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Nice to See at Least One CSP Taking My Advice

Mitch Wagner

It's startling when anybody actually listens to me when I tell them what to do. I'm not used to people listening to me; I'm a husband with several badly behaved pets. So I was quite surprised to read about what Colt is up to.

My colleague Jamie Davies weighs in with this provocative headline over at Telecoms.com: Diversification is a search for fools’ gold – Colt CEO.

When I saw that headline go by in my news feed this morning, I said, "Is this a new hiring policy at Colt? They're just going to staff the company with white guys who listen to country and western and eat a lot of mayonnaise?" But it turned out the article wasn't about diversity -- it was about diversification -- broadening business into multiple lines.

Colt Technology Services Group Ltd is looking to refocus on its core business: connectivity.

As I read this, I leapt to my feet, threw my arms up on the air and shouted, "Yes!", which startled the dog.

Diversification is a telecoms disease. It's particularly dangerous when telecoms try to become over-the-top (OTT) providers, competing with Netflix Inc. (Nasdaq: NFLX) and the ilk. OTT providers are in the business of delighting customers. Sadly, telecoms don't delight customers -- they historically have extremely low customer satisfaction scores.

You know what telecoms are great at? Reliable connectivity. They should just stick with that, and get better at it.

Watch me get ranty about it here:

And now, Colt is focusing on connectivity, as Davies describes in an interview with CEO Carl Grivner.

Contrast Colt with Verizon Communications Inc. (NYSE: VZ), which seems to be as distractible as an overcaffeinated kitten, buying AOL and Yahoo in a quixotic quest to get into the content business. The telecom giant is even rumored to be selling off its enterprise cloud unit -- getting out of a tough business serving enterprises, where Verizon has core competence, to move into a different tough business where it has no particular expertise at all. (See Verizon on Verge of Enterprise Cloud Sale – Source, Why IBM Is the Best Fit for Verizon's Enterprise Cloud Business, Verizon's AOL Buy Completes Its Content Story and Verizon Sports Big Plans for Yahoo.)

To be sure, keeping focus doesn't mean standing still. Carriers' enterprise customers have new requirements, with the transition to cloud and mobile. Carriers need to be ready with SD-WAN, security and other services to meet those needs.

I have to quibble with one point in Davies's excellent interview: Davies cites Microsoft Corp. (Nasdaq: MSFT) and Google (Nasdaq: GOOG) as two companies that have successfully diversified.

Microsoft has, indeed, done just that. But it was a struggle for them, and before they got it right they spent a decade wandering around the dark, stumbling over chairs and stepping barefoot on Lego pieces. Microsoft rolled out Big in an attempt to compete in the search engine market, and swallowed and choked on Nokia's handset business in one of several attempts to produce a competitive smartphone. (See Microsoft Restructures Amidst Nokia Flop.)

The Junk Drawer of Microsoft Failures includes the Zune, and the Kin -- a phone which Microsoft launched with much fanfare and then killed two months later when it thought no one was looking. (See LR Mobile's Black Friday Re-Gifting Guide.)

Want to know more about the cloud? Visit Light Reading Enterprise Cloud.

Sure, Microsoft is a great success story -- now. But that was not the case until Satya Nadella took the CEO's chair in 2014, and steered the battleship toward cloud.

As for Google: It does amazing things, but hasn't been able to turn any of them -- but one -- into business value. As one ex-executive told Bloomberg in December: "No one wants to face the reality that this is an advertising company with a bunch of hobbies." (Disagree? Let's discuss it on Google+. Or Buzz, Google Reader or Orkut.)

So kudos to Colt for deciding to stick with what it's good at. As Adam Robinson, a recent guest on the Tim Ferriss Show, said: "Geniuses have very limited toolsets -- they have a hammer, and their genius is in looking for nails."

— Mitch Wagner, Follow me on TwitterVisit my LinkedIn profile, Editor, Light Reading Enterprise Cloud

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