From selling technology …… to selling value
Marc Jadoul
Market Development Director, IP Transformation Center
Monte-Carlo, 12 October 2008
Change. Innovation. Value.
Agenda.
Agenda.
Change. Innovation. Value.
Agenda.
Change. Innovation. Value.
It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.
Charles Darwin (1809-1882)founder of modern evolution theory
““””
Frankly, I didn't expect to be soprecise.
““
””Gordon MooreIntel co-founder and author of Moore’s law
Moore’s law has been ruling the IT industry for the past 40 years.
transistors
10,000,000,000
1,000,000,000
100,000,000
10,000,000
1,000,000
100,000
10,000
1,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
40048008
8080
8086
286386™
486™Pentium®
Pentium® IIPentium® III
Pentium® 4Itanium®Itanium® 2
Dual Core Itanium® 2
Source: Intel
Satisfying the need for speed.
speed
100 Mbps
10 Mbps
1 Mbps
<1990 1995 2000 2002 2005 2007 2009 2011 2015
Analog 28.8 Kbps
GPON1~10 Gbps
VDSL2>200 Mbps
ADSL2+24 MbpsADSL2
12 Mbps
ADSL1.2 Mbps
ADSL256 Kbps
Analog 56 Kbps
GPRS 53.6 Kbps
R99 348 Kbps
HSDPA14 Mbps
HSDPA+28 Mbps
HSDPA+42 Mbps
LTE25~100 Mbps
The odds of bandwidth abundance.
Price/MByte
1 premium SMS
20 regular SMSes
10 minute mobile call
40 photos email over dial-up
1 movie download over ADSL
End-User Price
~2 €
~ 2 €
~ 2 €
~ 2 €
~ 2 €
~ 15 000 €
~ 750 €
~ 2 €
~ 0.075 €
~ 0.0015 €
Bob MetcalfeEthernet pioneer, 3Com founderand author of Metcalfe’s law.
I helped [Al] Gore
inflate the Internet Bubble
““
””— I am not sorry.
Metcalfe’s law.
The value of a network is proportional to the square of the number of its nodes
(while the cost follows a more or less linear function)
# nodes
€
value
0 1 2 3 4 5
???
cost
Why Metcalfe’s law is not only about networks.
f(N2)
f(2N)
f(N)
A new end-user is born.
Source: NMPFT / Daily Herald Archive / Science and Society Picture Library
Sir Christopher Blandformer BT chairman
We will provide the greatest satisfaction to our customers and enjoy the greatest commercial success if we make every experience of our services simple and complete.
Didier Lombardchairman and CEO of the FT Group
We have grouped our products and services together under
the Orange banner in order to guarantee a unique experience
based on convenience and simplicity to our clients.
““
””““
””
The worst policy of all is to besiege walled cities.Sun Tzu (544—496 BC)author of ‘The Art of War’
““””
Source: Wikimedia Commons
Telcos riding the convergence wave.
‘Blue ocean’ strategies have become successful through the web.
Source: tostee.com
Source: Kim & Mauborgne
Compete in existing market space. Create uncontested market space.
Beat the competition. Make the competition irrelevant.
Exploit existing demand. Create and capture new demand.
Make the value-cost trade-off. Break the value-cost trade-off.
Align the whole system of a firm’s activities in pursuit of differentiation and low cost.
Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost.
Blue OceanRed Ocean
Introducing Alcatel-Lucent’s entrepreneurial boot camp.
PeoplePeople
IdeasIdeas
DatingEvent
BootCampBootCamp
VentureCapitalistsVenture
Capitalists
ExpertsExperts
DecisionGates
InternalVentureInternalVenture
Source: Alcatel-Lucent
The greatest peril in in developing high-tech markets is making the transition from an early market to a mainstream market.
Early Market Mature Market
“chasm”
Techies
Visionaries
PragmatistsConservatives
Skeptics
Source: the Chasm Group
Source: Wikimedia Commons
Paul Wiefelsmanaging director of the Chasm Group
Develop a product/service mix strategy that can evolve over the life cycle.
