Comments on: Telcos to deliver software as a service?

By: Alex

Alex — Wed, 23 May 2007 17:04:00 +0000

Speaking of great software for telcos, I have nothing but good things to say about TransNexus's
Least Cost Routing and VoIP OSS/BSS products.

By: Alex

Alex — Wed, 23 May 2007 16:57:00 +0000

I agree that integration with their access and transport offerings is a very important and value-added aspect of anything they could offer, whereas competing in the VAR space generally would offer no differentiators; in some ways, it might even be worse, since, as you pointed out, they don’t really have the infrastructure or dynamism to develop groundbreaking service expertise outside of their defining core.

On the other hand, RBOCs aside, a lot of CLECs are in the ISP and managed service provider business as well, both as a revenue-recovery strategy and to leverage the external self-concept of an “integrated” and “bundled” business communications “solution” provider.

But yes, there’s no particular reason to sign up for Salesforce or some CRM or whatever hosted by a telco just because it is, unless it projected visibility and manageability into the core product space. I don’t know that the article necessarily ruled that out, though.

By: Clint Ricker

Clint Ricker — Wed, 23 May 2007 15:05:00 +0000

In other words, what value do they bring over other VARS? Large customer base? Perhaps, although it remains to be seen that customers will look to telco’s as software vendors. Experience? The closest experience in the field is mobile phone software, which, I’d have to say, demonstrates that they have no understanding of how to market and sell subscription based software ($100 per year for horoscopes on demand?). The combination of the pipe? Perhaps, but this gets into dangerous territory.

The reality is that they would be better served by staying communication companies, and seeking to look for ways to add value to their communication offerings. If they want to sell software as a service, first provide visibility into the business usage portions. Then–and only then–start bundling in software that deals with that. Sell an integrated version of Salesforce or SugarCRM that automatically logs your calls to each of your clients. Sell a billing solution (although I would be VERY hesitant to buy any billing solution recommended by a telco–can you say kiss of death?) that automatically logs each phone calls to each client record for billing.

Converting your customers to new workforce models that are, in the end, antithical to your way of doing business just gets them halfway down the road to going somewhere else. Convert a customer to using Salesforce? Just gives them more incentive to use a communication provider that actually integrates with it.

By: Clint Ricker

Clint Ricker — Wed, 23 May 2007 14:54:00 +0000

Agreed that “software as a service” was meant as a VAR. What I was trying to get across (albeit perhaps a little unclearly) is that they would make a horrible VAR for this–the type of software they would be trying to sell is very antithical to their nature–small, direct, useful, and effective. They simply don’t have experience with this sort of software in any form whatsoever.

By: Alex

Alex — Wed, 23 May 2007 14:49:00 +0000

Thanks for the plug.

There are a few categories of software that telcos tend to invest heavily in–although not necessarily with a view to modernity. They are mostly in the area of settlement/billing/clearing, and OSS/BSS. Many of these also are extensions of switch management software or are heavily based around it.

But, yes, as far as any visibility into the goings-on of the network that provide business-level information and differentiators, virtually nothing apart from some of the reporting functionality in technical diagnostic / analysis packages, which is cursory and makes no attempt whatsoever at broad and purposeful synthesis.

BTW, I read the “telcos should sell software” idea to mean that telcos should behave more akin to VARs and bundle/host third-party applications that are not endogenously conceived, much in the way that Peter of RAD-Info continuously suggests ISPs do to develop their value-added “managed services.”