy navigation experience by switching videos from one terminal to another  such from TV screen to mobile phone, tablet, PC and so on , realizing video everywhere.
  • Enterprise: Based on the key enterprise requirements — communication, aggregate cloud-based contact centers, voice and video conferencing, O.A. (Office Automation), unified communication services — Huawei helps carrier to expand enterprise business and make their customers work efficient and simpler.
  • M2M: As it is expected most of appliances, devices etc. will be inter-connected in the digital world.  Huawei provides unified platform which can integrate various M2M devices (home gateway,RFID, vehicle terminal, temperature sensor,etc. ) to help in generating lot of innovative M2M services (mobile tracking, internet of vehicle).
  • Music: Aggregating digital music content and developing applications to get more revenues from traditional RBT users by providing one stop solution and enriching music experience (RBT, ring tone, download, streaming combination). Huawei digital music solution can provide consistent music experience and seamless integration with existing RBT platform, establishing unique strength over other vendors.
  • Game: Mobile Game has been contributing more than 75% revenue of total mobile Apps and has become a several billion USD business.  Huawei helps carriers not only to aggregate global rich innovative mobile game services but also to provide local game services with enhanced features such as convenient bill payment, open ID authentication, thus promoting them to the right users.

Hosting can be one of the best ways to build the digital ecosystem , enlarging the business w.r.t. digital economy at lower cost. Huawei already has 7 hosting centers all over the world that have aggregated most of the key industries players.  It can help carriers to bring vast digital services related to video, M2M, music, game, etc. in very short time.

Inter-dependence: It’s an interdependence relationship among the players in the digital ecosystem. External partners, developers or service providers, become investors in the ecosystem.  An ecosystem allows spreading the costs and risks of development to partners, who can subsidize the expansion of the carriers’ business.  This allows the value of the ecosystem to grow far beyond what a carrier or partners could create on its own.

Huawei Digital SDP  568 x 71

Openness: As carriers have a set of unique assets and advantages with strong customer base, they have the opportunity to build, manage and monetize a fully functioning digital services ecosystem by opening the unique digital assets that include various categories of capabilities such as network, payment, user profile, data management, cloud, IT etc. With growing opportunities, Huawei Digital SDP supports revenue supporting new business Models (B2B2C, B2B, B2C etc.) for a complete product or service transactions. It helps carriers to engage in new partnerships that allow them to reach new markets and customers by partnering with consumer-oriented product and service businesses. In the digital ecosystem, partners create services and carriers support them with value- added features that enable efficient deployment, execution, orchestration and management rich set of services

Intelligent pipe: Carriers need a more intelligent pipe that can provide more insights to help carriers to provide their subscribers with proper contents & bandwidth in an efficient & precise manner, making for an optimal user experience while retaining profit for the carrier. Huawei helps carriers to manage intelligently traffic through tiered pricing & service experiences, enhancing profitability while maximizing return on investment (ROI). By focusing on offering the right services of the emerging digital economy to the rights users, carriers have an opportunity to make a strong, innovative, and creative strategy to play significant role in the exponentially growing market.

Some best practices

Various global carriers with Huawei are making great efforts in digital business transformation.

In China, one of the carriers established nine service bases to enter vertical fields, such as music, game, Internet, and online reading. These bases allow the carrier to achieve cross-industry integration, develop new value chains, and perform service innovation. Huawei worked together with the carriers to establish service bases, and provide consulting services and, solutions.

In Southeast Asia, one carrier aims to provide digital life services. In 2013, the carrier increased its total income by 57%, attracted 287 + new partners, and released 4080+ new services, and doubled its income within four months by achieving 125% of its annual KPI. The carrier plans to develop an open ecosystem to achieve USD billions of income in the field of digital services.

The digital economy era brings us great opportunities and challenges. Now we have a chance to utilize digital services and achieve great leaps in business development. We must revamp our mindsets and show the necessary audacity to write new and hopefully successful chapters of this digital era.

 



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About The Author

Mr Xiaolong Song has over 18 years experience in the Telecom, IT and Internet industry, with broad executive experience in the area of R&D, Marketing and Sales. He is an expert in SDP/RCS/IPTV/VGS, Hosting & Co-operation, Integration Cooperation, CDN&CACHE. His focus is business opportunity development and long-term strategy establishment with Telecom operators.

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