This document summarizes a presentation on gaining a competitive edge in telecom managed services. It discusses how network operators and vendors are struggling against commoditization and needing to provide more managed services. It then outlines the benefits of managed services to operators in filling knowledge gaps and increasing efficiency. It examines some of the leading managed services providers and their capabilities. The presentation emphasizes that differentiation in managed services comes from solving different types of problems for clients and having a range of capabilities. It discusses challenges around asset visibility and optimization, and how extending product lifecycles and sustainability practices can provide opportunities.
1. Gaining the Competitive Edge in Telecom Managed Services Jason Marcheck |Director of Custom Research | Current Analysis Ed Mitchell | Chief Technology Officer | Trade Wings May 18, 2010
4. Impact on Carriers and Vendors Network Operators Struggling against becoming the “dumb pipe” Networks filling up Revenue per bit falling Relying on professional & managed services like never before Vendors Struggling against supplying commodity boxes Needing to diversify revenue sources Racing to provide managed & professional services like never before
6. The Rise of Vendor Services Always Been There…to an extent Deployment Technical support Increased complexity necessitates more skills; more services Technology migrations M&A/asset management More services makes outsourcing convenient and/or efficient
7. Benefits to Operators Fills Knowledge Gaps Business Issues Technology Issues Increased Efficiency OpEx reduction at every turn
10. Capabilities vs. Gaps Vendors building skills “in-flight” “Co-opetition” with IT integrators Known unknown conundrum Even 800 lb gorillas can’t move mountains
12. What Differentiates? Traditional measures: Number of people in places Number of distributed NOCs True enough, but… yawn! Recent concepts Packaged offerings Sustainability Optimization Transformation
14. What Current Analysis Thinks Contracts Size Scope Range of capabilities Packaged offerings Partner ecosystem
15. What Current Analysis Sees Optimization Transformation Network Equipment Performance & Provisioning Supply Chain & Inventory Services (QoE) Provisioning & Activation QoS SLA enforcement Business Process Front Office Back Office Network Equipment Migrations Integrations Services Software/Middleware Business Process Use of Analytics
16. The Managed Services Dilemma “Now that you’re responsible for servicing another company’s equipment, how are you going to maximize the value – and use – of assets to your clients’ satisfaction and at the lowest cost to you?”
17. Visibility into Asset Classes Client Spares Pools Open Market WEEE flows Deinstall Repair Centers Carriers VARs OEMs
21. The Typical Product Lifecycle Procurement Vendor/ProductSelection Deployment EvaluateProducts LittleReuse Some Resale Majority Scrapped Service Provisioning Disposal Monitoring Decommissioning Maintenance & Repair
22. Extended Product Lifecycles Procurement Vendor/ProductSelection Deployment Save to Spares Redeploy EvaluateProducts SecondaryMarket Service Provisioning Reuse Recycle IncrementalDecommissioning Monitoring Maintenance & Repair
23. Sustainability & Ecology Management Desire to be environmentally-conscious is pushing business relationships in a new direction. There’s significant value in helping clients be ‘greener’ Few environmental positives associated with millions of assets sitting idly in a large warehouse consuming energy, shipped without a plan from one location to the next, melted down or worse. For those in a position to make the highest and best use of their network equipment, environmental stewardship represents an opportunity – at little upfront cost – to: Improve cash flow Market share Streamline regulatory compliance
24. Sustainability & Ecology Management Transportation Events Use visibility into asset inventories to dictate movement of assets from one location to the next based on fuel consumption and carbon emissions. Waste Streams Identify excess stocks and then resell them on the secondary market to reduce the flow of material to recyclers. Warehousing Knowing where surplus assets can be used contributes to a measurable savings in storage and other physical plant costs. Regulatory Compliance Mandates governing the disposal of equipment are on the rise, visibility can prove to be a mitigating factor in the level of ‘cradle-to-grave’ accountability required to assure compliance.
