In this TM Forum interview, Angus Ward, CEO, Beyond Now, looks at how telcos can drive growth by adopting digital platforms, orchestrating ecosystems and developing B2B2X models.
Beyond Now is a fast-growing ecosystem orchestration and digital business platform provider. We power organizations to launch new services fast and help them grow revenue by utilizing our digital platform and our SaaS BSS.
What does that mean exactly? Well, in essence we provide an additional layer which enables CSPs to provide the solutions that their customers want to buy. This will be super important in 5G and edge because then it’s all about solutioning. The other thing which is key is that this layer is hyper-automated and completely frictionless so you’re working with partners, for example 10, 20, 30, 40, 50 partners, to co-create solutions – it’s super efficient. Using standard APIs makes it far simpler than a standard systems integration and provides a far higher margin than a simple app store.
Beyond Now was one of the first to identify the need for Telcos to adopt digital platforms, to orchestrate ecosystems and to develop B2B2X models. Can you share more about your vision, and why you think it is key to CSPs’ growth?
Back in 2014 we began to re-orient our business away from the classic mass consumer BSS towards marketplaces, platforms and ecosystem orchestration, particularly for the enterprise and SMB markets. We saw a huge opportunity for CSPs around these new platform-based business models. We collaborated with Geoff Parker, a leading luminary in the MIT initiative for the digital economy, who wrote ‘Platform Revolution’. What we saw is that with 5G and the new campus networks, and an explosion in new technologies, there was an opportunity for CSPs to reverse the decline of traditional connectivity revenue and move it toward solutions.
Enterprise and SMB customers really want to solve simple problems within their business, whether that is reducing rework, cutting inventories or reducing the cost of manufacture. CSPs have a stark choice. Do they provide a solution to these business problems that help the customer solve those problems like reduced inventories? Or do they just want to provide the connectivity piece?
If they want to provide a solution it means working with partners to find the perfect solution for that problem. If they want to sell just connectivity, it’s about finding an alternative solution provider and selling connectivity based on price. We think that CSPs will do a combination of the two – probably pick one or two priority sectors but also work on wholesale and selling connectivity as well as a horizonal solution.
Actually, the data here suggests there is a lot of confusion within the CSP community. All too often ecosystems are talked about without really understanding what it takes and what it means.
As an example, over 47% of enterprises would increase their spend with CSPs if they met their needs. In 2020, we collaborated with Omdia in a 5G market survey and found that 21% of 5G solutions were being led by CSPs, 7% by alternative solution providers, and 32% by enterprises undertaking DIY.
What we would have expected to see over time is that that 21% increase in CSPs would play a larger role. But if you look at the 2021 data, what we’re seeing is that actually the CSP-led proportion of the market has shrunk by 5% – it’s gone down from 21-16%. Conversely, the alternative solution providers have gone from 7 to 20% – jumped by 20% overall. And as we’d expect, enterprises undertaking DIY has declined quite considerably by 12%.
So, what we’re seeing is that CSPs are playing less of a role in leading 5G solutions than we would have expected. Why is this? 39% point to problems with innovation and solution relevancy as to where the CSPs are struggling. I think the reason for this is partly because there’s a lot of focus on bundling and here we’re talking about solutioning. It’s around starting with a customer, starting with a problem industry vertical and really creating the ecosystem of partners to perfectly solve a problem for the customer.
That means a more fundamental organizational change – less stove piped, less centralized, and also means changes to IT – working with an ecosystem of partners to co-create solutions, and working in a more iterative and agile way to rapidly put something in front of the customer, testing ideas and bringing the customer far closer into the solution development to really understand the problem they’re trying to solve. Current IT is not automated enough, doesn’t allow partners, is not open enough and really doesn’t focus on orchestrating and monetizing an ecosystem. That’s the old, linear business model, and here we’re talking about a platform, multi-sided business model, and orchestrating an ecosystem of partners.
To help answer that question I would really separate into four different types of ecosystem models. The first one is marketplaces – creating a solution and selling with partners. The second is expanding market reach and adding channel partners at the front end. The third is economies of scale and really achieving global reach – where you have one platform across multiple geographies. And the fourth type of ecosystem model is joint offerings with customers – the classic B2B2X.
So, who is doing it right?
I think Telus is definitely one of those CSPs getting it right across all their multiple, major lines of business, particularly marketplaces and selling with partners. Telia Division X is another with six different geographies and a single global platform solving them. With a more iterative and agile delivery model to drive innovation, they are doing it right on marketplaces, and definitely achieving economies of scale across the geographies and global reach, but also working with customers in a B2B2X way to create those solutions for those customers. Finally, Altibox in the Nordics is a great example of that channel partner model. They have 38 partners who they sell through, and they really get efficiency in terms of driving sales with 38 channel partners, all of whom form part of their ecosystem.
As I explained, we recognized the importance of platforms, marketplaces and ecosystem orchestration 6-7 years ago and I like to think we’ve driven a lot of the thought leadership on this topic. In addition, we continue to provide co-leadership to some of the important initiatives within TM Forum such as co-leadership of Open APIs.
For the 2021 TM Forum Digital Transformation World Series, we are involved in the Digital Business Marketplace Phase 4 catalyst together with a huge array of Tier 1 CSPs and partners, looking to solve Industry 4.0 and smart solution problems. This catalyst really continues to blaze a trail in terms of taking the thinking one step further forward.
Likewise, our Autonomous Networks catalyst is now in its second phase. Following Covid, this catalyst reimagines new disruptive services that will be completely autonomous, designed for zero fault operations with auto scaling based on customer expectations. It will examine autonomous networks that can enable this new normal, designing and prototyping new value generating services for cities, entertainment and industry.