Below a short summary of BT’s strategy. Thinks I like are in bold.
We’ve been thinking a lot recently about BT’s product strategy (don’t ask why, we won’t tell!). Ben Verwaayen, BT’s boss, has a vision of BT’s business model supporting global, open and real-time services, for which he got some stick in the trade press.
Let’s re-interpret those words, but with the Telco 2.0 spin (and penchant for puns):
Glocal, clopen and hard-time.
What BT is trying to do is establish some guidelines/principles on how products and services access the development resources of BT. It’s the gatekeeper to the product and project pipeline who needs to be testing each proposal to spend money against:
- Is it protecting and extending the existing business lines. (The first Telco 2.0 strategy.)
- Is it creating a open platform (Second Telco 2.0 strategy) for global, real-time services. (More below.)
The pipe (third strategy) is assumed, and given the Chinese walls and equivalence rules, Openreach and access infrastructure is a separate world we’re not considering here.
We think the global-open-real time mantra is heading the right way, but needs some refinement.
- “Glocal” steals from destined-for-big-things danah boyd the idea of glocalisation. Every service is global, but the successful ones can adapt to local (and personal) needs. The Firefox browser might be a good example: one base product, an unbounded number of combinations of extensions and customisations within that framework. BT’s products need to be adaptable by third parties to niche/local markets and needs — “retail and OEM”.
- “Clopen” means we’re looking for the right balance between openness to any partner and having some kind of tolled access to a scarce and valuable economic resource (the closed side). i-mode allowed anyone to become a partner, but you could only bill to a DoCoMo customer’s invoice and only for services that generated revenue-earning data traffic.
- “Hard time” doesn’t mean telecom feels like a prison sentence, even if it feels like it to investors. Rather, you’re looking for applications that the Internet sometimes may have a hard time delivering. One such example is demanding real-time applications where you can control QoS etc.; but it’s not the only one. Another example could be heavyweight video content that works best with a local content delivery cache. We’ve come up with a long list of all the ways the IP/Internet abstraction breaks down (just don’t expect us to give it all away for free!). These gaps are profit opportunities.
What’s missing from most operators is a rigorous way of managing the product and project pipeline that aligns resources to long-term strategy. Too often it’s predicted (“fictitious”) ROI that drives investment decisions. But if that means the doughnut shop over the road is making higher returns on invested capital and better margins, you’re ordering flour and jam instead of mobile handsets and base stations. Even worse, those product ROI figures are based on all kinds of cost accounting tricks. Yes, you need to keep one eye on the cash flow. But the other needs to be on the road to glocal, clopen and hard-time services.