Friday, November 21, 2008

The Personal Web

A popular PC brand's tagline is, The Computer is Personal, Again... well, they could not have got it more wrong. Over the last few years, consumer behavior (demand) has shifted away from 'computing' to 'communication', 'collaboration' and 'entertainment'. The computer is, in fact, a relatively inferior device for most of the needs of today's generation. Its lack of portability / mobility and high power consumption make it a rather 'impersonal' device. 

Today, there is a surge in the device world - smartphones, mp3 players, LCD & plasma TVs, cameras are emerging as complements and in some cases, alternatives to PCs. While computer sales at about 200 million per annum are still amongst the highest in (hi-end) digital devices, more than 400mn other digital devices capable of entertainment, communication, content, etc. are being sold out there. Most of the consumers own more than one device,  often used inter-changably for some services. Take for instance, photography or video recording. Most mobile phones can perform the imaging functions reasonably well (for the lay person); yet people still do own digital cameras and camcorders. Similarly, e-mail and gaming are available on many devices including computers, mobile phones, smartphones and gaming consoles. Additionally, many of these devices are getting networked (or at least network ready). WiFi is now available on all laptops, most PCs, smartphones and gaming consoles, some cameras, music systems, mp3 players and special devices.   

In such a world, where the customer could choose from hundreds of devices and have Internet access from many of them, the Web emerges as the platform of choice for most services. To be successful in this world, a service should have at least the following characteristics:

Identity: The service recognizes who you are and customizes the content / offering based on your choices or previous patterns. Your identity enables you to access multiple services and carry your content / preferences across all of them.

Context Sensitive: The service recognizes what device and / or access mechanism you are using, and adapts itself accordingly; yet, it preserves the core features based on your Identity.

Storage: For the Identity to be preserved across contexts, your content, preferences and history need to be stored or hosted centrally.

Of course, Google is the leader and champion in this world, having transformed our online experience. With a Google identity, you can access all your e-mails, contacts, photos, videos, chats, documents, news headlines, stocks, blogs, maps... well, pretty much your life, perhaps, from any device, any location.  With the latest additions of the Chrome browser and Android mobile paltform, Google is reinforcing our ability to have this seamless experience, irrespective of access mechanism. While Google is the most successful in leveraging the "Personal Web", others like Facebook, Skype and LinkedIn have also made significant progress in recent times.

The Personal Web experience is not limited only to consumer services; businesses can also now create truly office-less work environments. Enterprises can roll-out hosted applications, including ERP, CRM, Salesforce, collaboration and even, voice, on private IP networks and/or the public Internet, in a highly secure and cost-effective manner. In fact, the success of Google in the small and medium business space reflects the opportunities for greater efficiency and cost savings that large enterprises are probably missing out on. 

I had said in an earlier post that Service Providers (as against Device Providers or Network Operators) would be the winners in the mobile world. The same holds true for the entire Communications industry. Networks are almost a commodity and hold no opportunity for differentiation and consequently, pure network operators have limited opportunity for a value upside. Devices are usually a one time purchase (till the next upgrade or replacement, at least) and therefore, device manufacturers have little scope for an ongoing customer engagement. Services, on the other hand, can leverage the capabilities of networks and devices to create a compelling and ongoing experience; thus, service providers have the best shot at long term value creation.

Customers, individuals and businesses, are of course, the ultimate winners. They can choose the best of all worlds from amongst networks, devices and services - mix and match them to suit their requirements. 

The Web is Personal, Finally... 

Monday, November 17, 2008

Global Influence

Recently, Global Telecom Business, a leading telecom journal, published a list of the Top 100 influential people in the telecoms industry. It was widely reported in India that seven Indians had made it to the list, although if one were to be pedantic, only four were directly connected to the telecom business in India. It is a matter of pride to me that two of the executives in the list belong to Tata Communications, Srinath at No. 8 and Vinod at No. 68. 

