Hard talk, hard truths? Are BSS vendors stifling telecoms innovation?
- New discussion document rattles the vendors cages
- Financial 'short-termism' the root of many problems
- Time to abandon expensive and outdated commercial models
- And move from traditional network timelines rooted in the past to the Internet timelines of the future
A new industry discussion paper from Dublin, Ireland-headquartered Openet baldly declares, in undiplomatic and unvarnished language, that BSS vendors are standing in the way of telecoms innovation and that the current vendor-operator model needs to change radically and immediately. The report adds that the time is ripe to disrupt the comfortable software market status quo and offer a new way of doing business to operators and their partners, including systems integrators and others. Unsurprisingly, Openet says it's the company to lead the charge.
Openet reckons the best ways to change the game and open it up and add more value to operators is, first of all, to abandon expensive and outdated commercial models that stifle operator innovation and that means fomenting a revolution in terms of software pricing and closed deployment methods.
The Openet paper certainly takes the bull by the horns. It says that BSS vendors witter on endlessly about enabling telcos to change and disrupt the market but the reality is that the vast majority of them are "still living in the dark ages when it comes to enabling change". It adds that for many, it is simply not in their interest to drive change because that means shorter service contracts, reduced licence fees and freeing the captive customer from vendor lock-in. The solution, it seems, is "to develop technology at a modular level and make this available with a defined, certain, commercial model that is more Internet- than traditional telecoms price-structured." Yes, maybe, but how and why wouldn't, couldn't, traditional 'old-style' vendors do the same?
Well, a proof of its credentials, bona fides and commitment, Openet points out that years ago it instituted a programme to redevelop its modular software platform to support a wide range of OSS/BSS solutions in general and specifically those centred on charging, policy, mediation, big data management and customer interaction. This is its digital enablement platform, "Forge", that permits plug and play integration with third party software and pretty much any network equipment or IT systems. It is also cloud native and capable of performing in a wide range of virtualised environments.
Failing to address operator business needs
The paper reports that all BSS vendors (and Openet does include itself in that catch-all category) are simply failing to address the business needs of operators. Indeed, vendors have long been locked into an 'old-world' relationship and pricing model that just doesn't put operators first. It cites the accepted sector norm of expensive application licenses and never-ending service contracts to build huge an inflexible software applications which are no longer valid in today's digital market.
Another hard truth, says Openet, is that all BSS vendors have also been slow to adopt new technologies in ways that provide innovative and better solutions to operators at affordable and attractive prices. Of course, in any commercial environment and interchange, Adam Smith's "hidden hand of self interest" is never hidden very well or for very long and some vendors have determinedly stayed with established technologies and delivery models because it is to their pecuniary advantage to do so.
Change is difficult and it takes courage, determination and a longer-term rather than a short-term attitude to return on investment and profitability. Add to that the millstone of quarterly reporting and the endless quest for increased revenues and profits from established technologies to meet the expectations of analysts and investors and it is evident how hard it is to look forward properly, plan and devise strategies and tactics to meet new and changed circumstances.
Short-termism is a bane that will eventually drag down the market and ruin some established vendors unless something is done to permit longer-term planning and do away with the frenzied cycle of operators having to hit unreasonable and often untenable "numbers" demanded by self-appointed and unaccountable "market analysts"
The established BSS vendor business models are tried, tested and easy to apply (well, comparatively easy anyway) and go something like this: First, licence some software and equipment. Then charge for services to configure and run the software. Next, make operator’s projects very complicated and the solutions to them enormously complex, thus ensuring that the operator cannot manage the technology for itself. Thereafter, make project implementation slow and long drawn-out. Finally, charge support and maintenance fees but make upgrades difficult, risky and expensive. This approach can more or less guarantee BSS vendors seldom have to have hard and fast product roadmaps, even if they claim that they have them
And what's the result for operators? A highly expensive technology platform that is very difficult to change and at the same time very slow to deploy or operate. It makes it all but impossible for operators to react quickly to changing end-user needs and prevents them from innovating like a web company. This creates and perpetuates an environment in which only the most conservative or unrealistic business cases can prosper. In turn these combine to kill marketing imagination and eat away at an operator capacity and and capability to change. The Openet discussion paper says, "This is not healthy symbiosis—this is crazy parasitism. It must stop." Ouch!
Change is hard, especially when revenues and profits are all but guaranteed
Simultaneously, commercial models have to change from traditional vendor pricing to new webscale/Internet-style pricing models. The trouble is that many vendors would be very loath to contemplate any such revolutionary idea. It disturbs the even tenor of established practice and easy and known revenues. Next comes the requirement to scrap existing deployment models and abandon the norm of massive transformation projects to adjunct, pragmatic and profitable projects attuned to address the business needs of the operator. Again, this will be absolute anathema to some BSS players.
Then there are new business models that will enable what the discussion paper calls a "fail fast/learn fast" culture and a move from the telecoms economics of the 20th (and perhaps even the 19th) century to the Internet economics of the 21st century. That change will no doubt come eventually, it will have to, but not that many traditional BSS vendors seem to be rushing to embrace that brave new world at the moment. It seems much more likely that they will have to be dragged kicking and screaming to change rather that running towards it with open minds and open arms.
That unwillingness relates directly to Openet's final key area to be addressed if the current vendor/operator model is to be overturned. It is the matter of speed and the amount of time it will take to move a vendor away from traditional network timelines (often spanning many months if not years) and web timelines (measured in week or even days).
Openet has the good grace and good sense to say that its agenda is neither particularly new or massively original and that "any vendor could come up with this list as a marketing exercise". It doesn't make it any the less worth saying though. The company also freely admits that it’s not changing its own approach to the defunct vendor/operator model for purely altruistic reasons and for the sole good of the operators, but because "we believe these changes will be good for operators and progressive vendors". Like Openet, of course.
It is both refreshing and surprising to see a vendor play the rebel and take on its rivals in such a blunt "in your face" way. That said, it remains to be seen whether the Openet broadside will hole anything below the waterline and cause a change of course or just bounce off the superstructure of the big vendors stately galleons as they continue to sail on regardless towards the edge of the world. Either way the discussion document "Changing the Game. Fixing the broken operator/vendor model" is well worth a read. You can download it from the Openet website.
For more on OSS/BSS see our video on the Offer Canvas catalyst