Telcos must leverage cloud capabilities

Redknee CEO Lucas Skoczkowski explains how the cloud allows service providers to address the full spectrum of the long tail of customers
Tony Poulos: The recent acquisition of NSN's BSS business has brought you into the spotlight in a lot of areas. How is it going and how is the acquisition being phased out now?
Skoczkowski: We are off to a great start. The senior leadership team is in place, we’ve got the key indicators for performance in place, the initial integration of our product is complete, and we are doing demonstrations of the Redknee CRM integrated with unified [email protected] product.
I would say the feedback from customers has been excellent -- quite a few large customers have voted with their purchase orders, which is a great vote of confidence. And all our new customers have really engaged us now that we are larger to see how we can work with them on a broader portfolio and meet their business needs. So I am actually very happy and very proud of the team and what they were able to accomplish so far.
I’m hearing also that you are moving into cloud-based solutions. How is that going to work out and what do you have in mind?
I think cloud is critical for customer success. My belief is that telecoms is already a provider of cloud services. They need to start leveraging their own cloud capabilities for their own business. So I believe that this can accomplish a couple things. For tier 1s, where they don't necessarily want to do a complete overhaul of existing systems but maybe bring in a system just for LTE, they can leverage a cloud-based solution. I think that reduces risk and allows the business to experiment to get it right and to really have access to best-of-breed technologies.
For small operators, I think it is the most economical way to go to leverage multi-tenant systems, to leverage innovation, and drive speed to market. I also believe what you really see underpinning the cloud is productization of the offering. And BSS has been the big path toward productization. We're definitely in the camp that configurable products is a way to go. I know there are a lot of service organizations that prefer that path; my view is that we want to create a leverage for our customers for the product, and cloud offers that in the most economical way.
What do you think in the core benefit of billing via the cloud apart from the cost savings you talked about and personalization?
I think of a couple of things. When I talk about monetization, I'm referring to subscriber management -- billing is a word that I think is too narrow, so subscribe management is about being able to touch all the different points where the subscriber might be interacting, from social media, all the way to the physical point of sale. I think that cloud helps encompass that in a much more economical way.
No 2, I think it’s about real-time analytics. A lot of it has to do with charging, but how we combine it and link it to other stakeholders in the value chain becomes very powerful. And then obviously being able to have up-to-date capabilities on an on-going basis, seamless upgradeability, which has been a challenge in our industry. A lot of customers have been forced to take upgrades every two years, in cloud it's ongoing. If I look at the enterprise side, paved the way for the last ten years to demonstrate how it can be done without having software in-house. We want the same thing for our service providers in the mobile space.
Is it the same sort of model like a pay-as-you-grow model?
Exactly. So the idea is per subscriber, per month, so as customers grow we become part of the success. But we also become a stakeholder, who is vested in the customer's success. We want to bring together promotions and ideas and capabilities to enable customers to retain subscribers, increase their usage and broaden the services so they can start consuming. And obviously we are very keen on making sure the customers lower the cost of acquisitions, so they can in turn invest that in their business.
What is your advice for CSPs that are looking at cloud perhaps for their billing systems?
From my perspective, it's really about identifying what you're trying to achieve in the business, and to get buy-in, because that becomes quite important. Usually that is driven by business teams. And to actually define a segment and go for it.
I think this industry, especially the mobile industry, has been done by pioneers. And now that it has grown quite big, some of the pioneering spirit has been lost and sometimes we are almost scared to try things. In my view, cloud allows you to experiment and allows you to sandbox that in a much better way --  look at the segment, try to iterate and make your business successful.
What type of service provider do you really think would be looking at cloud-based services?
In North America we’ve got a lot of tier 1s that are using the largest OSS service provider in the market, and now they are using our capabilities for both post-paid and prepaid to really address the agile side of the subscriber base. So we have a segment, which we are pursuing with them, that is very exiting.
And obviously we have MVNOs and channel partners, either stores or brands, that are well-known in certain segments. There are also multinationals that want to create their brand across multiple markets where they don’t operate actual networks. So we have seen really large customers, running multimillion subscriber networks, as well as the 50,000- to 100,000-subscriber networks who both want to participate in this capability. Cloud really allows you to address the full spectrum of the long tail of customers, whereas the on-premise systems are really reserved for tier 1s and tiers 2s.