Unzipping the Digital World at Management World
By Jessica Zimet
"The future is a place where our children work for companies that don’t yet exist, which create products that don’t exist, that solve problems that don’t yet exist." TM Forum Management World opened with Keith Willetts, TM Forum chairman, and his view on how the communications industry can best weather what he calls the "digital tornado." As digital services, data, and connectivity are all expanding, operator relationships with customers are actually growing weaker. Consumers buy devices directly from retailers and install apps that not only circumvent operator services, but revolutionize the way consumers communicate and interact.
So innovation is coming mostly from third parties, not the operators. What’s left is the infrastructure business, which will likely mean even more consolidation in our industry, predicts Willetts. Communications service providers can cash in on new businesses, but only if they don’t miss the boat as they did with consumer apps. He suggests some places to watch are sector-based services and M2M. He warns service providers not to wait. In the digital land-grab, if you fail, fail early, fail fast, learn from it and move on. Historically, the telecommunications industry has been conservative and risk-averse, but we must work to embrace a more innovation-centric work environment and culture in order to adapt and thrive.
Not everyone on the panel of financial and industry analysts that followed, however, agreed with Willetts. Graham Finnie from Heavy Reading said that one of the hardest things for service providers to determine is when the sky is actually falling (as it has been reportedly doing for the past 20 years or so). He pointed to the network, the greatest asset of the service providers, as valuable and defensible. But Hannes Witting of JP Morgan declared that the financial-services market sees the telecommunications firms of Europe in a state of managed decline. Willetts suggested we’re likely to see spinouts and breakouts as ways to innovation, with Telefónica Digital held up as an example. And that companies that are “unwilling to eat their own babies," such as Kodak’s reticence to enter the digital photography space and cannibalize its own market, can ultimately mean the death of your business. Witting suggested that the finance industry supports investments aimed at growth, although there were grumblings from the telecom crowd that their focus seems to be on the short term – even Phil Jordan of Telefónica later said in the CIO panel that they’re already being grilled on results from their new digital venture, only seven months old. Parting words? “Figure out what business you’re in before it’s too late. Do what you do, do it best, and don't do anything else."
More on the digital world is in Willetts' new book which launched at the show: Unzipping the Digital World – How to Thrive and Survive.
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