It would appear that the system integrators are back in service providers. Digital transformation is resulting in a shake out of the systems and processes used: driven by a change in how service providers do business. Moving to become a digital service provider is not about doing the same things as before and sticking a web based front end onto existing systems. It’s about a business transformation. And this scale of change is seeing the re-emergence of the large system integrators into service providers.
Back in the day when billing was all the rage and service providers were building out their OSS and BSS stacks, the SIs were out in force, partnering with vendors, building ‘ telcos in a box’, and winning a lot of major telecoms business to build IT stacks.
Then it all went a bit quiet.
In the BSS space, the network equipment providers (NEPs) started buying up the (then) leading vendors, as did some large IT companies in order to control as much of the telecom operating model as possible. We went from many companies working with SIs to provide best in class solutions, to large vendors controlling as much as possible and pushing a one-stop shop solution. From a BSS perspective this wasn’t too healthy. The SI approach involved the SIs selecting independent best of class vendors. If the vendor didn’t cut it, then the SI went elsewhere. This option wasn’t really open to the NEPs – if they’d paid several hundred million for a BSS vendor, then they can’t really propose a competing BSS vendor’s solution. As a result we seen several large network deals come with ‘free’ BSS solutions in order to drive a one-stop shop (aka operators being held prisoner to mega vendors).
The good news is that this is changing. The new market dynamics, new customer expectations, new enabling technologies and new competition are driving digital transformation. As a result service providers are not just upgrading / replacing systems, they’re also re-engineering a lot of business process and inventing new ways to do business. The SIs see this and many are busy working with best in class vendors to build up a portfolio of vendor solutions to drive the move to digital. Virtualisation and open systems gives a much more flexible approach to this portfolio than ever before. If a vendor doesn’t live up to the expectation then there are alternatives that don’t involve a re-engineering of all the solutions in a SI’s partnership portfolio. This open approach is what the industry needs. It’s more than just open technology – it’s about culture and attitude and working with the best solutions to deliver what service providers need to grow. I’ve sometimes heard that service providers may take say, a charging solution from a large NEP as part of a bigger deal, as it gives them ‘one backside to kick’. From a procurement perspective this is understandable. But now with the re-emergence of SIs into service providers, there will still be ‘one backside to kick’, with the SI taking the role of transformation partner. Difference between this and the NEPs approach is the solutions supplied to drive digital transformation are in many cases best in class from different vendors who are independent leaders in their fields.