““””
Source: Wikimedia Commons
A solution is a combination of products and/or services with intellectual capital, focused on a particular customer problemand driving measurable business value.
Source: ITSMA
Measurable Business ValueLower Higher
Genericcustomers
Targetedfunctions
Targetedsegments
Customerswith common
problems
A segmentof one
Leve
l of
Cus
tom
er S
peci
fici
ty
Products,Capabilities &Bundled Offers
Products,Capabilities &Bundled Offers
Integrated Services & Intellectual
Capital
Integrated Services & Intellectual
Capital
HorizontalSolutions
HorizontalSolutions
VerticalSolutionsVerticalSolutions
CustomerSpecificSolutions
CustomerSpecificSolutions
You are surrounded by simple, obvioussolutions that can dramatically increase
your income, power, influence and success. The problem is, you just don't see them.Jay Abraham founder and CEO of Abraham Groupauthor of ‘Getting Everything You Can Out of All You've Got’
““””
Perc
eive
d
valu
e
Low
The value of a solution only exists in the context of your customer’s environment.
Low High
High
Price
Pricefocused players
Value & differentiationfocused players
Ultim
ate
failur
es
Source: OVUM
The Ansoff matrix reloaded.
MarketPenetration
ProductsM
arke
ts ProductDevelopment
MarketDevelopment Diversification
Present New
Present
New
Source: Harvard Business Review, 1957
If you don’t listen, you don’t sell anything.
Carolyn MarlandManaging Director of the Guardian Group
““””
Source: bbc.co.uk
Why selling services and solutionsis different from selling boxes.
We’ll need to supplement our well developed
high tech abilities with abilities that are high concept and high touch.
Daniel H. Pinkauthor of ‘A Whole New Mind’
““
””
Cables and componentsfor telecoms and energy
Enterprise and consumerCPE and professional services
Carrierinfrastructure, applications and integration services
in 1998
in 2008
Carrierinfrastructure and applications Enterprise
infrastructure and applications
Integration, operation, maintenance, professional and managed Services
(*) extrapolation Q2 results
*
Alcatel-Lucent partners with its customers to manage the
complexity of IP* Transformation and to achieve speed-to-market
with predictable results.
““
””Mission statement of Alcatel-Lucent’s
(*) Internet Protocol
IP transformation ‘beyond the boxes.’
Services
• Portfolio rationalization• New customers, higher ARPU• Enhanced ‘user experience’
Operations
• Processes & organization• IT systems and applications• Managed services
Network
• ‘All IP’ network• Service Delivery Platform• Getting rid of ‘stovepipes’
IP transformation solution.
Full-lifecycleMaster IntegratorProfessional Services
BusinessTransformation
NetworkTransform.
ServicesTransform.
StakeholderEngagement
Cross-domainMulti-vendor
End-to-End
Consult
Design
Integrate
Maintain& Operate
2
1
34
5
Deploy& Migrate
IP Transformation Centers.Partnering for change.
A new business model for Alcatel-Lucent and our customers.
Source: Gartner, TNZ, Alcatel-Lucent
Overall business strategy & planning.
Marketing & sales, customer services and billing.
Network strategy & planning and business case analysis.
Network & OSS design.
Network & OSS build, integration and migration.
Multi-vendor network operations & maintenance.
Integration of network & OSS with BSS & enterprise IT.
AfterArea of responsibilityBefore
Network investment sign-off.
Simon Moutter former COO of Telecom New Zealand
Tying in Alcatel-Lucent’s global expertise with our marketing and engineering efforts is helping us get our thinking right about how we migrate our networks but also about what services and products we really need to deliver to meet customer needs.
““
””We have considerably improved our speed to market and that’s critical for competing in New Zealand’s increasingly competitive communications market.
““
””It’s about value. And we are seeing real financial benefitsarising out of this partnership.
““””
From selling technology to selling value.
Telco
Softco
Equipment Provider
TransformationPartner
www.alcatel-lucent.com
[email protected]/in/mjadoul
Tom Peters management guru andauthor of “In Search of Excellence”
Don’t back away from passion.