Software Defined Networking (SDN) stakes

As promised, in this post I will talk about the stakes of SDN paradigm in networking. The consequences of SDN would be similar to those of introducing abstraction layers into computing (virtualization, generic less expensive hardware, cloud computing, innovation, new pure software players...).

For service providers, the advantages are many:

• As switching hardware will be decoupled of control plane, hardware would become cheaper and interchangeable according to Moore's law. This forecasts reducing CAPEX of networks and dependence of  equipment vendors.
• Software orchestration in OSS forecasts reduction in network operation (OPEX) costs, and faster service implementation thus improving Time To Market for introducing new services.
• As networking becomes software oriented, innovation will happen at software speed!

Clients will also benefit from SDN paradigm according to what was mentioned previously, in terms of costs, flexibility and innovation. Clients will consume networks on demand through a real time digital experience. Check as an illustration the amazing functionalities enabled on the portal of the WAN solution proposed by NTT :

In this evolving ecosystem, the traditional vertical business model of equipment vendors will be highly impacted.  Decoupling hardware from software will let these vendors face low cost switching vendors from one side, and emerging players from software world. 

As previously said, SDN does not remove complexity, but only reorganize and separate problems through modular layered abstractions. It means that some issues should be considered such as interoperability, scalability, reliability... 

In Orange, SDN roadmap is resumed in 4 topics:

• Network virtualization in Orange datacenters
• IT driven networks for VPN to IaaS interconnection
• Deploy SDN PoPs in order to deliver on demand cloud-based networking services (connectivity, security, optimization...)
• Deploy switching-only CEs controlled by SDN PoPs

I am truly excited to witness the major shift in networking and be a part of it!

The importance of Application QoS in the transformation of telcos

Currently, I am working on a WAN optimization RFP. The goal is to optimize the performance of the customer's networked applications by deploying physical probes behind WAN accesses.
there are two main domains in WAN optimization:

• Application QoS: It's about monitoring and controlling the traffic of networked applications in order to satisfy the performance requirement of these applications according to their business importance.
• Application Acceleration & Optimization: Accelerating the performance of an application can be done on different levels:
• Network level: TCP optimization, byte caching and compression..
• Application level: there is a myriad of solutions on this level, starting by simple protocol spoofing (ex: CIFS) to advanced solutions like Content Delivery Networks. I'll dedicate a post to CDNs very soon.

Many constructors provide WAN optimization solutions: Riverbed, Ipanema, Cisco... each constructor is more specialized in a domain. below is an image provided by Ipanema on their optimization solution:

I think that these technologies will be more and more critical to business in the future. Nowdays, business rely totally on the Information System which is being moved to the cloud. It means that everything passes through the WAN access, and thus critical applications should be protected smartly.

Telecom service providers are integrating this approach more and more. The historical proposed solution is to upgrade the WAN access and increase bandwidth. This approach doesn't resolve the problem, it just  postpones it. On modern WAN networks, Class of Services is implemented, and it allows the prioritization of important traffic in case of network congestion. Its a good basic network level solution but it's very limited. It should be combined with previous solutions to have a serious application optimization.

I believe that telecom service providers should start thinking about integrating these solutions in their standard network products in order to accelerate their transformation into service providers and not only dumb bit pipes.
This approach will help them get to know more their customers by understanding their applications, and thus detecting big business opportunities.

Achraf Souk

Free Mobile: Simplicity laws applied to business

Today in France, everyone was waiting for the launch of the new low cost french mobile operator Free Mobile. Free was up to its promise of proposing unlimited mobile plans at half of the practiced prices. Two plans are proposed: 

• Unlimited plan for 20 euros / month: Unlimited calls in France, and to 40 international destinations, unlimited sms/mms, unlimited wifi, and 3G data
• Social plan for 2 euros / month: 60 min of voice communications and 60 SMS

I watched the morning launch presentation by the CEO Xavier Niel, and I would like to talk about two points on the positioning of Free Mobile.

The first point is about simplicity. In a previous post I wrote about the laws of simplicity (Reduce, Organize, Time..). For me, these laws applied by Free to their new mobile offer makes it a really beautiful piece of art.

