The telecom infrastructure landscape, like just about every other industry you can think of, is facing massive disruption. The pace of change across virtually all the markets has never been faster in fact. Hotels are now competing with AirBnB, Uber is a new taxi alternative, and singles bars most recently have to compete with Tinder.
Telecom operators face enormous decisions about their future. On the one hand, to compete with OTT providers they need to become far more nimble and have lower expenses. To do this they can become software telcos, utilizing SDN and NFV to run their networks on off-the-shelf servers. In addition, they can resell cloud services from others.
If this wasn’t enough to contend with, they have to deal with companies like Apple and Google that are functioning as competitors by giving away alternatives to SMS and traditional telephone calls with services like FaceTime (News - Alert) and Google Voice. VoIP is a known threat, but WebRTC is new and could be even more disruptive.
In a recent conversation with David Walsh, CEO of GENBAND (News - Alert), at the Perspectives 14 conference, I had a chance to get the story on why GENBAND thinks it will be one of the few to successfully navigate these changing waters.
The number of companies GENBAND has acquired over the years has been substantial, and many of these have helped position the company very well as the industry goes through transformation.
GENBAND is transforming itself from an equipment company to one that provides real-time communications solutions, software, service, and a platform that is the center of an ecosystem.
This is where the challenge for traditional companies comes into play. If an equipment provider decides to transition to become a provider of cloud services, the revenue model changes dramatically, as you no longer get paid immediately for your product by customers. Instead, you get paid more, like a lease than a purchase. In other words, in an environment where payments are decreasing, these companies have to ramp up investment to be able to provide new services. They have to make acquisitions, build data centers, and develop administration and other software.
Walsh refers to this as the fish problem – basically two lines inverted on a horizontal axis where investment ramps considerably as profits inversely decrease. At a mirrored point around a vertical axis, investment starts to decrease as profit starts to increase, and more and more customers start to pay monthly. At some point in the future there is a breakeven point where profit starts to be generated in excess of investment.
GENBAND has already made these investments, notes Walsh, and is way ahead of the game. At the same time, he says, some competitors are challenged because they don’t already make profit. GENBAND has no debt, he says, and he emphasizes the company will stay profitable to remain a solid company on which its customers can rely.
fring (News - Alert), for example, is now part of the company’s arsenal of products and is white labeled for carriers, who as a result can provide a variety of services such as reduced-rate calling when a person leaves their home calling area.
This transformation has been pivotal for the company – enabling GENBAND to get deeper into its customers’ wallets and share in their success. Historically, Walsh explains, the company would ship a product and install it, but it was tough to understand how a customer would benefit from using it. In addition, it wasn’t able to ascertain what was important or required.
Now, however, with its cloud-based services, GENBAND is able to immediately see what its customers and their customers are doing, what features and capabilities are being accessed most often, and so forth. Moreover, the company’s Kandy offering, a bundling of WebRTC, cloud services, and programming tools, is an entrepreneurial division within the company that understands the need to get customers to use the new services it provides.
This is where it really gets interesting. Walsh explains that makes it easy for customers to have access to new services but enables clients to pay only when they benefit.
“This is completely different than the telecom equipment model for 50 years,” says Walsh. “This is a completely different way of running the business.”
A large CRM company is already a customer, using GENBAND to enable call center functionality with WebRTC, allowing customers to click on a web link to communicate with agents via IM, voice, or video. The CRM company’s field service software is also seeing WebRTC integration. The basic field service software provides a database repository for all actions taken on a particular item – in this case, the customer is a piece of machinery. A full record of maintenance, including who and what was done to an item, is kept on file, with additional help added through a 3D CAD graphic tool to illustrate how a particular piece or part needs to be replaced.
In case of difficulties, a technician can use WebRTC from the service page to call the dispatch office for assistance, opening up a video chat to provide a direct illustration of a problem. If necessary, subject matter experts can be brought into the discussion for consultation. Think of it as Google (News - Alert) Hangouts for fixing things.
Walsh emphasizes that customers can still purchase products if they so choose, but he does believe it will become less attractive than the alternative over time. In addition, using the cloud model, customers can launch complete, massively scalable services in 90 days – something that used to take a year or longer.
Walsh adds that GENBAND is betting on business voice services and, more specifically, on real-time collaboration that is integrated into applications where contextual communications takes over as the driver for real-time communications and the market. In fact, real-time communications is where GENBAND is planning on being the market leader. It believes the really large competitors such as Cisco (News - Alert), Ericsson, and Huawei are too big to worry about this market given they have bigger markets to contend with, such as wireless infrastructure, access, and optical.
Another interesting point Walsh made is that GENBAND bonuses are now tied to customer satisfaction, and his past experience working in the field of Wall Street technology showed him the telecom industry has a long way to go to improve from a quality of service standpoint, and GENBAND wants to lead the way to getting there.
GENBAND has positioned itself nicely at the intersection of key trends – such as the cloud, customer experience, software-based networking, virtualization, and WebRTC. It’s a smart strategy and can be summed up by saying the company will tie its success into selling outcomes. If customers are successful, GENBAND will share in their success. This sounds like the ultimate win-win for a supplier in any industry.