From cloud to managed service: The next MVNO evolution

This article first appeared on VanillaPlus.

Operating a mobile service is undoubtedly a great brand marketing strategy. It’s still prestigious, and the exposure is better than ever: not only is your logo on the bill, now it can be on a smartphone home-screen or app that is in your customers’ hands 200 times a day.

As the mobile ecosystem has become both more mature and yet also more fragmented, the proliferation of cloud services has helped brands running MVNOs (whether via an operator or off the shelf) to stick to what they do best. After all, if your core business is retail, why would you become an expert in telecoms when other category specialists can already do it?

But this is a train that will only keep accelerating.

Today’s mobile marketplace is fragmented, which reduces margins and increases the cost of sale. Customers demand more data services and more cutting edge technology – ironically in part because they are used to cloud services which are always-on and infinitely configurable. Think of 5G and IoT as the next waves of innovation, says Barry Dowd SVP of MDS Global Business Operations.

Either you can duck out (Sainsbury’s and Post Office services both shuttered in 2016) or you must be prepared to ride the wave.

Aside of MVNOs, even operators with their own infrastructure are finding it hard to stay competitive. When you’re managing legacy systems and bolting on new services, it becomes exponentially harder to maintain Tier 1 governance and service standards.

Maybe it’s time to stop juggling and – like the waves of OTT providers – admit that in mobile, nobody is going to do everything. Mobile is a partnership business, where flexibility and interoperability will be rewarded, both for MVNOs and operators.

Flexibility and interoperability are, of course, cornerstones of cloud services; and we can expect operators, OTTs, cloud and infrastructure providers and brands to become less distinguishable. Tomorrow’s MVNO won’t just ‘piggyback’ on an operator, they will pick from a range of interoperable services to create a compelling niche offering. And that’s a problem, because the other cornerstone of cloud is commoditisation.

Cloud IT services are off-the-shelf black boxes which provide neither alignment to, nor understanding of your business. Cloud IT SLAs are measured in processor cycles and uptime, not business outcomes. Eventually, those black boxes therefore cease to offer any sort of competitive advantage, because industry-standard SLAs and ‘me-too’ configurations will prevail.

The next generation of competitiveness must come from envisioning the cloud with a managed service layer that concerns itself with business functions rather than just off-the-shelf technology. It’s the difference between outsourcing (a platform) and a business (the platform plus assurance, strategy and commercials from a team of telco experts).

If that sounds a lot less like the turnkey simplicity of traditional cloud, that’s because it is: as with all technology revolutions, from the invention of the wheel to search keyword bidding, when parity is reached, competitiveness comes from radical change. Here are the hallmarks of the managed service approach:

  • Outsourcing to the cloud has always been associated with cutting costs or offloading technology challenges to a more expert partner. Think instead of a managed service as an opportunity to leverage infrastructure and expertise for market opportunity.
  • Unlike traditional cloud services, your managed service provider is not a commodity player. They should know and understand your business, end-to-end and contribute to your 12/24 month strategic horizon.
  • Devolving a function to your cloud platform (whether it is an IT or business function) should never mean sacrificing flexibility, responsiveness to the market or the ability to run your business optimally.

In a business which is endlessly convergent, you can benefit from the experience of previous projects in different sectors and on different platforms – right down to blocks of code (or indeed sound advice and lessons from past mistakes).

None of these are characteristics of a typical Cloud provider. In a managed service environment, the service provider becomes a business partner, not a technology partner. The development roadmap is shared and reporting comes with the sort of real-time granularity and transparency that you would expect from an in-house platform – all of which supports commercial decision-making. MVNOs exist to drive value to their brand sponsors. As technology becomes more commoditised yet harder to build from scratch, this business competence and agility will become the defining factor in delivering that value.

Barry Dowd is SVP of MDS Global Business Operations, responsible for the overall commercial service relationship with customers. He has gained over 25 years’ experience delivering customer care and leading customer experience teams in the telecommunications and IT service provision industries.

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