Words Matter but Will Communication Service Providers (CSPs)?
Along with seeing UCStrategies colleagues in person, the recent GENBAND/SONUS Perspectives 17 event in Los Angeles provided a rare chance to take the communications sector’s collective temperature. In addition to insightful demos and sessions, the opportunity to spend quality time with executives from the hosts, their partners and leading customers is unfortunately becoming less frequent as every aspect of our industry goes through roiling changes whose pace inexorably quickens.
Indeed, in terms of the temperature, it is rising.
While such events are valuable for evaluating where individual companies and their ecosystems stand on technologies like UCaaS, CPasS, the Cloud, Big Data, IoT, mobility, applications-based services, etc., (read my friend Jon Arnold’s excellent review), they also get the juices flowing on larger issues. In my case, this involved two challenges that flowed from discussions with a broad cross-section of the communications landscape.
- How we can better describe the times in which we live
- The future place and even relevancy of the communication service providers (CSPs)
Time for a language change
For several years, the way in which we discuss interactive communications has become stagnant, cliché, and I would argue, non-descriptive. Chief culprits are terms like B2B, B2C, C2B and C2C. Even the term Internet of Things (IoT to most but Internet of Everything to Cisco), seem out of date. Realities are with the advent artificial intelligence and the employment of chat and other electronic “agents,” much if not most of our online realities, aka experiences, have become virtual.
Because of this virtualization of “E”verything, I throw out the following. For your consideration is what I believe is a better way to describe real-time and time-shifted interactions. IT is based on a descriptive construct employing the terms:
- Virtual-to-Virtual communications (V2V)
- Virtual-to-ME (V2ME)
- ME-to-Virtual (ME2V)
- ME-to-ME (M2M)? The “ME” part is just as critical to this construct as “virtual.”
Pardon the self-congratulations. I have been writing and speaking for over a decade about how in looking at the future of sustainable value-added communications, whomever controlled/hosted the intersection of the physical and virtual worlds, and provided customizable security/trust and authenticated content and context mediation would win.
Where the “ME” comes in is that it is broadly defined to encompass ME the individual, group member, enterprise and ecosystem and/or value chain member. As I will explain below, how CSPs can remain relevant and even dominant rests squarely on leveraging their unique positions into being trusted hosts—the gateways and gatekeepers of “E”vironments.
This idea of a hosted, secure and adroit virtual ME (V.ME) arose, with a major tip of the hat to the “organic persona” ideas liberally incorporated from key forward-thinking AT&T Bell Labs and Network Systems executives many years ago, and my work with them on their MyNetworks intra-prenuerial effort which was way ahead of the headlights and never commercialized. (Just as aside, I even protected V.ME as intellectual property for my consulting practice. I had no takers on licensing it for a service offering although I came very close with several industry household names.
That said, the new V.ME lexicon, because of the accelerating pace of innovation seems more relevant than ever. In fact, a Perspectives 17 panelist, during a fascinating discussion of new business solutions for CSPs, remarked that, “traditional market distinctions about communications are eroding since we are all services consumers based on whatever our online persona (work or personal).” It struck a chord.
I could elaborate further but space is limited. However, it is a useful segue to my other concern about the future vitality, actually viability of CSPs. This is a subject of intense interest and concern for almost the entire career. Plus, unlike the question of industry semantics, it has a sense of urgency.
Dumb pipes, smart pipes whose intelligence is bypassed, or ecosystem hubs?
Let me start with my prejudices.
At a very high level, traditional CSPs are billing companies. They happen to serve and bill for what is global economy mission critical, utility and utilitarian functionality. The challenge for CSPs in an increasingly all ways on/always connected world is to generate enough revenues and profits, i.e., assure they can bill for, not just traditional connectivity services but also value-added new ones.
While CSPs like providing physical connectivity (so-called “dumb pipe” services), they rightly or wrongly view their manifest destiny as capturing as much of the current and next generation value-added as possible. The fly in the ointment has been the Internet. It serves as the enabler of new competitors who can economically leverage basic service into something customers perceive as incredibly valuable. This obviously includes social media, streaming video, etc.
To the swift and innovative have gone the spoils! This is very concerning to CSPs to say the least.
What can be called “the ceding of value-added opportunities,” to the likes of Google, Facebook, Amazon and host of others, raises a series of questions about the future of the CSPs.
They know they have to become more efficient and effective. This goes under the general heading of “network transformation” which entails making operations more automated and virtual amongst a host of things. However, making networks more agile and “smarter” thanks virtualization and programmability does not guarantee those smarts are used and billable. Indeed, network modernization in many ways enhances the ability of fast-moving innovators to disrupt markets, gain dominant market share, and bypass CSP billing for value-added.
So what are CSPs to do?
One answer could/should be recognition and action on becoming that hosted secure intersection of the content/context-mediated virtual and physical worlds.
In an era where TRUST is in short supply, yet is foundational to the sustenance and growth of all things “E”, being the gateway/gate keeper of trusted interactions is how CSPS can remain relevant and keep their centrality as ecosystem anchors going forward.
It is how they can make what I have called in numerous postings “The Hotel California Effect,” operational. This means translating the Eagles hit song words, “You can check out any time you want but you can never leave,” into competitive advantage. In other words, assure customers are always on the CSP billing systems no matter where they may roam.
CSP future success will require major changes. Just to name a few, from a long list, would include such things as: corporate culture, workforce skills, attitudes toward partnering, marketing and sales positioning, and speed to and in markets.
The challenge here is that time truly is of the essence, and the competitive landscape is daunting. As GENBAND CEO, David Walsh articulated in his keynote, the valuations of Google, Facebook, Amazon, Netflix, Uber and others who were not factors two decades ago now dwarf those of CSPs. Historically, CSPs were practitioners of the golden rule, e.g., “He who has the gold rules!” The CSPs are no longer the 800 pound gorillas in the market. The ability to control their destinies is now problematic.
This is not to say CSP prospects are necessarily relegation to the role of arms merchants to other dominant suppliers of value-added services. It rather is to highlight that in a V.ME world using what are currently unique and highly leverageable assets is a window of opportunity rapidly closing. CSPs are whom we should trust with “E”verything. Companies like GENBAND/SONUS and others are giving them the tools to transform and prosper in timeframes and with innovative capabilities that can make a difference.
Whether CSPs can change by accommodating and leveraging change to create sustainable competitive relevancy and advantage is an open question. It is one the CSPs I have spoken with are having a difficult time answering.
There are glimmers of hope. For example, at Perspectives 17, the new Deutsche Telekom Immmr OTT mobile communications service gave an interesting presentation. It is one worth checking out. There are other examples of CSPs all around the world that in my mind “get it.”
It is my hope that they do not just get it, but get it right and get it in time. It is something describable in words that matter to everyone in our industry.