I Want a Divorce!

By | July 14, 2017

For all the innovation and all the talk of digital transformation, precious little seems to actually be happening. Service providers are stuck on WiFi, LTE, Gigs and data plans while over-the-top providers (and pretty much everyone else) are imagining and actually building new and mostly useful digital service offerings.

Face it, these are two different businesses. We need to accept that while infrastructure is absolutely necessary; it’s time to divorce the network from the services. I mean a real divorce.

“You keep the network, I’m taking the services!”

You’re Suffocating Me

We’ve seen trial separations already; separate business units and cable companies have gone so far as to add another name to their brand Comcast and Xfinity, Charter and Spectrum; but behind the scenes they’re still married. Customers can’t purchase one without the other. The network side still dominates the business because it always has. And, until now, that hasn’t been so bad because the network was the product, but now the network is only part of the product and an invisible part at that.

Network folks care about network performance and network failures and they should. But that one-to-one, network-to-customer relationship has been subsumed by an extensive combination of providers, applications and data (aka services). Real, put-together services that don’t require customers to purchase other components or applications while configuring and formatting dozens of settings and preferences.

Services they can just turn on.

Network and cloud infrastructure is baked-in to nearly every process and activity that consumers and businesses are buying now and will want in the future. So it’s time for network operators to stop fighting and go back to their glory days – living their single life where the only thing that mattered was the network. While the services group needs to move on and fulfill its own unique potential.

A Fresh Start

Upgrading networks to run IP takes a long time, is very expensive and remains the number one priority for network operators. Previous ICT Intuition research shows that nearly 60% of operators believe they don’t have the network they need to support digital services. That means that all their energy (and budget) will go into construction. Starting a services company that is independent of the demands of the network enables it to more quickly define and deliver services without the threat of losing budget, staff, time or focus.

On the services side, it’s important that the new company be genuinely new. That means the new company isn’t managed by the same people that ran the old company. That means a consultative, solution selling mindset and using analytics, automation and machine learning to serve customers not infrastructure.

IT will be critical but that organization also takes on a different look. Instead of building and maintaining large siloed systems and databases, they need to become agile and accommodating. According to CIO magazine, CIOs control just over 50% of technology spending but 100% of maintenance, management and support.

Instead of developing and maintaining interfaces, IT teams will develop and maintain standards for integration with platforms both in and outside the company and the cloud. They will help other business units become smart buyers of cloud services and technology. The best and brightest will then have time to develop killer apps and differentiating functionality rather than maintaining aging OSS/BSS.

Better Apart

A divorce now will enable service providers to grow from a single large enterprise into two larger enterprises. The network company will have the ability to focus on the best ways to implement and monetize new infrastructure technologies like NFV, SDN and 5G. The services company will have the flexibility to zero-in on both retail and business customers and use that enhanced infrastructure to deliver on-demand services that are both desirable and useful.

After the divorce each company has the opportunity and flexibility to grow and evolve into something much more valuable to customers and shareholders alike. There will be tears and screaming but once the dust settles there won’t be any regrets!