Niall Norton, fact, fiction, MWC – and strangers dancing in the dark

Written by on February 23, 2017 in Billing & Payments, Opinion with 1 Comment

Niall NortonCatching up with Openet CEO, Niall Norton (NN) is always a thought provoking half hour, but it turned out we were six months late for this particular rendez-vous. However, rendez-vous we did, just ahead of the MWC in Barcelona. Our mission: to sort the fact from the hype.

DisruptiveViews (DV): Niall, good to talk to you. I was just glancing back at the interview we did last time – can you believe it was a year ago? Back then you said we would know that the investments you made back in 2012, in virtualisation, automation and other future looking technology had paid off if you were still here in a year’s time. Well, here we are.

NN: Good grief, I now feel even older than I did just now.

So, yes, I think they have paid off, and yes we are definitely still here. Openet has always been focused on middleware really, the space between the physical cable, wireless equipment and the back-office systems. We rolled out products that matched the needs of 2, 3 and 4G, but we always said that 5G was going to be the next real innovation, where the internet and service providers would come together. This would mean much faster roll out of products. It would also mean automation had to be part of an operators’ game plan. Nowadays, it is not going to work to wait months for the billing system to be ready for the next product launch, it has to be done in weeks, if not less. And, from their point of view, the efficiencies were as important as the cost savings.

As far as we were concerned, the next step after building on virtualised machines, was to look at the automation of the infrastructure. That was our bet. What we got wrong was the speed of roll out into production systems. We thought it would be six months earlier than it was.

The good news is that the automated age is upon us now, and it is certainly keeping us busy.

Actually our thesis, our strategy, has not changed that much over the past year, but our view of what the world will look like in a couple of years is in much higher definition. One thing we have changed in our business model is working on DevOps. We can now, literally, upgrade every two weeks. That is a big change, and we have been working with partners on making that happen. These micro releases have meant that we have basically kissed goodbye to major software releases.

As an example, we have been working with Bell Canada, who we think are incredibly innovative in this area. And we can take this approach right into their organisation.

DV: Is this speed of upgrade, of update, causing any issues that you weren’t expecting, or is it going according to plan?

NN: Actually it is pretty frictionless, although the sticking points are probably about mindset. Operators need to understand the changes that this approach brings. Strong leadership within operators is crucial here. And it really is a different approach. It is a big leap to go to Marketing and plan for a billing cycle, a billing upgrade, that is going to take six months and cost $10 million, and now you will be able to change in a few weeks, for, says $600,000. This is pretty dramatic, and it has excited a whole lot of people, and scared about as many.

DV: That is a huge change in just one year.

NN: It is, and it is a huge change in how operators see themselves and, as I say, it requires strong leadership to pull it off.

We have actually created a special business unit to deliver on the vision that is two years out. We have business people and CTO teams involved, and we are creating what is effectively an app store, where you can buy things from a catalogue. This is the result of this huge move to automation everywhere. What it actually means, which makes a lot of sense, is it creates a much simpler business outcome. And that must be good. It means faster time to revenue, faster time to profit, faster time to efficiency and so on.

DV: Niall, last year we asked you about the percentages of operators who were willing to change, to embrace virtualisation, automation and to change their business model. You said it was about 80/20, with the 20% willing to change. How much has that changed in the last year?

NN: It has changed quite a bit. I think that operators who have a strategy for change and are putting the strategy into place must be about 50% now. I certainly see the period when operators are playing with Open Source and so on, in the labs, is over.

Actually, one of the things we are seeing among big operators is that they are extracting charging, taking it out of the billing stack and making it into a stand-alone network function. In fact, three of our big wins in 2016 were with big operators who were looking to extract that charging capability. What is also interesting is the people that we are collaborating with. Gone are the times when you had a few vendors for specific things. Infrastructure, network, BSS and so on.

I think that the spend levels are going to increase. I think – sadly – that it won’t be a revolution, but it will definitely increase over the next couple of years, as operators dip their toe in the water, and then go mainstream. I think a lot of the planning is now complete. I also think we are well placed. We see there are some legacy vendors at one end of the spectrum and the sexy SDN/NFV vendors at the other. Then there are some in the middle who can do both. 2017 will be a good year, I think.

DV: Is this extraction of charging so that operators can charge on a ‘pay now’ basis, so the legacy systems do the subscription work, but the charging system can deal with customers buying products on top of that?

