Orange And The Model For Next-Generation SPs

This week's SP-related news was pretty big: Orange Business Services announced their "Flexible 4 Business" cloud services, based on VMware / Cisco / EMC technologies.

The relationship was positioned as a "business alliance".  Some said that seemed a big vague and wishy-washy, but -- actually -- it's a very accurate and insightful characterization.

Because -- at the end of the day -- isn't that what it's all about?

I Like Working With Orange Business Services

Over the years, I've had more than a few opportunities to interact with the team at OBS.  They are wonderfully passionate and enthusiastic about their business opportunity.  When we get together, it's less about powerpoints and spreadsheets, and more about an honest dialog about how we see the industry evolving -- and the opportunities we should jointly pursue.

I also had a great opportunity to get in front of their CIO-level customers at an executive event coordinated around EMC World last spring.  They put me on a panel -- along with VMware and Cisco -- and they had us go back and forth with *their* customers unfiltered and unscripted.

That's pretty brave of them -- if you think about it -- but it all worked out wonderfully.  Even though I don't speak French :-)

Ingredients Of Success

When you look at what OBS brings to the table, it's a pretty compelling picture.

First, they've been very successful in delivering "IT as a service" using more traditional models: hosting, outsourcing, remote IT service delivery, etc.  Simply put, they know how to deliver IT services that people want -- now they're just building a better cloud-like mousetrap to do so.

Second, they've got a critical mass of really smart IT pros who can work directly with the customer -- whether on premise or off premise.   We're not talking about standardized take-it-or-leave-it services here.  We're talking about a customized set of services *and* smart people who can make it integrate and work with your existing environment.

Third, they've got global reach -- they have data center presence where their customers do business.  If you do business globally, you want an IT service provider that works the way you do.

Fourth, they've got the network *nailed* thanks to their heritage as part of Orange.  No network, no cloud.

But there's more to it than that ...

The Trusted Relationship

I didn't really understand why Orange was so successful until I met their customers at that EMC World event.  

It's simple -- their customers trust them.

All the marketing around cloud, cost savings, yadda yadda are completely meaningless unless there's a trust relationship between client and provider.  Despite conventional thinking, IT is not a commodity, and IT service delivery is certainly not a commodity.

Orange Business Services gets that at a fundamental level.   That's cool.

Organizing For Success

When I meet with a telco who's considering delivering IT as a service, I tend to put them in two buckets.

The first bucket is the predominant model: their rationale for getting into the IT as a service business is an adjunct to their network business -- make the network more valuable, drive more revenue without increasing cost of sales, etc.  It's all about the network, don't you know?

Some of these models work, many don't.

A smaller group realize that the IT-as-a-service business is distinctly different from selling network and communication services.  Different skills, different engagement model, etc.  

Sure, there are synergies with the network side of the business (e.g. Orange Business Services), but the goal is to create a successful business on its own, and *then* leverage any potential synergies.

In a nutshell, successful telco-does-ITaaS seems to be all about organizing for success: the creation of a business unit with a charter, model and a critical mass of resources to go get the job done, and build a business, rather than attempting to "leverage" the broader organization.

If anything else, this seems to be what Orange Business Services has done fundamentally right -- they've organized for success.

And we're bursting with pride that they've chosen to work with EMC (and VMware and Cisco) to build their foundation -- as business partners.

Comments

[Andre Jung]

Chuck,

by chance I had today the very first opportunity to read through your (various) blogs while I was doing some research on 'communication enabled business process'.
I stumbled upon your 2.0 blog and then followed the track until I read this post taking about the "Flexible 4 Business" approach, that we've kicked off a few months ago.
I am very suprised to read your evaluation, your perspective on what Orange is doing and your reflection on how our customers do see us.
For us - the people working for Orange it is quite difficult, to capture these external surveys. Not so unusual I think - if you sit inside a box it's hard to see the outer faces of the box.
It is refreshing, motivating and - again - surprising to read your evaluation.
I think we are kind of paranoid - we always tend to believe we could do things better, we always tend to believe that the other big guys do better than we do... and I wholeheartedly believe this is not a bad alignment - but: from time to time it is good to hear from a profound source that it is not all too bad what we are doing.
Thank you!

Andre Jung, Orange Business Services Germany

[Chuck Hollis]

Andre --

I agree, getting an outside perspective is difficult. At EMC, I'm continually talking to not only a wide array of enterprise IT organizations, but a correspondingly broad mix of IT service providers.

And, yes, I think what OBS is doing is fundamentally right -- and very differentiated in the market.

I'm a big fan indeed ...

-- Chuck