Remaking Telcos: Why CloudBlue Thinks It’s Time
- By Winston Thomas
- December 11, 2023
The telco industry is under pressure. After missing out on the cloud wave and seeing previous customers becoming hyperscaler partners, many see the need to become more than telco service providers.
"We don't want to be seen as someone who just provides the network; we need to move up the value chain," said YiLun Mao, managing director for APJ at CloudBlue, repeating the concerns he heard from telco customers.
Moving from a digital "plumber" to a digital enabler is difficult. It requires the telco to do some deep soul-searching to frame the value it wants to provide and map the journey forward.
CloudBlue, which sees its role as helping telcos monetize and manage their SaaS portfolios, is betting that telcos are finally ready for this shift.
Generation one vs. generation two
Telcos have been down this route before. When SaaS became a major market, many telcos established their marketplaces.
YiLun calls this Generation One. "It is the traditional multichannel approach. An example would be (Telcos) spinning up a cloud marketplace," said YiLun.
While establishing a catalog of offerings did help many telcos inch up the value chain, the biggest challenge was that customers had to adopt a new channel.
"Often what you're asking is for the customer to leave whatever channel they're familiar with. This creates procurement challenges where the sales conversion rate often drops off," said YiLun.
CloudBlue believes microservices are the better approach. Instead of forcing customers to leave their preferred channel, telcos can take a modular route.
"One (modular) component is catalog services where you can onboard (customers) who are exposed to any component in any channel they interact with," said YiLun.
He characterizes the creation of this modular catalog as the first step of Generation Two of telco services—essentially creating a gentle hook into your ecosystem without forcing the customer to choose an unfamiliar channel.
Step two of Generation Two occurs when telcos allow the same customers to continue procuring more services through the same channel without leaving it. This goes beyond the multichannel approach to one that is genuinely omnichannel.
"You obviously need the technology capabilities to enable this, and that's what we do," says YiLun.
CloudBlue goes further with a third step. YiLun notes that local and regional telcos may know their market and its pain points well but not the wide range of SaaS solutions in the marketplace and around the globe.
"They need a robust roadmap that is almost like a matchmaking service," says YiLun, who points to his company's go-to-market advisory services.
"It allows a telco to bring together services based on the customer's requirements to build a roadmap for releasing these services to the customers. And this requires code design," he adds.
CloudBlue is also looking to use AI to make the transition more effective. The company is on a nexus of data workflows from over 400 ISPs, its parent company, Ingram Micro, and its vast network of resellers.
"All the channels operate with sales information that forms our overall data lake. So once we have that information, it's about making it accessible. We can do machine learning on it. That's the journey we're taking," says YiLun.
Solving the human question
YiLun observed that many telcos want to shift from generation one to two quickly. But services and technologies are not enough.
You may have the right marketplace, partnership, and omnichannel infrastructure, but if your sales team still starts and ends each sales conversation in terms of network or broadband services, it won't be enough.
To change the conversation, you need two things to happen. One is to properly understand what services there are in the marketplace that can help a customer. This requires upskilling and retraining. Of course, the worry is that this training comes with a huge opportunity cost.
CloudBlue offers white-label acceleration service agents who "can talk in the local language and sit within a telco" but understand the new sales requirements.
"For example, when it comes to cybersecurity or AI, it's a very different sales cycle, sales mindset, and sales speed," said YiLun.
So, while the telco upskills and retrains its sales team, the acceleration services can jumpstart the sales conversion process. They can hand over and share their knowledge to the original salesforce at a certain point.
The second thing that needs to happen is a shift in the sales mindset away from simply selling cloud services. "In this day and age, anything can be turned into a subscription-based service. So telcos need to move away from associating digital services to just cloud," says YiLun.
Such a shift allows telcos to help companies drive innovation and explore new areas like insurance as a service. It also allows them to get deeper into the AI ecosystem and not be seen as a commoditized infrastructure solutions provider.
The case for grit
Telcos need to transform if they want to remain relevant. Yet, there are two areas where YiLun sees them often struggling.
The first is that they need to change their risk-averse mindset. YiLun notes that many telcos in the region take a wait-and-see approach. Often, they wait for other telcos to take this route before taking it themselves.
"That's because they think they can afford to (wait). But it also leaves you open for disruption. So, unless you disrupt yourself, someone will," says YiLun.
The second area is to understand why the sales conversions are not meeting expectations.
"Part of the reason is diluted user experience," says YiLun.
Yet, telcos often do not equate diluted user experience from creating a single procurement channel to their marketplace.
The conventional way of thinking is to kill the channel if it does not contribute to the expected bottom line.
"Yet, (the limited success) does tell you that there is customer demand, just that (the telco) was not able to service them well enough," says YiLun.
So, instead of killing the channel, YiLun is asking telcos to stick it out and invest in transitioning from Generation One to Generation Two.
It's a journey that CloudBlue is staking its future on.
Image credit: iStockphoto/YakubovAlim