I read comments on some Indian blogs that it was surprising that the names of a few other large Indian telecom operators were missing from the list. Well, it was not so surprising to me, partly because the article begins with the caution that the list was biased towards US and European executives because of the nature of the survey. 

More importantly, the list was about people who were significantly influencing the global telecoms industry. While size of operations is indeed a factor that drives influence, it is not the most important one. Influence has to reflect in changes brought about to the market, in terms of customer behavior, business model, economics or competitive positioning. Those that influence have a clear idea of what the future of the industry will look like (not just that of their company) because they will drive that future.

Rightly so, this list is led by the Google trio, and followed closely by Steve Jobs. All of them, in their own way, have shaken up the telecom industry. It is interesting to note that that the Top 2 influencers of the telecoms industry do not belong to it, well, not by traditional definitions at least. This reflects the 'influence' that Service Providers (or platforms) will have on future customer behavior and industry dynamics (see earlier post on the topic here).

The influence of China (its scale and its policies) on the world is reflected by Li Yizhong, the Chinese telecom Minister, at No. 3.

Finally, Srinath at No.8 shows how rapidly one can change the world order... less than 7 years ago, his company was a public sector monopoly in India; today it is recognized as a global challenger with the strides it has made in the international voice and connectivity business, both wholesale and enterprise. With its focus on new technologies (Ethernet, MPLS, Wimax), managed services (Telepresence, security, hosting) and emerging markets footprint (India, China, South Africa, Asia, Middle East), it is poised to play a leading role in the global wholesale and enterprise markets.  

I look forward to greater innovation and game-changing moves by these influencers.

(I would normally avoid writing about my employer or my colleagues, but I felt that I had to make a mention of this topic since it is really about industry dynamics and influence.)

Friday, November 14, 2008

Succeeding in the New World

It is well accepted today that many of the global economies are facing a slowdown. The combined effect of the mortgage crisis, energy prices and consequent meltdown of Wall Street has taken its toll on even the resilient economies of China and India. The financial services industry is worst hit; other sectors including IT, auto and retail are also on the downturn.

To beat a recession, companies must manage through it with minimal injury, usually through cost cutting. However, it is also a time to emerge stronger for the morning after, by growing into new markets, strengthening supply chains and developing innovative business models. Whatever be the strategic objective, communications technologies and services can play a critical role in helping corporations navigate through the uncertain times as well as prepare them for tomorrow.

Conserve: Traditionally, businesses have focused on cost reduction during a recession, usually, by going after G&A and marketing costs. Global expansion and collaboration do add new administrative and marketing costs and create a situation where businesses have to find new avenues of improving profitability. There is also a need to be increasingly conscious of the impact of business activities on the environment; conserving energy and carbon emissions, along with costs, is the primary mantra in current times. The emergence of hosted or managed services for communications services and applications enables businesses to expand their capabilities without many of the associated costs and overheads.

Enterprise applications including ERP, messaging, and security offered by service providers ensure that all stakeholders can have a seamless experience, irrespective of location and access mechanism. Managed services like messaging and security, not only reduce operating costs but also free up valuable capital resources. The managed services model creates greater focus on core, market-facing business strategies and processes by letting specialist service providers manage the non-core activities. Similarly, data center consolidation and outsourcing can provide major savings through scale of real-estate, power and management. Further, virtualization provides ‘multiplier’ savings in terms of capex utilization, flexibility, power efficiency, disaster recovery efficiency, etc.

There are also several customized “cloud” services to address the demands of specific industry verticals. For instance, hosted contact centers enable mid-sized BPOs to scale their operations with limited up-front capex and pay as they expand their business. Services like public Telepresence rooms, in addition to their power of collaboration, provide considerable savings in cost, eliminating travel and other associated expenses as well as providing other intangible savings in carbon emissions and employee productivity.