1. The Reduce rule: reduce number of offers to only two, reduce offer complexity, reduce price, reduce control: no engagements, no usage restrictions, reduce services, reduce options, reduce contract clauses..
   - The image of the offer can't be clearer and simpler in the mind of the consumer, no need for catalogs, no need to think to choose the right offer.
   - The resulting chain value/cost structure of this simple offer should be also simple: simple sale process, no need for sales advisers, simple after sales services, simple information system, simple advertisements.. all of which are factors for lowering the costs of the offer! take for example their after sales services, they don't need to learn about sophisticated offers, so this service can be externalized easily, and if not, more client issues can be treated more rapidly thus needing less personnel.
2. The Organize rule: The offer is organized in a new innovative way: the mobile subscription and the financing of the mobile phone are separated. This way for example you pay 20 euros per month for your communications plan and 15 euros per month to pay your iPhone "loan". This way of organizing the offer gives the consumer the freedom of financing the mobile phone he wants in the way he wants. As a whole, the organisation of the offer is very simple. Speaking of iPhone, Apple has adopted the same simplicity in their offer: Only one phone, the iPhone!
3. The Time rule: The consumer needs less time to understand the offer, to choose his plan and to get the offer (online). We consumers, we love our time, and prefer not spending it on comparing offers, reading catalogs, talking with sales advisers..
   The time savings are also valid in all of the value chain processes of Free Mobile.

As a conclusion of this point, Free Mobile has made very quickly a simple and strong representation in the mobile brands evoked set.

The second point is about the aggressiveness of the offer presentation in the launch. This was for me the very negative point of the positioning of Free Mobile. In his presentation, the CEO was very aggressive and disrespectful toward other brands of mobile providers. For example he kept telling the audience that the current mobile operators were stealing money from consumers, he criticized the complexity of their offers, their prices and practices. He may be right, but I don't think that he should be doing that, but rather focus on the innovation and the advantages of his offer. As a consumer, I don't like the seller whose only arguments are the defaults of his rivals.

The launch of Free Mobile on the french mobile market will certainly disrupt it, which is a good thing. I am looking forward to see how free will deploy and develop their offer, market, and their mobile network, and also how rivals will respond.

Orange stressed

When I was searching for my first job, I always told this joke to my friends: people are suiciding in Orange to get out of it, and I am dying to get into it. Orange is the historical telco (France Telecom) in France who suffered in last years from a high number of suicides among its employees. Well it’s true, I never understood the deal till the day, in a bookstore, my eyes were caught by a black book with the Orange logo on it, and entitled: Orange Stressed.

The author of this book, Ivan du Roy, is a journalist in the weekly Témoignage chrétien and collaborator in the online magazine Basta!. In this book, Ivan du Roy gives us a historical glimpse of Orange and explains why we have suicides today in this great company. The chapters are highly backed with facts, especially from the Stress Observatory of France Telecom.

The story begins in the 1970s where France was way behind its neighbors in terms of telecommunications. To end this situation, the government of Gescard d'Estaing launched the Delta LP plan: Thousands of enthusiastic technicians were recruited by the PTT administration (Post, Telegraphs and Telecommunications) back then to modernize the network infrastructure of France.

In 1990 the transformation of the PTT into an international corporate began. The PTT was divided into two public companies, La Poste and France Telecom. In 1996, France Telecom was privatized into a corporation. One year later, 21% of its capital was sold, and its action was quoted in the stock market. Since that year, and till the day, this percentage kept on increasing. So why was France Telecom privatized?

Many factors enforced this direction. First, there was the Milton Friedman's neoliberalism influence with Ronald Reagan in the USA and Margaret Thatcher in the UK: in these countries, telcos were already privatized. Second, the European Commission, in order to Europeanize the telecom services in Europe, chose the deregulation of this sector. A green book was published on this subject. This decision was highly influenced by some European industrial lobbies (e.g. European Round Table of Industrialists), and a big think-tanker and business man played a key role in this influence: the Belgian Etienne Davignon. Finally, and ironically, it was the left wing in France with Michel Rocard that opened the Pandora box by transforming the PTT administration into a public company. It was their reaction to face the difficult economical situation at the moment. To pass their solution, they had an undeclared agreement with the second most powerful syndicate CFDT behind CGT who knew about it too late. The left wing and the CFDT paid the price of their decisions each one in its upcoming elections. For Ivan du Roy, this direction was a pure political choice, because the announced needs for privatization (modernization and unification of networks, technological revolution, cheaper services...) were already satisfied with the PTT administration.

