Implementing all the changes hitting tech companies in communications technology “is akin to changing the wheels on the bus when it is moving full speed down a mountain pass,” says Technology Business Research analyst Michael Sullivan-Trainor.

In a Q&A, Sullivan-Trainor, who is an executive analyst in TBR’s Telecom Practice. Michael specializes in telecom vendor and operator research, and helps set overall research direction, talks about the changes sweeping the communications sector. He leverages his 25 years of experience in the telecom industry to provide thought leadership and insight in syndicated and project work.

  • What are the opportunities and challenges facing the companies you cover?

We are living in one of the most exciting times in the telecommunications industry. Nearly every area of the business is undergoing transformation. New technologies such as cloud, Internet of Things (IoT) and 5G are on the horizon, generating opportunities for innovation in service creation, delivery and operations. Companies such as AT&T, Telefonica and China Telecom, to name just three of the leaders, are undergoing comprehensive transformation projects, staking their future on new ways of doing business based on new paradigms in network infrastructure, services and control.

The challenge for these companies is adapting technologies and businesses to the emerging world of ubiquitous digital service delivery over open infrastructures. Bridging the technology gap is easier, as services and R&D organizations within operators and suppliers are crafting transitional solutions. However, it is more difficult to change business models. Executing these changes in businesses that are running — some with very little leeway for risk — is akin to changing the wheels on the bus when it is moving full speed down a mountain pass.

The opportunities are great — new sources of revenue from existing customers and new revenue from new industries — but the challenges are enormous, and revenue growth, profitability and staff engagement are at risk.

  • How are these companies addressing the challenges?

We see a number of strategies for market leaders driving transformation. There are four key points to consider.

1. Think big and start small — Typically, successful transformation projects have a big vision with a road map from the current state or mode of operation to the future mode of operation. But the milestones and paths usually converge on the overall goal from a number of smaller initiatives. With telecom transformation, it is best to start small with a domain or services within a domain, and then take a building-block approach. The good news is small victories can build momentum toward big goals. The bad news is each step takes time. Taking small steps is often difficult in a telecom culture used to large-scale rollouts.

2. There is no migration path — The telecom industry has thrived primarily by migrating from one technology to the next with backward compatibility. With cloud, IoT and 5G, the migration paths are limited, especially when shifting to an open, collaborative service delivery model. The lack of a path means legacy infrastructure and new platforms need to be operated in parallel. To address the continued operation of the legacy infrastructure using cloud constructs, an abstraction layer needs to be created to enable a common control platform for orchestration and automation. Eventually, legacy infrastructure can be retired, but parallel operation and migration will stress financial and business models.

3. Don’t go it alone — Transformation requires greater collaboration with business partners and the industry community at large. Standardized, open-source solutions represent the best path to cost-effective development of specifications and platforms for the new areas.

4. Educate, educate, educate — All of these changes greatly affect staff and partners whose actions and reactions will help determine success or failure. Educating constituents on the vision, building blocks and paradigm shifts is a crucial part of transformation.

  • What else is important to understand about these changes?

There’s a lot more, like leadership and governance, learning from the best practices of others and benchmarking success, but that’s a conversation for another day. I would like to close by saying the excitement of the new world we are creating as a telecom community is the reason I get up and go to work every day.

(C) TBR