Collaborate: Developing countries, growing at over 8.6% p.a. over the next five years, provide significant new market opportunities for large corporations that face demand saturation in the developed countries. This rapid growth in addition to the fact that 80% of global population will be in the emerging economies, makes these markets a must-enter for most multi-nationals. Global expansion will result in globally distributed teams based on the availability of best resources to run global businesses. Supply chains, downstream and upstream, tend to be spread across countries but need to work seamlessly as an integrated, virtual unit. Managing people across locations and building a shared organization culture is the biggest challenge for companies in this new world. Moreover, it is critical that companies create real-time collaboration mechanisms across the extended organization for the creation of new products / services and taking them to market ahead of competition. 

Global Virtual Private Networks (VPN) using MPLS and Global Ethernet solutions enable the creation of secure, multi-location wide area networks with high levels of scalability and flexibility. Bringing new offices online or increasing bandwidth between them or implementing a new application globally has become almost as simple as installation of a plug and play device.

Additionally, businesses can choose from a variety of platforms, including high definition video conferencing (Telepresence), next-generation content delivery networks and converged services, to engage more effectively and in real-time with their stakeholders. It could be a BPO that wants its engagement managers to brief their clients in North America and Europe using Telepresence, face to face every week instead of waiting for the monthly on-site reviews; it could be a fashion products company that uses a content delivery network to provide web-based, video training to its sales teams and agents across Asia the day prior to launch of its next best-seller. It could also be any company whose leadership and management teams use unified communications systems to engage and work as a single team, across multiple priorities, geographies and time-zones.

Innovate: It took the “telephone” nearly hundred years to become a globally adopted and mainstream product. Today, new services and products are launched in days and reach the peak of their life-cycle in just months. The rapid shortening of the consumer adoption cycles creates new opportunities and challenges. The willingness of customers to try and accept new products (and providers) enables companies to enter new markets and challenge incumbents. On the flip side, companies now have very short time-windows to launch services and recoup their investments, before an alternate product comes along or consumer preferences change. Simultaneously, the saturation of traditional markets is forcing businesses to identify new segments that were hitherto untapped or were not suitably targeted. This also requires the identification and adoption of new and/or more appropriate channels that can create the time, cost and focus advantage of reaching a market. The Internet has been at the heart of most innovations in recent years; it continues to be so, particularly with the re-invention of the www as Web2.0.

High bandwidth backbone and access networks and huge cost effective storage are providing the impetus for digitization and online distribution of most forms of content and information. Education – knowledge management and training, in the corporate context – can now be disseminated in a highly interactive and customized manner, across multiple locations using IP-based training and conferencing solutions. Content providers can reach their customers much faster; for instance, an online gaming company with an appropriate CDN solution can deliver new games 4X to 10X times faster than without.

Voice and basic data communication enabled the first wave of outsourcing – contact centers and transaction processing; with advanced video communications facilities, BPOs can create now seek to outsource activities that require intense, face to face interaction and collaborative knowledge sharing. Wireless and mobile technologies have also helped expand the reach of services to markets that were earlier out of bounds. Banks, particularly in emerging markets, can now use mobile ATMs with wireless connectivity to open up whole new, untapped rural markets for financial services.

Businesses have a variety of choices, both in terms of services and service providers. A communications service provider can be more than just a vendor. In the context of the shift to managed and hosted services, the communications provider should be one that has domain expertise and can provide customized business solutions rather than just network connectivity or infrastructure. In these times of uncertainty, it is also important for IT managers to partner with service providers that are financially robust. There are only a handful of communications service providers that have a truly global presence in voice, data, IP and managed services. Given that telecom is still a reasonably regulated industry in most countries and that scale, infrastructure ownership and domestic presence have a crucial impact on service delivery capabilities, IT managers will need to make the trade-off between global coverage and in-depth, local presence in key markets / destinations. 

The world has seen more changes in this decade than it has ever seen in the past. The next few years will probably accelerate this change, in political, economic and social spheres. Collaboration and innovation are the heartbeats that will drive this new networked world. It is a world where the strategic adoption of communications and services will play a decisive role in differentiating winners from the also-rans.

This has appeared as an article or an interview in various publications: 
Asian Channels (doc version)