Optical and IP transport company Ciena acquired software and service company DonRiver to shore up its Blue Planet portfolio.
One week after its CEO explicitly said it was on the lookout for new software M&A, Ciena announced that it has entered a definitive agreement to acquire DonRiver, a privately-owned software and service company specialised in federated network and service inventory management solution.
Ciena reported a strong quarter, but its software business suffered a 3% year-on-year dip. Although the SDN-based network management suit Blue Planet only accounted for a minor share of the total software sales, high hopes have been banked on it. When talking to analysts at the quarterly result call Ciena’s CEO Gary Smith said, “With Blue Planet, we’ve done a lot of learning over the last two to three years, …the bookings were very encouraging. And we should be able to come into the year — next year with a backlog for 2019.”
Similar to Ciena’s recent acquisition of Packet Design, DonRiver has been a partner to Ciena, so its technology knowhow is well known to the latter. Despite that it has a couple of A-list clients including Telstra, Comcast, and Rogers, it is not DonRiver’s clients or the revenues that was driving the acquisition, Ciena told Telecoms.com.
“The combination of Blue Planet and DonRiver will enhance our ability to deliver closed loop automation of network services and the underlying operational processes across IT/operations and the network,” said Rick Hamilton, senior vice president of Global Software and Services at Ciena about the latest acquisition. “With this new set of technology and expertise, we can help customers realize the full benefits of network automation by helping them move away from highly complex and fragmented OSS environments to those that accurately reflect the real-time state and utilization of network resources.”
Specifically, what DonRiver could bring to the Blue Planet portfolio, especially the Analytics & Intelligence component, is its capability to bring a holistic view of the network inventory. With networks getting more complex, stacks of OSS are being added to the architecture, making it increasing difficult for the operators to know what exactly is happening in the layers of networks. The vastly improved visibility and accuracy enabled by DonRiver’s expertise will strengthen Ciena’s value proposition to help operators optimise the OSS environments. As Ciena executives said to Telecoms.com, DonRiver’s engineers can do much more than network inventory, they are OSS experts.
The terms of the acquisition were not made public.
Either customer service is an afterthought for the telcos, or they are just genuinely terrible at it, but Vodafone’s new 30-day service guarantee sets to challenge the status quo of sub-standard service in the telco arena.
For new or upgrading customers, a 30 day trial period will be offered allowing consumers and small businesses the opportunity to cancel contracts without penalty if they are not totally satisfied with coverage, customer service or the performance of a new device. While coverage will be put to the test on a network which has had mixed reviews over the last few years, the focus here seems to be geared towards customer service. Areas which will come under the microscope include Vodafone’s 24/7 customer care, AI customer service chatbot, TOBi, the human customer service agents, biometric voice-recognition software and the effectiveness of the in-store tech team.
“We’ve been listening to what our customers want and over the last year have worked tirelessly to introduce new technology and initiatives to help us deliver great customer service,” said Nick Jeffery, CEO at Vodafone UK. “Now we’re backing our big improvements with a big promise – try us for 30 days and if you’re not impressed, you’re free to walk away. No penalties, no ifs, no buts.”
While this is a promising step forward, whether it will have a lasting impact on the telcos depressing reputation for customer service remains to be seen. Considering the past experience of the telcos, stepping into the firing line is certainly a brave move for Vodafone.
In a recent survey from Which, Vodafone ranked bottom of the list for customer service satisfaction scores. This might be a damning reference for the telco, but it should be worth noting the other network owners scored pretty shockingly across the board. Vodafone scored 49%, while EE was the next worst with 56% and O2 as the fourth worst in the UK with 58%. Three fared better with 64%, though the top ranking spots were all taken by MVNOs.
This is not the first time telcos have been singled out for poor customer service, as it has been a pretty common story over the last few years. It does appear the telcos give little concern to this aspect of the business, perhaps due to the limited number of providers in the market, and the critical importance of connectivity in today’s society; if everyone is bad, the consumers will have little option but to accept the status quo, as going without is not an option.
