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Sunday, February 21, 2016

Stop talking about "Digital Services". Take a broader view of "Telco Futurism"

The Digital Myth

The biggest cliché in telecoms is that operators need to become "digital service providers".

All computing technology is digital, and has been for decades. Morse Code (invented in 1844) is digital. Pretty much all business processes already use digital technology too, albeit perhaps in disjointed fashion. It's equivalent to talking about services enabled by electricity - technically true, but irrelevant and unhelpful. 

Meanwhile plenty of analogue phenomena, products and skills remain valued and cherished by consumers and businesses. The field of "design thinking" is a good example of the value analogue ideas still bring to enterprise. Future bio-computers may be analogue.

Yet this vague, catch-all "something must be done" digital mantra is pervasive. It's used as a comfort-blanket for those doubting their own continued relevance, often devoid of understanding of what is happening in the world at large. Expect "digital" to be writ large at MWC in Barcelona next week

If you're there, question its inclusion and meaning vigorously at every opportunity. Ask vendors and operators how many designers they employ, and if they have a CDO as well as a CTO.

"Future" not "Digital"

Instead of picking a historical and irrelevant technology-related term, the industry needs to acknowledge and embrace a far more important one: "Future". Rather than digital services, telcos should instead start talking about Future Services with the underlying mindset of Telco Futurism.

This means reframing the debate, to one where Networks and Communications intersect with multiple emerging Future trends - analogue OR digital OR non-computing - to create new experiences, new capabilities, new threats and new sources of value. Those trends indeed could be technological (eg machine-learning, or robotics), or they could be social, behavioural, biological or political (eg urbanisation or biomedical advances). They may yield new services, new operational practices, new competitors, new governance systems or new supporting infrastructure.

As I've noted before [link], the words and analogies we choose are vitally important. If we describe ideas or strategies fuzzily, using woolly comparisons or try to knit many unconnected strands into a single blanket theme, we start acting like sheep, not wolves. (Yes, the puns are deliberate. The word "digital" is shorn of meaning. I'll leave "lambs to the slaughter" as an exercise for the reader, to shepherd into the fold).

Focusing on "digital" is a distraction. The industry needs to be "post-digital", where obviously computing and communications is pervasive, but that's taken for granted. What's important for telecoms is what else is happening, and how it reacts dynamically to a changing, accelerating  world.

What is "Telecom Futurism"?

I’m personally very interested in the overall long-term futures path: IoT, robotics, human enhancement, socio-political change, sharing/gig economies, blockchain, 3D-printing, new energy sources and much more. But from a business and consulting standpoint, I’m looking at how those changes specifically impact the telecoms industry, its customers and its vendors, primarily on a 3-5 year view. 

In the past, the futures/analysis horizon was 5-10 or even 20 years away. "Scenario planning", "Foresight" and similar terms are used to describe the distant pathways that may lie ahead. In most cases, only a few strategists and the CEO had to consider the far, scary sci-fi future - other people in the organisation only had to consider a fairly limited envelope, within which change and competition could occur.

But that threshold has massively compressed recently. Unimaginable change from outside classic telecoms now impacts within a 3-5 year horizon, quite possibly reducing to 1-2 years soon. Product management, marketing and finance functions cannot just complacently focus on the "known knowns". 

This means that analysts - and telco strategists and executives - now need to consider the impact of much bigger "out of context" trends than they perhaps feel comfortable with, or else just confine themselves to commenting upon and forecasting narrow product niches, and hope to be insulated from the medium-to-longer term chaos.

Critically, some of the most important changes in telecoms - NFV/SDN, 5G networks, LPWAN, "IP transformation" and so on, are occurring at the same time as accelerating non-telecom megatrends elsewhere. Assuming those paths are independent is naive. We see hints of this in the discussion of IoT and telecoms, but that tends to assume a shallow overlap on a Venn diagram, not something more fundamental and under-lying.

Most telcos don't understand the future. And most futurists misunderstand telecoms. I see too many trite slogans that "everything will be mobile", that there's a "traffic tsunami", or that voice communication is "dead", or that telcos only choices are between "battling OTTs", "offering digital services" or becoming "dumb pipes". There's a lot of regurgitation of old, discredited or skewed vendor marketing hype ("1000x"). There is little understanding of what else is changing in the world, and how it affects telecoms, directly or indirectly.

