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Vendor metamorphosis

When things change in our super-connected digital world, nowadays they tend to do so at a quickening pace. Trend cycles have shortened from years to months and turned from analog to almost digital waves. This is no different in the communications sector.
The consumer-centric behavior evolution, towards the hyper-personalization and real-time control of the communication experience, is having a massive impact on service providers of all kinds, forcing them to compete with uncommon business models of rival players in all verticals. This is resulting in a massive disruption of the sector, creating challenges all around.
Whilst operators are challenged to figure out how to reinvent themselves, they are rarely helped by the vendors of technology and systems who should naturally play a central role in enabling them to provide the disruptive and innovative services they need to offer.
This needs to change. To do so, vendors must re-think the services they offer. But more importantly, they should re-invent their role in the telecom ecosystem, while meeting their customers’ needs using innovative and tailored business models.
Be the ecosystem or become part of one
Today, vendors also need to learn to be part of an ecosystem that is a solution rather than only offering a component or part of it. For customers, the “Lego” style approach is good when one has the time and detailed knowledge required to select and combine the right pieces to create something that looks like a plane and also flies. But, not every customer has that capability and luxury of time. Even the large ones are slimming down their internal resources and concentrate on their core strength and business – which is infrastructure, service, and brand.
Vendors, therefore, need to move away from offering simple switching equipment and create solutions. They should add for example BSS or OSS capabilities to their basic offering. They should also focus on offering other value-added services, such as big data analytics utilizing AI and machine learning to provide full insight into traffic patterns and behaviors. The objective is to expand the purpose by creating an ecosystem or solution with, not only the operator customer but also the end-customer in mind. The idea here is for vendors to become an integral part of their customers’ offering and experience and to be seen as a partner and not necessarily a pure box shifter.
Mirroring customers’ reality
The unpredictable market we now live in, in terms of customer behavior or adoption, does not allow vendors to continue enjoying the predictable revenue streams they have been used to over the past decades from their service provider customers, who themselves live in uncertainty.
The problem comes from the fact that vendors’ current capex revenue model does not match the consumption-based spending habit of consumers or enterprises, who might even expect basic features to be provided free of charge, ultimately maybe paying for them by sacrificing their privacy.
Vendors must evolve into service or business enablers who, besides providing technology or software, also mirror the commercial model used by their clients and take part in the business risk that comes with it. That new breed of vendor will, therefore, by definition, be deeply involved in their clients’ commercial success.
The commercial model for service enablement is all about being able to match the cost plan (what we offer) to our customers’ revenue plan (what they sell), which needs to be matched to the spending habit or profile of their own customers (how much they want to pay).
Redifine your own reality
Last year we at Cataleya embarked on our revolutionary journey, driven by our vision and imagination of how technology needs to serve us today and tomorrow.
In an industry where transformation and disruption are the new mantras, communication service providers if they have not done so yet, will have to go through a metamorphosis to stay relevant. We at Cataleya are here as an enabler and partner of their own journey of change.
Our mission is to empower customers to become the next industry disruptors by enabling them to innovate, monetize and simplify their business better and faster.
Advanced analytics, cloud-based service creation, flexible business models and hyper-personalized service and support are our contributions to their own revolution.
To change paradigms we had to redefine flexibility first, so we could revolutionise our approach to shaping the four most relevant areas of real-time communication solutions and platforms in this new and brave world of constant change.
The first revolution is the way we allow the tailoring of our product and service features to really fit service provider requirements and needs.
The second revolution is the way we allow our customers to consume technology. Either using simple purchase or subscription models – our customers only buy or subscribe for what they actually use in the network. This in addition to offering different deployment options: hardware based, software or virtualised.
The third revolution is the way we allow clients to empower their customers to service themselves via online portals for features such as SIP trunk ordering and deployment, call recording and many more solutions to be launched in the near future.
The fourth revolution is about reversing who fears whom. The service provider the fraudster or the fraudster the service provider? We offer built-in or standalone real-time Machine Learning based fraud detection and prevention tools that let our customers catch the fraudsters before it hurts.
No risk no glory
Another important change required in the vendor space is the need for the deepening integration of technology or software vendors into the product design and delivery process of operators.
Going forward, vendors need to act almost as if they were part of the customers’ organizations. This means more than being a technology partner, it requires vendors to become an integral part of their customers’ projects and therefore their success. This means that vendors also need to increasingly share the risk with their customers.
The era of shifting boxes and batches (software) and getting paid up front is about to end, and it will end swiftly. This challenges and puts into question the way vendors are structured and organised and the business concepts and models they believe in or are used to.
I am involved in two businesses that truly reflect that new future “vendor”, not only by the commercial model applied, such as pay per use for example, but also by their organisational structure, where each and every member of the company is a co-owner.
Only true entrepreneurship across the entire organisation allows it to understand what its clients go through and what their real pain points and needs are. Only when all people involved have skin in the game do they strive to achieve what is required and what customers desire.
That will be the only future for the “Technology Vendor” or no future.
About the Author
Prior to founding Cataleya, Andreas was the Founder and Group CEO of Epsilon Global Communications, which includes Epsilon service provider and Cataleya technology businesses. He is now continuing to supporting the industry’s evolution through his start-up and investment facilitator (Incipio) and his position as Chairman and CEO of Cataleya and Member of the board of Cirrus Core Networks. His passion for supporting startup businesses and people who dare, is further manifested in his active role as a member of YET, an initiative launched in collaboration with the United Nations Sustainable Business Network ESBN.