Customer service has never really been a selling point for the telcos, but perhaps this is the kick-start which was needed. All you can eat data packages weren’t common place in the early days, though Three challenged the industry and forced the hand of competitors, while the same could be said of all-inclusive calls and SMS. Evolution of services doesn’t seem to be an accepted term in the telco space, usually it requires disruption for any notable changes to benefit the consumer; perhaps Vodafone breaking rank might spur the cumbersome industry into action.
Vodafone has certainly been re-evaluating the business in the last 12 months, and now it seems to consider itself in a position to tackle the UK’s leading telcos. It’s always amazing to think Vodafone was once the leader in the UK market, though with a new mindset in customer service, new spectrum for mobile and a new partnership with CityFibre to tackle the broadband market, it is shifting itself into a promising convergence position.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tony Gillick, VP Solutions Management at Openet, urges the industry to transform its approach to BSS and OSS before it’s too late.
TM Forum’s recent launch of its Open Digital Architecture is good news for the industry. It captures a lot of the good work that has already taken place and sets out a blueprint for the digital transformation of BSS and OSS.
Today’s service providers know they need to change if they are to keep up with the pace at which the industry is moving. But with ever-decreasing ARPU, and the race to free data underway, they don’t have the luxury of embarking on lengthy, hugely expensive transformation programs to get their BSS and OSS stacks up to speed. Instead, they need an API-driven open architecture that enables them to get away from vendor lock-in and having to deal with inflexible, large vendors who will deliver projects and upgrade software on their terms.
The bleak reality is that if operators are to survive in the face of rising competition from web-scale companies, it’s now or never to make that change happen, so what does that look like for operators willing to transform?
Become the model for change
BSS/OSS have been around since the start of the cellular business in the 1980s, and that’s where the problems begin for today’s operators. Throughout the years, operators have built up a complex burg of legacy systems and processes, which are not only no longer fit for purpose but also nothing short of a nightmare to overhaul.
For operators, transforming OSS/BSS begins in two ways. First, with overhauling traditional commercial models, which have become slow to move and very inflexible. These commercial models are no longer fit to serve the agile world in which we live, one where subscribers want everything now, on-demand.
Today’s operators need new commercial models that are driven by short-term goals and that do away with the old, lengthy, never-ending service contracts that look at transformation projects over several years, instead of months or even weeks.
The second way in which transformation can happen is through new delivery models. It’s no secret that web-scale companies’ agility is beyond that of operators. But this need not be the case; by harnessing new processes and technologies such as DevOps and microservices, operators can replicate the agility of Internet companies. It is only through this open, innovative and experimental approach that operators will start to compete with the big OTT players.
By overhauling commercial and delivery models, operators will not only be able to boost their rate of innovation, but they’ll also see the industry-wide issue of vendor lock-in disappear. As the industry moves towards open technologies which proliferate the use of DevOps and Open APIs, fewer vendors will be able to tie down operators to lengthy contracts that provide little in the way of innovation and experimentation.
Setting operator priorities straight
But making change happen isn’t just about technical capabilities, it also requires a shift in mind-sets and priorities, particularly when it comes to the deployment of new services such as 5G and IoT. Although the race to 5G is well and truly on, the state of affairs for operators today implies that perhaps it shouldn’t warrant such urgency.
Operators’ resources are stretched and, where subscribers are concerned, the pressure is on to be better and do better – this means, selling a wider variety of personalised digital services. While 5G and IoT will undoubtedly bring about a wealth of applications that will benefit operators, neither of these technologies will bring about immediate ROI. It’s important, therefore, that operators invest their efforts in laying the foundations to not only ensure their survival today, but to be able to support the technologies of tomorrow, and that starts with changing the way they approach OSS/BSS.
A greenfield approach to OSS/BSS
Adopting the correct technologies will be the key to unlocking the OSS/BSS treasure chest. Operators should approach transformation with a greenfield attitude – that is, to start afresh, with no legacy systems or culture and to adopt a “digital first, customer first” approach. And this does not mean that existing large-scale transformation projects should be abandoned, instead, new greenfield approaches mean operators can run these in parallel to the current legacy stack being transformed.
