In brief: Recounting my briefing in London with Amdocs prior to the CES 8 launch, the results of a recent service provider survey and the wider implications of both as operators move from selling access to selling value.
What happens when the Internet of Things – trillions of devices, sensors and “things” connected to communications networks by 2017 – collides with the advance of the mobile Web? It’s a tough one to call, but the ongoing series over at ReadWriteWeb outlines the elements of this mega-trend. From the spread of barcode scanners and schemes to the re-emergence of M2M on mobile operator agendas, it’s clear that the connected world is upon us.
This was the also the message that came across loud and clear during the Amdocs Connected World Dinner I attended during my last trip to London to connect with MSG partners and clients.
The informal thought leader event provided me the opportunity to meet with Amdocs executives (including Nick East, general manager, OSS Division, and Cassandra Millhouse, director of product marketing, OSS Division) to get a sneak preview of Amdocs CES 8, the updated version of the company’s customer experience system product line (detailed further down in this post). We also took the opportunity to discuss the business and technical demands of the Connected World and debate upcoming industry hot topics in the run up to Mobile World Congress (MWC). My personal thanks to Amy Edwards, Amdocs Managers, Public Relations, for reaching out to me.
The Connected World discussion is centered on how service providers can/should adapt to cope with the capacity challenges to support trillions of “things” that require ubiquitous connectivity. However, the Connected World isn’t just about things; it’s also about people.
Specifically, it’s about architecting the flexible business models that will also connect and empower us. Competitive advantage results when service providers leverage the capabilities of the network and the customer data it collects to deliver highly personalized offerings.
The critical role of customer data in the delivery of relevant mobile search results, mobile CRM schemes and targeted mobile marketing and promotion are obvious. (These two podcasts focusing on the personalization technology and tools within the Amdocs offer – resulting from the acquisition of ChangingWorlds, a personalization and recommendation provider – underscore the value of data and the impact on the operator’s bottom line.)
Personalization also sits at the center of Amdocs’ Universal Storefront – a one-stop-commerce-experience-for-all-goods-and-services offer and a focus of its updated CES 8 portfolio. The aim: to allow providers to offer a single customer interface that masks the complexity of multiple systems and partnership relationships. (A business imperative for service providers determined to power this long tail of app stores and/or cultivate developer communities, according to my personal favorite post from VisionMobile.)
BUSINESS MODEL CHOICE
So, which business models drive positive and powerful customer experiences? And how can/should service providers prepare to do business in a hyper-connected marketplace?
My briefing with Amdocs provided some interesting insights – particularly since Amdocs reduces the plethora of possibilities down to three concrete business models:
• The experience model: The provider makes the conscious choice to own the customer experience and establish its own brand equity. Here, the provider chooses “audience” over “access,” and follows through with expansion into media, advertising, commerce and a range of so-called “Telco 2.0” services. An example Amdocs offers is the O2 Joggler “home appliance,” a service that is connected to the network and synchronized with family members’ mobile devices. It does loads of stuff under the O2 brand, letting families keep a common calendar, connect around online photo and video albums and consume Web-based content.
• The vertical model: The provider creates and delivers services targeted to a specific vertical such as healthcare or education. (BTW: This model is gaining serious traction, earning it a central spot in the Netsize Guide I just completed. Verticals were also a focus of a comprehensive industry survey conducted by Netsize. Results will be released closer to MWC and MSG will feature an in-depth analysis of the findings closer to that date.)
• The partner enabler model: The provider becomes a smart wholesale pipe and distributor for multiple partners. In line with this the new product portfolio CES 8 exposes network, IT and data assets to content and developer partners. An example Amdocs offers is AT&T’s behind-the-scenes support of the Amazon Kindle.
Some providers might pursue a combination of all three models, depending on their business objectives.
AMDOCS SURVEY RESULTS
It’s encouraging to see this thinking (supported by updates in the Amdocs offer) because it confirms that the basis of competition in the marketplace is shifting from battles between companies to battles between networks of companies. As I have written many times here on MSG and in my white papers and books: winning is about creating the platforms to freely enable other companies/players in the ecosystem to participate in value creation.
More importantly, the timing of the Amdocs launch and thought leadership dinner tells me mobile operators are finally ready to borrow a page from the strategy of Web giants such as Google and Amazon, companies that cleverly opened up their platforms just enough to aggressively further their own interests and promote their business ecosystems’ overall health.
Fortunately, the sharpened service provider focus on new business models, expanding relationships and leveraging customer, network and product data is more than a hunch. It is also a key finding in the Connected World Survey conducted by analyst firm Frost & Sullivan on behalf of Amdocs. Vendor spin aside, the survey of 50 North American and U.K. service providers and stakeholders sheds important light on the opportunities/challenges at the top of the service provider agenda.
Among the highlights:
- Web giants are welcome: More than 90 percent of respondents stated that wholesale services and partnering with consumer Internet companies such as Facebook and Google were a growing area of business opportunity. The vast majority (more than 90 percent) also recognized the need for flexible business models to support new partnership opportunities.
- Billing, charging and CRM are central: More than 80 percent of respondents cited investment in the network and network planning as the number one area of investment in terms of preparation for the Connected World. Respondents identified the areas of device activation, billing, charging, settlement and customer-directed self-service as essential to ensure future success. Seamless activation, self-healing devices, and “do-it-yourself” support were ranked as critical.
- Verticals = New growth: Qualitative data from the survey found that the most promising new areas of focus for service providers include healthcare, consumer electronics, government and utilities. Service providers identified these industries as prime for a high degree of new device adoption, infrastructure support and potential end-user demand.
My take: The survey reveals that the industry is indeed evolving, turning up the pressure on service providers to take the plunge and adopt new business models. Amdocs’ evolved offering correctly focuses on what it takes to enable service providers to define and launch services; integrate customer support, billing, network operations and service delivery; and offer wholesale and partnership models.
Service providers that want to transform their businesses and succeed in the Connected World must boost agility and – more importantly – build an arsenal of capabilities (around customer analytics, preference, presence and device management) that they can/should share but never give away.
Note: The advance of the app stores makes pursuing an all-inclusive partnership model a must. MSG analyzes the impact of app stores and requirements for a better retail experience in an upcoming personalization and recommendation report. Amdocs will feature as a profile in this report along with other leading players in the space.
Disclaimer: Netsize is an MSG supporter. Amdocs is not an MSG supporter. However, MSG has published a by-lined thought leadership column authored by a ChangingWorlds senior executive. MSG has also participated in invitation-only thought leadership events organized by Amdocs.