Thursday, December 09, 2010

It’s the Data that Matters the Most

On Tuesday, we hosted Debbie Kish, a member of Gartner’s carrier network infrastructure research team for a strategy session, which included a tour of our warehouse here in Portsmouth. We added warehousing capabilities as a value-added service a number of years ago in response to clients seeking assistance with managing vast amounts of excess material. Walking between the floor-to-ceiling racks of equipment originating from so many different vendors and geographies, it was easy to demonstrate why asset intelligence has become so valuable. Our warehouse is pretty big – covering about 2 acres – but it’s dwarfed in comparison to those maintained by large regional and global telecom companies. In a managed services scenario, the responsibility for knowing where assets are located and their condition, for example, or critical attributes like part compatibility and aliases rests squarely on the shoulders of the OEM. As part of our discussion, we demo’d Re:source Lifecycle Management and talked at length about how asset intelligence can be used as a competitive differentiator in hotly-contested multi-vendor services deals. With price quickly becoming a commodity in these deals, separating the winners from the losers is boiling down to who can generate the most value for the client. Demonstrating that you possess the ability to maximize the revenue potential of multi-vendor material can put you one step ahead of the competition. 

Posted by Billy Balfour • Category: Multi-Vendor Services • Permalink

Thursday, November 18, 2010

A Glimpse into the Future?

As managed services deals become more commonplace and the factors that once separated vendors in competitive situations fade away, you can’t help but wonder how these agreements will evolve over time. We may just have gotten a glimpse of what the future holds this week. Speaking first to Reuters, and then today at a financial conference in Spain (click here for Bloomberg’s coverage), Ericsson’s Head of Managed Services, Valter D’Avino, suggested that one day the company could actually own the network – and sell capacity to carriers and operators.

It’s a pretty radical idea. Talk about creating client ‘stickiness.’ Judging by D’Avino’s comments, it’s clear that such an idea is seen as a progression of the core managed services value proposition. For carriers, network traffic isn’t going to ease anytime soon nor is the pressure to reduce costs and further streamline operations. So, if a carrier’s already outsourcing core network operations and service maintenance to a vendor like Ericsson why not take the logical next step? That’s the idea at least.

Whether or not this ever comes to fruition will ultimately depend on the carriers and operators. These are companies with a fair amount of their identity tied up in the networks consumers use and I have to think getting them to take that step won’t be easy or happen quickly. Right now, it seems like most are having a heck of a time playing the ‘my network is better than your network’ game. But then again, this industry can change lightning-fast.

Posted by Billy Balfour • Category: Multi-Vendor Services • Permalink

Thursday, November 04, 2010

If You Can’t Differentiate on Price…

It looks as though the Indian market is experiencing the same type of managed services shake-up that rocked Europe this time last year. You can read Light Reading’s take on inroads Huawei and ZTE are making at the expense of some European giants here. I have to say that news of ‘upstarts’ besting more established market players for these deals no longer phases me. What caught my eye in this story though, was a comment from an analyst at Ascentius Consulting: "A key difference between gear and managed services markets is that price difference is inconsequential. Managed services require a lot of sophistication and expertise, and the Chinese players are at a disadvantage."

Certainly the ability of Chinese companies to emerge from the bidding process victorious seems to counter any notion of being at a disadvantage but I digress. That’s not the part that interests me. It’s the idea that price and product have become commodities, and that differentiating one vendor from the next in the managed services arena boils down to the ultimate value gained by a carrier or operator.

We’ve talked before on this blog about the importance of the service and supply chain in building a successful managed services strategy. And if you think about it, so much of the value a client can derive from a managed services engagement (better CapEx ratios, faster time to market, capitalize on emerging market opportunities,etc.) has its roots in the efficient and cost-effective movement of surplus and decommissioned material. Of course, getting the most out this equipment requires having access to lifecycle data on products from OEMs large and small. But once you’re armed with that intelligence, it’s easy to become an expert on managing multi-vendor gear, and in turn, develop some pretty sophisticated frameworks capable of maximizing the revenue potential of those assets for your client.

Posted by Billy Balfour • Category: Multi-Vendor Services • Permalink

Friday, May 21, 2010

Making Sense of the Next Big Revenue Opportunity

Great discussion on Tuesday afternoon during our webinar on Telecom Managed Services. A big thanks to Jason Marcheck of Current Analysis for lending his time and expertise to the discussion. If you missed the session, we’ve just posted the recording here for on-demand viewing.

Back in early April, our CEO blogged about the enormous $200 billion managed services opportunity and there seems no end to the flow of news on this subject. Mobilicity, a new Canadian wireless carrier that launched last week in Toronto, has embraced managed services perhaps more than any other carrier at the moment, and Ericsson just announced a new multi-year deal with Telefonica in Brazil.

A modern day gold rush? Yeah, that’s a pretty fair analogy. If you think about it, what carrier/operator doesn’t want to reduce OpEx and drive top-line business growth? And what OEM isn’t looking for more client ‘stickiness’ and new rev streams in the face of declining wireline business?

Now, one doesn’t win these deals by simply showing up to the table. Success breeds success, and in the process differentiates one company from the next, which is why we put such an emphasis on gaining the competitive edge during Tuesday’s session.

Old measures of differentiation like size and scale still matter, but today carriers and operators are looking for service partners who can deliver the broad range of skills required to provision and manage networks under a variety of scenarios. OEMs that can leverage multi‐vendor asset intelligence and visibility into spares pools and excess inventories can quickly put themselves in position to deliver measurable benefits for their clients.

Here’s a quick example – sustainability. Consumer expectations and internal business requirements are driving companies to be greener, which means there’s a significant opportunity waiting for those who can help clients achieve their ecology management goals. Difficulty tracking the operating condition, location and value of network assets carries with it a pretty sizable environmental downside (e.g. transportation-related CO₂ emissions and storage-related energy consumption). Better visibility into assets leads to more environmentally friendly planning and provisioning decisions, and that ultimately leads to a clear market differentiator.

 For more on managed services, be sure to check out our new white paper.

Posted by Billy Balfour • Category: Multi-Vendor Services • Permalink

Friday, April 02, 2010

The $200 Billion Opportunity

Ericsson’s CEO Hans Vestberg was in the U.S. last week and spoke with a number of news outlets. If you didn’t see any of the coverage, definitely required reading if you want to begin to understand where the next significant opportunity lies for equipment manufacturers.

What were the key points? For starters, the market for Telecom services, those which help carriers deploy and maintain their network infrastructure, is a $200 billion market. And second, that two-thirds of the global market is still controlled by the carriers themselves.

This is a story – and opportunity – about growth. Through recent M&A and the rise of new players the competition in the OEM space is white hot, which means that traditional revenue streams may not be as abundant as they once were.

By grabbing a slice of the services pie, OEMs are bringing an important value-added service to the table and creating some much needed ‘stickiness’ with their clients. In a competitive marketplace, the more ingrained you are in your client’s business the harder it becomes for the client to think about conducting business with someone else.

Are other OEMs on to this opportunity? You bet. In their 2009 annual report, for example, Huawei notes that they had been awarded more than 100 managed services contracts by year’s end.

So, the cat’s out of the bag when it comes to the opportunity surrounding multi-vendor service agreements. Biggest question I have for OEMs is ‘now that you’re responsible for servicing other company’s gear, how are you going to maximize the value – and use – of those assets to your client’s satisfaction?’
 

Posted by Todd Adelman • Category: Multi-Vendor Services • Permalink