This greenfield approach promotes the switch from hardware and software stacks to real-time, automated digital platforms. These digital platforms can see operators launch services in as little as 14-weeks whilst still going ahead with their longer-term transformation projects. By using these platforms, operators can leverage a modular, API-driven approach and select which service or “platform component” they need, on an ad-hoc basis. This promotes faster service delivery but also reduces the cost attached to digital transformation.
Most importantly, this open, best of breed, platform approach is the antithesis of big vendor lock-in. By drawing on open technologies, promoted through the use of open APIs, operators will be better suited to encourage partnerships and the collaboration and sharing of technologies within these. Not only will this reduce OSS/BSS cost and implementation timescales, it will also prevent mega-vendors from selling services from a single supplier.
Ultimately, it is this openness that will promote innovation in the telecoms industry and that will see OSS/BSS become the systems operators need to succeed in this ever-evolving, digital world.
Digital Transformation: just a bump in the road
There’s no doubt that digital transformation is hard, and it’s clear that few operators know where to begin. But the solution lies in this greenfield attitude; by starting anew, with no pre-conceptions or notions in mind, operators can leverage experimentation to roll out new services that may have otherwise taken years to deploy.
It is this provision of tools – namely the platforms, new technologies, APIs – by vendors that will encourage operators to innovate, and will see the challenges associated with digital transformation soon fade into the telco past.
Moving into the connected era has threatened the livelihoods of numerous individuals, but a new initiative from Busk In London and iZettle, backed by London Mayor Sadiq Khan plans to bring buskers into the digital economy.
Just like pigeons and pretentious coffee shops, buskers have become a staple of the worlds’ biggest cities, but like checkout employees in the supermarket, their very existence has come under threat. The connected era is all about digital payments and moving towards a cashless society, meaning the fame-chasing buskers were under threat of become penniless. This initiative, launched by Khan over the weekend, will aim to put contactless payment terminals in the hands of the performers.
A small number of performers have been testing the solution over recent weeks, though the scheme will now be rolled out across the 32 Greater London boroughs. The readers will need to be connected to a smartphone or tablet, while the donated amount will be fixed by the performer, and will be compatible with contactless cards, phones, and smartwatches.
“Now, more Londoners will be able to show their support to the capital’s brilliant, talented street performers,” Khan said.
The devices themselves will be provided by iZettle, which seems to have a head-start on Square in this area, though it is not clear whether the performers will have to pay for them up-front. Such devices are becoming more common for small businesses or street vendors, with PayPal recognising the potential for the technology. Last month, the tech giant agreed to acquire iZettle for $2.2 billion, allowing it to expand its presence in in-store payments globally.
Although there are still segments of society who are clinging onto physical cash, trends are heading down the digital avenue. According to data from Visa, contactless payments for transit and Transport for London (TfL) was up 97% over the last 12 months, while in Hong Kong transactions have tripled in the past 18 months, with one in three face-to-face Visa transactions is made via a contactless payment today. Canada is another country streaming ahead of global trends with Visa’s network processing 33 contactless transactions per second in the month of September.
Telefónica and Netflix have jointly announced a global partnership which allow the telco’s customers to watch the popular streaming service through its content platform.
As part of the deal, integrate Netflix’s service into Telefónica’s TV and video platforms across Europe and Latin America, while also allowing customers to pay for the service as part of their monthly Telefónica bill. The first launches will be in LATAM over the next couple of week, while the plan is to launch in Spain towards the end of 2018.
“This agreement is a big step forward in Telefónica’s bet on open innovation and collaboration with leading companies around the world,” said José María Álvarez-Pallete, Chairman of Telefónica. “We want to offer our customers the most compelling video offering possible, whether it’s our own content or third party providers. The partnership with Netflix will significantly enhance our existing multichannel video platforms.”
“Over the next several years, our partnership with Telefónica will benefit millions of consumers who will be able to easily access their favorite Netflix shows, documentaries, stand-ups, kids content and movies across a range of Telefonica platforms,” said Reed Hastings, Netflix CEO. “Making Netflix available on Telefónica’s familiar, easy-to-use TV and video platforms enables consumers to watch all the content they love in one place.”
