Google challenges CSPs for data assets

OVUM VIEW

Summary

TM Forum’s Big Data and Analytics Summit took place in Amsterdam in January 2013. Approximately 150 delegates attended the summit from across the entire telecoms ecosystem, including established communications service providers (CSPs), over-the-top (OTT) players, network equipment providers, software vendors, and data warehousing and analytics specialists.

Are the numbers in Google’s favor?

Most of the presentations at the summit paired CSPs with their suppliers and focused on the benefits of Big Data and analytics for network planning and design, the personalization of services, and proactive care. The presentations that caused the most excitement were from Google and eBay. Google mentioned that it lays its own dark fiber and runs the world’s second-largest data network (behind Level 1). It also divulged the following facts:

  • it doesn’t rely on a client server architecture
  • it doesn’t touch the server
  • it can take data centers offline for upgrades or maintenance without impacting performance
  • applications are built on one platform across all of its data centers
  • its internal business intelligence system can query and analyze 10 trillion rows of data in 10 seconds
  • it can refresh the entire web index in 30 minutes.

Compared to Google’s presentation, subsequent presentations from CSPs seemed labored, less visionary, and struggled to match the comprehensive execution demonstrated by Google. Considering that CSPs and OTT players have external suppliers, systems, and software in common, how has the gulf between OTT players and CSPs become so large?

CSPs’ operations are at odds with data management goals

The answer can be found in company culture, structure, and operational issues rather than in technology. Where CSPs talk about delivering improvements of 10%, Google talks about tenfold business improvements. Results like these can’t be achieved by squeezing more out of existing systems for the benefit of shareholders; they require a different commercial approach. Ovum has previously argued that CSPs have to find new ways to innovate in terms of marketing and service delivery. However, getting this right requires experimentation and flexibility in a business, and business processes need to be able to absorb failure along the way.

The harsh reality for CSPs is that they cannot afford to fail. With network, service, and customer data assets so important to CSPs’ businesses, changing how data is managed, stored, extracted, and used requires sign off from senior management. This means that seemingly simple projects can suddenly become career defining for those involved. Some CSPs acknowledge this difference. For example, Telefonica Digital is a separate unit that deals with customer experience and analytics initiatives outside of the traditional structure and culture of its parent company.

As an industry, there is more that CSPs must do. However, speed is the imperative if they plan to monetize their currently unique data assets.

APPENDIX

Author

Clare McCarthy, Practice Leader, Telco Operations

clare.mccarthy@ovum.com

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