Telco Cloud: The Trojan Buffalo

At Telco Cloud World Forum this week, one speaker likened operators to buffalo that have grazed their feeding grounds to dust and are now in need of pastures new.

The telco as buffalo is an appealing image; one to ruminate on, as it were. On the one hand buffalo can be quick for their size, extremely strong, dangerous in a fight and difficult to bring down—especially when they’ve got momentum. The weaker ones get picked off now and then, but that’s the way of the world.

But they are also short sighted, easily spooked and exhibit the definitive herd mentality—particularly when they sense a threat.

Right now operators are stampeding towards “The Cloud” as if a pack of lions were nipping at their flanks; there were 300 cloud service launches by telcos in 2012, according to Informa’s Camille Mendler. The problem with operator stampedes, and we’ve seen a few over the years, is that—like buffalo—they’re not always individually aware of where they’re going and why; in fact the motivation is often as much about leaving a particular place as it is about reaching one.

One of the themes that emerged on the first day of the event was the importance of operators having a clear idea of where they want to get to with cloud services. Tim Marsden, head of cloud at Telefónica, said operators should know their market, their customer and their competition, identify their spot and make sure the sales team is on song.

This is sound business planning, albeit specific to neither cloud nor telecoms. But this is rather the point. Cloud isn’t a “thing” in itself that operators can sell, it’s another means of delivering a number of services. You can be sure that many of the SMB customers that operators are planning to target with their cloud offerings will not really understand what the cloud is or does. So it is essential that operators have clarity on this, particularly in that part of the business that interfaces with the customer—the sales team.

We’ve probably all, at one time or another, overheard a sales person try and sell something they don’t understand and it’s not easy listening. What was interesting about Marsden’s advice was his suggestion that operators should make this problem so central to the definition of their cloud offerings, by focusing on solutions that their sales teams find it easy to grasp.

Telco’s cloud offerings are a “fusion of IT and communications led by our sales people,” he said. Solutions like security or storage are “natural” upsells, that “any sales guy can understand.” Sales teams get their foot in the door with traditional comms services, giving them a platform for a closely related incremental sale. He likened it to the Trojan Horse.

There was no Trojan Buffalo, of course—the horse is a far more potent symbol of speed, strength and virility. But the sturdy old buffalo is perhaps more apt for a strategy that is built around such steady caution.

The problem, as always, is that it’s the quick, aggressive innovators that are changing the operators’ world, just as it’s the predators that dictate the movement of a stampede. When the dust settles hopefully the operators will find fresh feeding ground, and not end up as lunch for the lions.