We have already seen what happens when external, misunderstood trends (eg the web) intersect with telecoms on a 10-year view. Those megatrends are now occurring 3x faster - look at the pace of development of drones, machine-learning, self-driving cars, or CRiSPR genetic engineering as examples. The next megatrends will be faster still.

Intersecting Trends - Multi-dimensional implications

Communications technology trends intersect with other trends, with unpredictable and even chaotic implications. We've seen this in the past, where broadband networks' evolution intersected with the web (a way of storing/linking information), audio codecs (enabling VoIP), or capacitative multi-touch displays (driving modern smartphone UIs).

Future trends have five sets of impacts on telecom companies and strategies (and that includes web/enterprise communications as well as traditional licenced network operators):
  • Opportunities: The main focus of this post and much of my work, is where new service possibilities arise at the intersection of two or more trends, such as (mobile broadband + wearables), or (voice communications + machine learning).
  • Catalysts: Sometimes called enablers, it is important to understand how future trends may change the supply-side and operational characteristics of the industry. We already see the impact of cloud-based IT on the structure of telecoms networks - but now we also see potential from AI/machine-learning (eg "cognitive OSS") and many other less-obvious shifts. (How long before we see robotic maintenance of networks?)
  • Risks: Potential negative impacts to historic business models, incumbency or operations arising from new trends or technology. The rise of encryption, preventing network discrimination or "optimisation" of applications, is a good example.
  • Redefinitions: A shift of perspective for a long-used word or idea, driven by an emerging trend. My recent post (link) on voice vs. telephony is an example.
  • Game-changers: Also known as a disruption, this is a fundamental change in the human, societal, technological or economic background which can destroy an old industry, or create a new one. The Internet is an obvious one.
Some of these non-telecom future trends include urbanisation of society (which drives smart cities and many other effects), the rise of machine-learning and AI, evolution of robots & smart machines, 3D-printing, biomedical advances driving longer lifespans, human enhancements in body & cognition, a reinvention of transactions, new types of crime and terrorism, shifts in transportation and energy, and many other huge evolutions of society and business.

These non-telecoms developments will all change why, when, where, how and with whom we communicate, and the networks we use to do so. Yet for the most part, the industry fails to grasp the subtleties implied.

There are similar limitations in understanding how communications will change in enterprises, as well as telcos. While there's a lot of talk about "collaboration", or vague pronouncements about "digital transformation", there's still a huge gulf in understanding and knowledge of how these are likely to play out, given the various other trends which are now "baked into" technology, business and society.

Businesses' future employees, associates and customers will experience and consume communications capabilities and services in entirely new ways. This is driven not just by networks moving to IP, or normal business evolution and the latest management/process trends, but also what changes in other adjacent technology areas - for example, AI and machine learning, or drones or ubiquitous sensors.

Telco Futures - some examples

So what are these communications/megatrend intersections?

Let’s take two main “communications” themes as horizontals – better networks (5G, LPWAN, WiFi, NFV/SDN), and better “conversations” (ie voice/video/messaging apps and platforms). And then consider how they touch important “vertical” trends – for example, technologies such as cognitive computing, IoT/sensors, wearables – or socioeconomic changes such as exponentially-growing sharing-economy businesses, or crowd-sourcing.

Some interesting cross-over domains include:
  • Contextual communications, occurring at the intersection of machine-learning, sensors and new UC and WebRTC platforms/APIs.
  • Smart connected cities, at the intersection of LPWAN or cellular networks, linked to sensors and new energy/transport systems
  • Precision agriculture, using wearables, drones, self-driving vehicles and a variety of new control/communications systems 
  • Smart crowd-control, using behavioural analytics, architectural design tools, fluid-dynamics modelling and mobile devices/networks for measurement/information
  • Insurance claim-management, using a combination of voice analytics, video-streaming (eg walking around a vehicle) and perhaps in future self-driving recovery vehicles or 3D-printers for parts.
The almost-cliched example of Uber is a good one. As well as its full-time employees, it also has a vast network of drivers who are independent agents/contractors. These communicate with the end customers, with location, payment, reputation and mobility all intertwined with the basic ingredients of messaging, voice and notification. We already talk about the "Uberisation of Everything", but we miss that communication is at the core of the sharing and gig economies.

