Orange Embraces the Partner Paradox
Orange has learned that when it comes to machine-to-machine (M2M) communications, turning former clients into partners is the only way to go from being a network provider to a services provider.
Speaking at a press panel during the recent Management World industry event in Nice, Marilyn Arndt, M2M senior standardization manager at the operator (formerly known as France Telecom), said the carrier's goal of going from a network provider to a network-plus-integrated services provider and then to solely a services provider, has led it to be "more and more involved in intelligent partnerships with its clients."
For example, in its bid to seed homes with smart meters, it has found partners in utilities.
"In the end, the utility becomes a client with service providing," Arndt said. "But, if we want that to happen, we have to partner and understand [the market] together first."
So, why are companies such as utilities willing to team up with Orange, knowing that the operator's end goal is to sell tits own services? Arndt said it's all about cost. While utilities originally told Orange they didn't need its help because they had their own private networks, she said things are changing because of cost concerns. Utilities companies are now among those driving the most demand for Orange's M2M-related services.
The services the operator currently sells them are confined to its network, Arndt said, but noted that's changing due to the needs of business units everywhere else. As such, Orange is taking a horizontal approach and extending its Business Services division to not only include the mobile network, but other forms of connectivity, such as fixed broadband.
"We can't do a lot separately in M2M," she said. "We have to reorganize the entities for our M2M objectives."
Smart homes are currently the biggest opportunity Orange is pursuing, but "big" is not defined by the revenues it generates. Arndt said that enterprise activity will probably bring in more money, but smart home activity boosts Orange's image with consumers. Here, again, partners are key.
"We need good cooperation with brands and device manufacturers to have the complete value chain," she said. "The most difficult thing is to deliver an end-to-end set of services without having the knowledge of all the parts. We can't do things alone."
— Sarah Reedy, Senior Editor, Light Reading