NN: It’s that and it’s also the real-time offer management capability, that allows customers to take advantage of instant offers. For instance, highly interactive offers from a catalogue. It means that the customer – and the network – can act and react in real-time. And the offers need to be able to change. So, today it might be free Facebook, next week something else – free Netflix movies for instance. So the network can finally react to the wiles of Marketing.

DV: Indeed, that is a big change, long sought after.

Another thing you said a year ago was that we would see the decimation of the equipment market, and I guess you were right about that.

NN: So, there has certainly been interesting changes, we hear that one big vendor is pretty much out of the service provider market, some have withdrawn certain products. Others are consolidating. Nokia has realigned its thinking, although we are still scratching our heads on the Comptel acquisition.

The cloud is now a very mature technology, which also changes the game. There is smarter software that can leverage the cloud emerging and we need to capitalise on that. The war is over, the cloud has won, and what you see now are the big players changing their offerings. So security and other things that provide that extra value will be where the action is. We need to make things bullet proof. There will be other changes, too, SIM card players will become competitors, as they go after the traditional territory of global companies like Jasper.

DV: So, with MWC coming up, I have to ask you what you expect to see there. Do you see a lot of hype or is this the year when we get a dose of common sense?

NN: Inevitably there are going to be some guys out there talking 5G but it is still miles away. Some people will be talking WiFi, and building that into cellular networks, which is very interesting technology – and actually very under-hyped. But I think there will be a lot of guys repositioning themselves, so probably more coffee than champagne this year. Security will be a big issue, and also subscriber management, as vendors continue to figure out how to make their customers more relevant to the end customer – more of an internet play. Seeing how the traditional Netcos are repositioning themselves, as a network operator and a content provider will be really interesting. There is a school of thought out there that says operators will find themselves in a race to buy media assets. There will certainly be a lot of internet vibes coming off a lot of people, and we will actually spend a lot of time talking to our partners as well as our customers at the show.

One of the things we will be talking about at MWC is a neat bit of technology that allows us to process a trillion transactions a day, with a very small virtualised footprint. And while it is a bit old school to beat our chests about shiny new technology advances, it is useful when you want to virtualise mediation and so on, you don’t want a data farm the size of Ireland to do it. One application for this scale is as a security tool. If you know how a device is meant to be performing, you can monitor it in real-time, which is good for business assurance as well.

One thing, one data point, I find fascinating is that Sky’s advertising machine has now hooked up with Experian, the credit scoring people. They are now serving up ads based on credit scores – in a positive way, though. I think we will look back in February 2018 and be able to review several of these. Right now, it is like strangers dancing in the dark, but it will be very interesting to watch. Tesco, for instance, could do the same thing with their database.

DV: Sadly, we are running out of time, but what do you think is going to be most over-hyped technology or trend this year?

NN: I guess it would have to be 5G. There seems to be very little coffee at the bottom of that cappuccino. It is almost desperation marketing, because 5G is still miles away. I think you will see some people trying to slow the market down, as well. I don’t think they will succeed by the way.

DV: Funnily enough we didn’t even mention 5G last year. I suppose a sobering thought is what happens to all the things that are waiting for 5G, augmented reality, virtual reality, driverless cars and the like. It is a big ask for investors to keep piling money in.

NN: The VR technology is almost there of course. It is a little like 3D cinema or TV. While I think there will be consumer take up, I think the real value will be in training and the enterprise applications. As for cars, we speak to car manufacturers, very smart people, and I think they are going to open up what is going on inside their cars before they try and make them do things that they are not ready to do – yet. Driver-less cars will come, but not for a while. Just looking outside my window here in Dublin, it is pouring it down with rain, mud everywhere. Now you get a driverless car covered in mud, and it will just stop working. There is some way to go.

What you will see is supply chain innovation where there is huge value in knowing your battery is going flat, tyre pressure is correct and everything is running at its optimum. Amongst other things, I think we will hear announcements from SAP around May time. I think it is in these kinds of applications where IoT will become a lot less exciting, but more useful and profitable. The real world.

DV: The real world, indeed. Excellent. Niall, thank you very much, and we will speak to you on 19th February 2018, if not before!

NN: Thank you.

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Alex Leslie

About the Author

About the Author:

Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews.

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  1. Bob says:

    Quality coffee metaphors – appropriate for a week of long days and nights…

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