All of these present both opportunities and challenges for traditional telcos or enterprise communications/network vendors. Communications is starting to get absorbed into apps, websites or devices. Networks are being optimised to serve particular purposes. There is less need – and less value – placed on one-size-fits-all standardised offerings like phone calls. Value is flowing to ideation and design, as it increasingly becomes possible to make anything “real” once it is conceived.

The risk is that conventional telecom or enterprise solution vendors spend so long trying to fit historic constructs and processes to this new work (eg IMS) that they miss the opportunities. There is an equal risk that regulators and governments restrict the telecom market to historic products like "phone calls", and create new rules for "digital services" that end up creating unintended consequences that impede innovation and dynamism.

Telco Futurism: Where to Start

The future of telecom isn't in Barcelona this week. It's at conferences on drones, urban-planning, blockchain, future food, virtual assistants and many others. Yes, there will be car-makers and assorted IoT gizmos at MWC, but expecting the rest of the world to come to telecoms, rather than vice-versa, is arrogant and narrow-minded.

Real disruption occurs at intersections between technology paths, not because of steady - or even accelerating - evolution along those paths. 5G will not be a big deal in its own right, for example – it is only brought to life when it encounters new devices, new philosophies, new business models. The same is true of new cloud-collaboration and UCaaS platforms for enterprise communications.

The word "digital" is meaningless, misleading and distracting. It is technology-centric "virtue-signalling" for lazy telco execs and ignorant politicians, used to describe anything from home automation, to music downloads, to industrial IoT platforms, to providing footfall statistics for retailers. 

This is also why I've started my own re-focusing and re-branding. Historically, I've described myself as a technology analyst & strategy consultant. My remit spans mobile, voice/video communications, regulatory policy, telco business models, enterprise UC/UCaaS and so on. That's already wider than most of my peers in the analyst world, who generally focus on specific slices of the industry, which they cover in more depth. 

However, this has changed in recent months. I have started to focus more on longer-term trends in technology and society, with an even broader perspective, well beyond just telecoms/Internet, as they all inter-relate. I'm now working not just as an analyst - and more specifically, a "Telco Futurist".

(Sidenote: my good friend & peer Alan Quayle sometimes describes futurists as indecisive "corporate astrologers" unwilling to make solid predictions. Wary of that criticism, I'm approaching it with my normal acerbic tone and trenchant opinions, forecasts and anti-forecasts)

What this means is that you should expect a lot more "tangential-seeming" material from me. While I'm still going to be covering NFV, WiFi, 5G, WebRTC, UC/UCaaS and related areas, I'm also going to be talking about drones, self-driving vehicles, machine-learning and other topics. They're not far off. They're not sci-fi. They're not niche. They're pivotal to the future of the telecom/Internet-comms industry, and understanding their intersections with networking and voice/video technologies is essential.


Jo Ramachandran said...

Great blog, Dean! Your observations are on point. One other area that is worth considering for inclusion here is the transformation in payment networks, and Bitcoin in specific.

InfoStack said...

The cost of communications is still discrete. It is therefore old-school, analog. In the future the cost will be embedded in the socio-economic session/transaction. This is the digital future. We need horizontally scaled exchanges that afford an infinite supply of vertically complete solutions to satisfy rapidly growing and diverging demand (at the margin).

We need to revisit the importance of settlements serving as price signals to send incentives and disincentives and convey value that is typically captured at the core and top of the informational stack.

And all this needs to occur in timeframes far shorter than even you suggest. If we look at the core of the inter-networks today the timeframes are measured in weeks, months and quarters. Due to the pace of change in supply and demand those timeframes are now radiating out to the edge (the access ISPs and enterprises).

B.O.L.T. said...

Brilliant read, Dean! I've become so fed up with the d-word but have up to now found it hard to convince. Maybe minds will change.

Good list of future trends that will impact society, business and life. What I am missing is the less bright topics - terrorism, fugitive movements, sustainable government and devlopment / identity, envoronmental pollution - eg. from changing food crops to fuel crops (in the name of reducing carbon emissions)....

Continue your work!

Themoosieman said...

I don't say this often, but this is seriously good stuff. A LOT of food for thought.

Dean Bubley said...

Thanks for all the comments on this.

BOLT - yes, there's a bunch of dystopian futures out there too. Some are pretty existential risks & this orthogonal to anything telcos could ever do (Gamma-ray burster? Supervolcano? Good night), but others perhaps not (Flooding/extreme weather, Magnetic storms)