25. Thank You Jason Marcheck Director of Custom Research | Current Analysis jmarcheck@currentanalysis.com Ed Mitchell Chief Technology Officer | Trade Wings emitchell@tradewings.com
Hinweis der Redaktion
Warily optimistic – macro economy is getting better, but challenges abound
Slide looks negative, but instead depicts that both carriers and vendors are in a challenging place right now 2009 2008Ericsson 27% 23%ALU 23% 19.6%NSN 45%OTT phenomenon a primary driver for this
Whereas network operators could afford to maintain their own networks, it is increasingly less attractive to bear the cost of honing and then retaining the myriad of capabilities required to maintain networksMigrations – can mean so much it’s a webinar series in itselfM&A – consolidation places a lot of pressure on operators to merge and manage their assets
Talked a little about it already, but basically these businesses have become too complex to run by themselves in many cases. Far from an indictment of management of these companies, it is a statement about the number of issues they deal with.Emerging market – often don’t have the skill set and/or experience at their disposalMature market – dynamics of running a network and providing services has changed a lot in a relatively short timBusiness issues – how to monetize assets, deal with over the tops, manage churn, manage their assets in situations where most operators now consist of a series of acquired networksTechnology Issues – the oft-discussed need to take advantage of IP, when there are many ways to skin the catAll while… needing to cut OpEx out of every variable in the equation
Ericsson: benefits from is heritage as WI hegemon; admittedly not nearly as strong in fixed line dealsALU: major initiative for Lucent pre-merger; continued momentum post-merger, and exhibits strength across all parts of the fixed and mobile network; carrier and large enterpriseNSN: Its recent success with services as well known as its struggles with equipment
More salient challenges from the vendor perspective is in this slide. As vendors seek to assert themselves at more points in the value chain, they need to build skills that they don’t have – leads in to the co-opetition concept. While direct competition between an ALU and IBM is limited, ALU – and its peers – would definitely like to capture more of that software and integration type revenue, especially in the areas of OSS/BSS and SDP.Then there’s the known unknown problem they know challenges are going to arise – things like addressing the Cloud – that are going to crop up that they aren’t ready to handle right now… have to craft stories and solutions – and then try to move their customers in the direction even while they don’t have a complete idea of what needs to be done – and even where they might have clear ideas in mind, it is often difficult to get carriers to move
Goal is to position managed and professional services as a tool for growth and competition. Sure.. But how does a vendor do this?Sustainability – ALU and NSN both have branded Green services initiativesPackaged offerings – Highlighting specific capabilities Moto’s Optimization Services HP’s transformation services
Purposely vague, because while there is a relatively simple answer - the number of permutations are perhaps limitless.
So, when we’re stacking vendor offerings against each other, what do we look for
Specific examples of problem solvingAnimation for Supply Chain Mgmt.Optimization – perf and provisioning includes stuff like BTS load balancing, optical parameters, etc.
Different asset classes managed by disparate systems. Procurement uses ERP to manage purchasesOSS applications manage active network deployment – but not necessarily spares. Decommissioned assets simply get deleted from OSS with no effort to recover value or repurpose.Finance has little or no visibility into OSS/deployment of assets – result is most reordering must be expeditedManaged services engagement suffer from to these systemic barriersLack of visibility across operational silosMissed opportunities to reuse/repurpose assetsUndervaluation of surplus equipment
To be success with managed servers, one must overcomeDecentralized dataDifficult to compileIsolated decision making
Given our experience implementing Reuse Optimization strategies with OEMs and carriers, we’ve learned that visibility to assets (active, spare, and excess/overstocks, and in the secondary market) is absolutely essential. There’s no opportunity to repurpose equipment without knowing where it is and what condition it is in. For the sake of time, I’m not going to get into each of these points – you can read them for yourselves.Visibility is critical to efficiently managing all assets and gaining transparency to all of the disparate equipment that you, as the multi-vendor services provider, have SLA responsibility for servicing.
Direct attention to the bottom of the circle
The effect is that this approach reduces what goes into the waste stream. This can be a key differentiator as a multi-vendor services provider. Whereas most MV service providers tout their size and years in the business, this approach positions you as an innovator – responsive to client and consumer attitudes toward “green” initiatives.
This slide illustrates how “green” thinking manifests itself in terms of logistics, energy consumption, and government mandates. This is a practice that is sustainable as well as profitable. It’s just good business, both economically and ecologically.