— JM Alvarez-Pallete (@jmalvpal) May 24, 2018
The aggregator strategy is perhaps the most logical way for telcos to make any meaningful impact on the content world, a key prong as the businesses search for the much lauded convergence business model. While it might seem like an attractive idea to own content or chase lucrative rights deals, realistically, the traditional telco business model does not lend itself suitably to the content industry.
Owning the content space, like Netflix in the streaming world or Sky in the UK’s pay TV market, is a different approach to business. It requires undertaking a greater level of risk and offering creative individuals the opportunity to make decisions which might not sit comfortably with everyone. It also requires agility, relationships with the production industry and a more extroverted brand. When you consider these factors, telcos are not set up to launch an assault on the content space. It is also a time consuming job.
Looking at the BT content platform, the sports feature was attractive to customers, but some might argue the lack of supporting content in other genres frustrated customers. Building the entire content package, like Sky has for instance, takes a lot of time, considerable effort and notable investment. BT’s lack of depth in it content offering is starting to show, as subscribers start moving towards the exit.
That is not to say the telcos will not be able to compete in this segment, however transforming the business will take time and the content revolution is here right now. The consumption of content is changing drastically, shifting towards mobile, presenting a notable opportunity for the telcos. Telcos don’t have to own content, but they can own the relationship with the consumer, who is increasingly becoming frustrated with the increasingly fragmented distribution of video. Aggregating all this content into one space is a logical way which the telcos can add value to the content ecosystem.
The telcos have arguably perfected the billing relationship with the customer and offer a non-intrusive way to put content in-front of the user. Minimising the number of bills would also be an attractive idea to the consumer, while simultaneously increasing the ‘stickiness’ of the telcos. Negotiating the relationships with companies like Netflix, will be a time consuming process, there are so many of them after all, but it is an excellent way for the telcos to stay relevant and avoid the dreaded tag of utility.
Google has announced it will launch additional features for its smart speaker software soon, including the ability to pay back friends just by using your voice.
A few years back at a conference, one speaker commented that the banks shouldn’t be looking across the high street for competition, they should be looking at companies like Google and Amazon. With this latest update to the Google Assistant, it does appear this premonition is starting to come true.
In a couple of months’ time, users will be able to instruct their Google Home device to send money to contacts, who will then receive a notification that payment has been received. The assistant will also be able to give friends and family members prompts to pay you back as well. These functions are generally available for those who have the Google Pay application installed already, but this move takes the business closer to the smart home dream.
“You can easily send or request money from your contacts – for free – using the Assistant on Android and iOS phones in the US,” Sam Kansara, Product Manager for Google Pay. “In the coming months, you’ll be able to send money on voice-activated speakers like Google Home.”
The introduction of the Google smart speaker, which could be viewed as a bit of a loss leader, could be seen as a way for Google to get more entwined in your life. Right now most people have a Google email account or use the search engine as default, but what about the rest of the time. That is too much time not to be engaging with Google.
By introducing a quirky way to pay friends back, and removing the friction of logging into online banking, Google is normalising itself in the world of payments. It would not be surprising to see Google partnering with utilities companies before too long as a simpler way to pay your bills. With the payment reminder function being built into your psyche, you won’t even mind Google prompting you for permission to pay your water bill in the future either.
This is where the internet companies are very clever. The technology is probably already developed for Google to take control of your personal finances, but by drip-feeding features into your life the idea of Google taking control of your personal finances is not as intrusive.
The battle between Google and Amazon for control of the smart home is certainly an interesting one, but controlling the users wallet would give a huge advantage. Facilitating the relationship between the user and the commercial world could lead to all sorts of benefits, as well as trust of the user. If you trust your speaker to pay your friends back, you will probably trust it to order you a pizza. This is where the Google search advertising business model could start to make money in the living room.
It might not be the answer anyone wanted to hear, but it is probably the one they are least surprised to hear.