In 1998, The European telecommunications industry was deregulated for competition. New competitors entered the French markets (e.g. SFR & Bouygues). The strategic response of France Telecom to this deregulation was the expansion in international markets, to catch up the market shares it has lost in France. The CEO of France Telecom Michel Bon led this strategy by a big number of fusions, acquisitions, OPA operations in Europe and in Africa (especially the purchase the UK mobile operator Orange which became the official trademark of France Telecom). Huge sums of money were also paid to buy UMTS licenses in different countries. The French state was blinded by the billions of Euros income due to the sale of actions and never controlled these operations as the main shareholder. Unfortunately, in the summer of 2000, the speculative internet bubble has exploded, and all of risky operations of France Telecom caused it huge amounts of losses and France Telecom was the most indebted company in the world, with 70 billion Euros of debt.

How to get rid of 70 billion of junk bonds? France Telecom will witness the era of cost killers. The new CEO Thierry Breton comes to France Telecom with an army of well paid cost killers. They put in place the NeXT plan to reduce the number of employees by 22000 in three years. Employees were pushed in different ways to leave the company. Cost killing rhymes with work intensification, reorganizations (delocalization…) and shift in professions to ones generating more cash flow like commercial professions. These huge changes caused a cultural choc to the employees. First, these changes question their history and values, in other words they would feel that everything they did before was useless. A typical employee in France Telecom is a technician with the public service culture deeply rooted in him. In a short time, we put him in call center, without convenient training, and force him to give the minimum time to clients, which is completely against his old public service culture. This brutal change caused major psychological problems which are highly reflected on the health of the employee and his private life, leading him to suicide in extreme conditions. Changes came from the top of the hierarchy without being well understood by the employees and the management of these changes seems to have been a big failure.

The alerts are in red for France Telecom: precarity of work, ratio of absenteeism and number of suicide attempts. The direction seemed to be in denial at first. In response to the suicide attempts, the company created cells to accompany persons in difficulty, but never questioned the organization itself. It didn’t consider the roots of the problem.

France Telecom is gradually waking up from this long sleep of denial; there are more and more forces from the inside that are trying to stop the drift of the financial logics from the reality of work.

If you are interested by the subject of stress in work due to modern organization of work, I strongly recommend you to watch the two part French documentary “La mise a mort au travail”. In one of the parts a small debate is held with Stephane Richard, the current CEO of France Telecom.

Achraf

Update: For french speaking readers, there is a recent interesting documentary on the subject by France 5. It shows what have been done in France Telecom since the arrival of the new CEO Stephane Richard who promised to solve these cumulated social  problems after admitting their existance. You can watch it on YouTube:

Alternative Marketing examples in Telecom industry

Although it's not easy to find a clear definition of alternative marketing, most sources put in this category of marketing all the techniques that doesn't come from traditional, intrusive and boring marketing.

The main idea of alternative marketing is advertising through extremely innovative and attractive concepts, that seduce the consumer and push him to come himself to the brand asking for information, even to spread the word and create a buzz about it.

Alternative marketing include many branches such as buzz marketing, street marketing, guerrilla marketing, ambush marketing, undercover marketing...

I am not intending to analyze alternative marketing, i will just give real examples in the telecom industry.

The first exemple is the usage of the roman telco Romtelecom to advertise for his VOD offer and the for the opening of a new store (august 2010):

Sony Ericsson advertises for his new mobile Xperia X10 Mini using a Mini Parade concept (july 2010):

also to announce the roll out of their mobiles Aino and Satio with their Hoppers invasion (november 2009):

Blackberry captures the passengers' attention in Paris through its biggest "Blackberry device", on which they displayed messages sent by the passengers through facebook and Blackberry messenger (may 2010):

And finally Nokia, to promote their Ovi navigation application, they installed a huge crane in London carrying a giant signpost in the form of an arrow. The passengers send an sms to the signpost including a destination, so the arrow changes its orientation into the direction of the destination while displaying the message and the estimated distance (january 2010):

I will probably try to analyze more deeply alternative marketing in one of my upcoming posts.

Achraf

source: http://www.marketing-alternatif.com/