Jon Ross, COO of Openet on BSS, vendor lock in and the future
November 1, 2017 - Aleks
Written by Alex Leslie, October 25, 2017 in Billing & Payments
DisruptiveViews (DV) recently caught up with Openet’s new COO, Jon Ross (JR), to ask his opinion about the future of BSS and the challenges and opportunities ahead.
DV: Jon, thank you for taking the time to talk to us. You have been in your new role of COO at Openet for just a few weeks. Where were you before that?
JR: I have been with Openet for over five years actually, mainly in product development. Before that I was with Vodafone.
DV: Ah, so congratulations on your new role. And since you have obviously been around BSS for a while, an easy question to kick off. You may remember about, well, 15 years ago, the BSS market used to have over 100 vendors in it – 140 at one point – now there’s only a handful left, as well as the BSS offers from the large network vendors. Are BSS vendors screwed?
JR: First of all I think a small number of vendors is a bad thing. It leads to vendor lock in, expensive upgrades and change requests. Not healthy. And yes, BSS vendors will be screwed unless they start better serving operators. I’m not just talking about better functionality in systems, or new modules, I’m talking about a fundamental change in how BSS vendors do business. The days of over inflated software licence pricing and never ending service contracts need to be over. I laugh when I hear some of the large legacy vendors talking about agility and enabling customers to compete with Google and Amazon through more agile and leaner systems, and faster delivery models. Then they come out and boast about winning a BSS deal valued at hundreds of millions, or in a very well publicised case upgrading an operator’s group BSS stack for $1bn with a five year deal. How can you deliver a 5 year BSS project? This industry doesn’t know where it’s going to be in 5 months, never mind 5 years. There was also a case in Africa in 2016 – an operator with 800,000 customers paid $65M for a new billing system. That just doesn’t add up. This is at a time when operators are seeing their arpu falling through the floor and margins are tighter than ever before. It’s absolute nuts. Yet some of the BSS vendors are boasting about these deals.
DV: Are RFPs still alive?
JR: In pockets, yes. We still get them for things like PCRF implementations but there is a fundamental change. We are now helping our customers solve problems and discussing new revenue opportunities, not simply pitching our products.
DV: So what can be done, where are we heading?
JR: The BSS vendors – all of us – need to reset what they do. All vendors have to ask whose needs are they putting first? For many, it’s blatantly obvious that they’re not putting their customers first. Vendors in the past have been somewhat slow to take advantage of new tech advances as they could mess up existing and profitable business models. Kodak invented the digital camera after all. Supplying solutions that are hard and slow to change helps foster dependency on the vendor – which means greater service revenues. There’s also a change request culture endemic in the industry. The more change requests, the better, as it means more revenue. But it hardly creates the webscale type environment that operators want to operate in. BSS needs to enable operators to have a fail fast / learn fast culture and not be hindered when trying out new models or trying to launch new services, because it will take 12 months and a few million dollars to change the billing system.
There’s five main areas that vendors need to change.
The first is culture. We need to put customers first. We need to change the game from change request driven culture to “on time and on budget” one. Second, we need to change the commercial models. We must go from traditional vendor pricing to new webscale / internet style pricing models. Three, we need to re-examine deployment models. These need to change from huge transformation projects to adjunct, pragmatic and profitable projects. A variation on culture perhaps, but the fourth one is the adoption of a new approach to business models, particularly a fail fast / learn fast approach – the transition from telecoms economics to internet economics. Finally, speed. Our world needs to move from traditional network timelines to web timelines – and fast.
DV: That’s a large list – where would you start?
JR: The area that is easiest is making better use of new technologies to enable quick wins for operators. Several companies have announced microservices based platforms. This means that they’ve reduced the size of software modules and these can be plugged together to create smaller solutions that provide quick wins for customers. It’s like a Lego approach to developing software and providing solutions.
For example a tier 1 operator came to us and asked for a solution for shared data. Their incumbent mega vendor had given them a quote for a very expensive and long project to change the existing BSS to provide shared data. So they came to us, we supplied the components needed to provide shared data and integrated this solution into the existing BSS stack. This way the operator could roll out a shared data offer much quicker and at a fraction of the cost. This leads to another point and that’s openness. Operators have been decrying vendor lock in for years. But now they can do something about it. Vendors need to be much more open – not just in having APIs, but also culturally. Telcos are now being built on open eco-systems – not closed shops and vendors need to step up to the mark and be part of these open ecosystems.
DV: So, the BSS space is still alive and kicking – but needs to change?
JR: Absolutely. Telcos are changing and BSS need to be enable this change to happen and not hinder it for someone’s bonus or short term revenue gain. The vendors who get on board and drive this change will do well as they’re enabling their customers (the service providers) to succeed. The vendors who don’t change, or just pay lip service to it, via a joke of a press release will be screwed, and what’s more they’ll only have their own greed to blame. There are many opportunities for the vendors who are enabling change.
DV: And what do you see happening in the next few years with operators?
JR: I think there will be regional divergence. Operators in some regions seem intent on a race to the bottom, whereas in other regions operators are managing to differentiate on innovative services, not just just the biggest bucket at the lowest price. Of course, bundles will become bigger, more generous. There will be more innovative charging. 5G will enable new services that we can’t even imagine at the moment. It’s not just going to be about greater bandwidth and ultra low latencies, it’s going to be about the new services that will change the way we live our lives that 5G will enable. These new services will provide almost limitless opportunity for commercial innovation – if operators can respond to customer demand quickly enough. Otherwise OTT’s will continue to fill the void. I also think that partnering is here to stay, but again we will see innovative new models. There is an example in the Philippines where Google (not the operator) is offering customers free data access and incentives of additional free data for introducing more customers. I think we are looking at some interesting times.
DV: Thanks again, and good luck in your new role.
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