The question of what the next generation of OSS should be was the discussion at the ‘OSS in the Era of SDN & NFV’ event in London, but there isn’t really much of an answer to offer. This isn’t necessarily a massive issue though. When you consider the number of moving parts in the telecoms and technology industries, a right answer will always be an old answer before too long.
So perhaps we should be asking different questions. Finding a specific answer might be a maze to madness, but looking at whether we have made any progress is certainly an area which will offer more encouragement.
“OSS and telco transformation is like trying to change the wheels of a car while driving down the motorway,” said Heavy Reading’s James Crawshaw.
Some might call that a cop-out, but it is very true. Transformation in any sense of the world is complicated because you not only have to make sure the wheels are tightly bolted on, the oil is topped up, the engine is configured correctly and your passengers are safe and comfortable, while also keeping an eye on whether the car is pointing the right direction. And don’t forget, you can’t spend too much.
Extending the metaphor, OSS is getting lost in a growing traffic jam of buzzwords, acronyms and breakthrough technologies. SDN and NFV may no longer be the most prominent conversations in the telco space anymore, though they still are important. But what about cloud native? Microservices? Containers? How can DevOps be coherently integrated? And who is keeping an eye on 5G and the IoT trends which are emerging?
“There is a lot of noise right now, and OSS is the bottleneck in the telco transformation journey,” said Crawshaw.
This might not sound that encouraging, but we picked up on a couple of underlying comments throughout the morning presentations which do offer a glimmer of hope.
Firstly, telcos seem to have recognised the problem. The problem is not the messaging platforms which destroyed SMS revenues, or the OTT businesses which are capitalizing on the network investments. The problem is the fact telcos were stood still while the rest of the world moved on.
There has been an attitude of superiority from the telcos over the last couple of years, because they used to be the guys who bossed business. Through the mobile revolution, the telcos were the guys to invest in, and the dictators of the technology world. But now they aren’t. They have been relegated to the role of utility, and the need to search for new ideas is apparent.
Part of searching for new ideas is an inward process as well. It is the need to evolve and compete. Right now the telcos are the ones who are facilitating the massive surge in internet traffic, but not capitalizing on it. The OTTs are at the top of the pyramid collecting the lion’s share of the revenues and the telcos are at the bottom collecting the scraps.
After a period of denial, the talks at the event seem to have accepted this new world order. And more importantly, there does seem to be a plan to tackle it. Part of this is new ideas, and part of this is transformation of various areas of the business, including OSS.
The second change which was noted across the morning sessions was around those who are contributing to these decisions and evolutions of the business. Whereas this has previously been a bottom up approach, there are more board members and commercially orientated individuals getting involved.
This is quite an important shift, as it is no-longer just a technology decision, but more commercial considerations need to be taken into consideration. While this might sound like a simple development, the importance should not be devalued. More people understand business than they do technology. It makes these projects more accessible and more relatable, and because of this, these projects are now instantly more respectable.
The final talking point which was brought up was to do with the mindset which is taken when looking at technologies like OSS. In its early days, OSS transformation was thought of as a cost saving process, which is all well and good, but it does run the risk of being shuffled to the side. Saving £2 million a year (or however much it is) won’t make you a leader in your field, but creating a product which generates an extra £2 million a year will start to turn heads.
Views on OSS have started to shift away from cost efficiencies and more towards the idea of creating new services, and therefore additional revenues. Business leaders in general, especially in the telco space, will also be more turned on by the idea of making money than saving it. The idea an OSS transformation can more quickly or easily bring an offering to market, will ensure such projects are taken more seriously.
The last two are critically important not only in the OSS space, but the telco industry on the whole. It shows a definite shift in attitude; these are no-longer reactive discussions, fighting back the waves of challenges, but a proactive one, searching for the calmer and richer waters. Because of this more commercially orientated approach, these projects are more likely to succeed. Appeal to the basic human nature of constantly wanting more.
Perhaps the discussions at the event were what many people were hoping for. There is no simple answer for OSS in next generation era of SDN and NFV right now. But we’re heading in the right direction.