& cplSiteName &

What Carriers Can Learn From Shipping

Mitch Wagner
6/17/2014
50%
50%

CHICAGO -- Light Reading's Big Telecom Event 2014 -- Carriers need to understand they're in the service delivery business, not just the network operations business, Heavy Reading Chief Analyst Graham Finnie said here on Tuesday.

Finnie compared the Internet and information networks today to the shipping industry in the 20th century. Shipping and trucking entrepreneur Malcolm McLean pioneered the use of the shipping container, thereby revolutionizing supply chains by automating transportation.

"Malcolm McLean's fundamental insight, commonplace today but radical in the 1950s, was that the shipping industry's business was really cargo, not sailing ships," Finnie said, quoting from the book, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.

Malcolm McLean at Port Newark, 1957. Source: russavia
Malcolm McLean at Port Newark, 1957. Source: russavia

Similarly, today's carriers need to think of themselves as being in the business of delivering services to end-users, not operating networks, Finnie said.

Applying that insight, there should be no distinction between over-the-top services and telco services, Finnie said.

Fortunately, the industry is shifting. More and more decisions are being re-cast as business decisions for the purpose of delivering services that can be monetized, rather than running efficient networks (though those goals are not mutually exclusive). But there's still a long way to go, Finnie said.

Nearly half -- 46% -- of network operators say failure to adapt to new business and market conditions is the biggest problem they now face regarding their long-term business outlook, according to a Heavy Reading survey ahead of BTE. Only 9.5% identified failure to cope with or take advantage of technology changes as the biggest problem.

Heavy Reading's Graham Finnie brings his shipping news to BTE.
Heavy Reading's Graham Finnie brings his shipping news to BTE.

"So it's really about business as the issue, rather than the underlying technology," Finnie said.

As an example of the diminishing importance of technology compared with business, survey respondents said SDN and NFV will not have a transformative effect on network operators in terms of efficiency and profitability. Some 51% said the effect would be slightly positive. "Not exactly a ringing endorsement," Finnie quipped. About 30% said the technologies would have no impact or a negative impact. Only 22% said they would have a very positive impact.

"Delivering services that people actually want and are willing to pay for is really at the heart of the issue here," Finnie said.

We've turned the corner, and carriers are finally looking at things from more of a business and services point of view rather than simply a technology point of view, Finnie said. As an example, carriers are rolling out new service plans based on policy management, such as shared usage, application specific packages, packages supporting gaming, add-ons like particular services for Spotify, and sponsored data.

Carriers are more willing to work with third-party OTT providers, particularly in emerging markets, too. That's particularly encouraging because OTT providers deliver the services and value to end-users. And, Finnie said, the gap is diminishing inside telcos between network, IT, and product marketing teams.

"I'm far from downplaying technology. Technology is absolutely critical, but it has to be properly applied, with services in mind," he said. More importantly, technology has to be at the service of improving customer experience.

The Internet "was founded on delivering services. The technology as really incidental," Finnie said. "Tim Berners-Lee certainly didn't want to be known as the man who invented HyperText Transfer Protocol. He wanted to be known as a man who created a new means of collaborative working and information exchange," Finnie said.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(14)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
Infostack
50%
50%
Infostack,
User Rank: Moderator
6/20/2014 | 6:15:41 AM
Re: Shipping Whatever
Steve, you are right on.  The failure of the balkanized edge providers is that they have not been able to come up with new service delivery platforms that embraced the fundamentals of the new digital technology era, namely moore's, metcalfe's and zipfs laws.

As balkanized, edge access providers, ISPs and MNOs are incapable of waking up every day and asking,  "how do we provide more for less to more people across more contexts?"  Principally, that's because they have a narrow and uneven view of demand, as opposed to those at the core (OTT).  Netflix has a tremendous advantage in pricing and service delivery of VoD from its vantage point.  Today they are constrained only by their flat-rate pricing model, but have you seen that it costs them only 4 cents to store and deliver an hour of video on average?  And that number is declining by 30% annually.

Until the edge access providers restructure and get out from under their siege mentality they are doomed.  They are, quite literally, the city states and small kingdoms who hid in their fortified castles in the early to mid part of the last millenium and failed to adapt to the cannon and understand that power lay in mobile armies with great supply chains.

 
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
6/18/2014 | 10:13:57 PM
Re: Getting there
That would be great, I think the best way would be to reach me on twitter @danablouin 
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
6/18/2014 | 9:46:30 PM
Re: Getting there
mainly because the carrier management focus is telco and they ignore opportunities that are not telco. I am drafting a more detailed blog post and if you give me your details, i'll send you the link when I post it.
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
6/18/2014 | 9:38:01 PM
Re: Getting there
So I have to ask now, did they ignor the market because they just didnt care or they just didnt care to see the opportunity? 
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
6/18/2014 | 7:54:25 PM
Re: Getting there
The problem is less the time rather than the approach. Simply copying anothe rappproach will not work, but bringing a new dynamic approach would work well.

I was doing a consulting gig for a fraud company and every client required the same set of data which is only even possible from the carriers, but the carriers simply ignore the market.
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
6/18/2014 | 7:47:45 PM
Re: Getting there
I dont know, they always seem to catch up about 5 years or more behind everyone else, and many times that is just too late. you would be talking about a major shift for that to change. 
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
6/18/2014 | 7:42:59 PM
Re: Getting there
If carriers ever get their act together, I believe that its never too late as they bring some real benefits to the table that their competitors simply can't.
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
6/18/2014 | 7:36:50 PM
Re: Getting there
no doubt its not something we can hold our breath for, carriers are not quick and nimble, the are large, goofy and move slow. lets not wait around, but it will happen, just when its too late. 
MordyK
50%
50%
MordyK,
User Rank: Light Sabre
6/18/2014 | 7:34:02 PM
Re: Getting there
That's been my argument since somewhere around 2003, so while I welcome it I no longer hold my breath for it :)
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
6/18/2014 | 6:22:50 PM
Re: Getting there
As networks begin to see their network as the service that may very well change. 
Page 1 / 2   >   >>
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
,
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
Cisco Throws 5,500 Overboard on Cruise to Richer Waters
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/17/2016
VoLTE Can Drive 4G Small Cells Adoption
Ravi Narayanan, Senior Analyst – Cloud & Next Generation Mobile Networks, Heavy Reading, 8/18/2016
Rocket Fiber Lights Up Detroit With Gigabit
Elizabeth Miller Coyne, Managing Editor, 8/22/2016
Rumors of a Sprint/T-Mobile Merger Again
Dan Jones, Mobile Editor, 8/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.