Jarich: What's with all the new demo and experience centers?

Peter JarichSeveral weeks back, my team and I went to visit a few customers and prospects in northern Europe. Among the stops were the new Ericsson Studio (officially opened on Aug. 31) and NSN's recently launched (Oct. 6) Experience Center in Finland. 

That both vendors were proud parents of relatively new demonstration showcases struck us all as more than coincidence. That we were queried by various people--during and after the trip--on how these centers were designed, what they looked like and what we thought about them, made it clear that we were talking about more than just a permanent collection of demonstrations and technology displays.  Combined with the launch of new "innovation centers" at various operators around the globe, we'd obviously moved past a simple extension of trade show exhibits and presentations to a level of polish and investment that pointed to something strategic.

To be clear, none of this is completely new. Vendors have always rolled out spiffy solution examples at their HQs and regional offices. Often, these are impressive set-ups, replete with partner products, sublime interior design, and pre-commercial solution innovation (R&D) that all speak to operator requirements. And, yes, this has sometimes taken place in tandem with an important operator in order to help the customer (prospect?) understand the technologies available to them and maybe even develop some new solutions. 

Yet, if this activity looks to be on an upswing--moving from the realm of mere marketing to something more strategic--the question remains. Why?

  • Differentiation.  Consider the wireless infrastructure market for a moment. Just a few years back, the industry was populated by no less than ten major network vendors with end-to-end or RAN solutions. Today, that figure is six--set to be five when NSN acquires Motorola's wireless infrastructure business. Consumer protection groups might argue that greater supplier concentration hurts competition. In the networks space, however, consolidation has driven competition if only because all of these larger, consolidated vendors deliver similar end-to-end solutions with often dubious differentiation. The result, then, is that highlighting unique, novel, and/or useful R&D has become a critical part of everyday marketing agendas, not just through trade shows and the occasional announcement.
  • Operator R&D.  Traditionally, operators have built up extensive in-house R&D capabilities; just like vendors, they needed to differentiate their own offerings more than they could with the off-the-shelf technologies and network components available to them. Over time, these R&D efforts have shrunk, though not disappeared, as bottom-line pressures have grown and service marketing (including pricing and packaging) has taken precedence over network capabilities (including coverage and quality) as a differentiator in some markets. Ultimately, this places greater importance on vendors as a source of innovation, making innovation and experience centers--either at the vendor's offices or built alongside an operator--a critical sales tool. Vendors, after all, are no longer just selling boxes or even solutions. They are selling an ability to help operators differentiate themselves and execute on new business opportunities--something you need to show people, not just tell them.
  • Race For Credibility.  Let's return to the topic of vendor consolidation. Even where companies are acquired while on the verge of (or in the middle of) bankruptcy, the point is always the same; expanding revenues and market reach while executing on profit-supporting operational synergies. This mirrors the move of telecom network vendors into vertical markets. In an effort to grow revenues beyond their traditional service provider customers, most major infrastructure vendors have made the "vertical enterprise" a strategic focus: public safety, energy, finance, healthcare, transport, etc.  Unlike the operators they know so well, these markets have their own specific demands. Demands that can only be addressed with a combination of product customization, targeted sales efforts, and deep domain knowledge. In short, success will first require establishing credibility in these verticals. As vendors race to prove this credibility, demo centers are one tool, ideally pointing to know-how, innovation and an investment in the space.

So, back to the question of the Swedish vs. Finnish demonstration centers. Which was better? 

There's no easy answer. One was bright and open--the other more intimate. One was set up with what might be called "pods" depicting specific technology use cases--the other largely relied on PC stations, simulations and demonstrations that might be repurposed later. Both had auditorium style theaters. Both were set up for interacting with customers over refreshments--one seemingly more social, the other relying more on meeting rooms. Each had plenty of networking gear. Neither seemed particularly polished or attractive from the outside. One had a fireplace. Ultimately, however, despite their differences, both were remarkably similar in their goals and tactics: sales engagement against the backdrop of innovation proof points. To this end, each was successful, yet also reminiscent of counterparts elsewhere in Western Europe, the U.S. and Asia.

Peter Jarich is the Service Director leading Current Analysis telecom infrastructure practice. Follow him on Twitter: @pnjarich.

Suggested Articles

With CBRS entering the commercial phase, entities like Google are emphasizing products for the entire ecosystem, not just the SAS part.

Thomas Marzetta, originator of Massive MIMO technology, was appointed director of the research center at the NYU Tandon School of Engineering, replacing Ted…

T-Mobile executives reiterated their plan to use the proposed merger with Sprint to leapfrog competitors AT&T and Verizon in 5G.