As promised and previewed last week, here is a full transcript of the interview with Marc Overton, managing director of BT’s industrial go-to-market business Division X – from a conversation a couple of months back, at the UK operator’s annual Robotics Festival at its sprawling research headquarters in Adastral Park, in Suffolk. As noted before, BT has since moved to combine its national and international enterprise divisions, BT Enterprise and BT Global, in a single unit called BT Business.
But the talk with Overton remains highly relevant to the company’s strategy and outlook, and adds colour to the broader Industry 4.0 picture. He makes a number of interesting points, as trailed last week. BT has 13 private networks, he says, without specifying their locale. “We are not starting from nothing. But you have to go at the pace of the market,” he says. The market, in general, has moved beyond a straight discussion about foundational networking technology, he says, to focus more sharply on the applications that will make it pay.
Indeed, senior enterprise executives are now directly involved in discussions, he says. The message is that Industry 4.0 is not just a sales exchange with tech teams in enterprises; it is an essential strategic agenda item that goes beyond chief technology officers and chief information officers, right up to the top of the board table – which wants a look under the hood, and a sight of the roadmap. Which is why, also, Industry 4.0 is slow-moving, still. Vendors are required to “business-case” the joint, every time, to design the network and compute functions, and then to devise value-making applications on top.
It is not a cookie-cutter sale, as yet – despite all the work to blueprint Industry 4.0 componentry market-by-market. As discussed in last week’s summary entry, BT reckons it has an edge, with a bigger bag of spectrum tricks, which contains its own national assets, at home, plus an array of privately-available local airtime in various international markets. But BT is “honest”, too, says Overton; it will provide the brown bread of networking and security in the Industry 4.0 sandwich, but cannot supply the meat without partners. Which is its other great talent, he says.
The importance of the work, and the seniority of the stakeholders on the enterprise side and variety of the stakeholders on the supplier side, means there is a lot to organise. “Everyone has a dog in the fight,” remarks Overton. This is the case, particularly, with major demonstrator projects, like BT has at Belfast Harbour – the company’s headline private LTE/5G contract; the one that is supposed to crack the Industry 4.0 market open and the one Overton references in conversation. But over to him; all the answers below are his.
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Last time we spoke was 10 years ago or more – when you were in charge of IoT and wholesale at Orange UK, and later EE; some years prior to EE’s acquisition by BT. Just briefly talk through the last 10 years.
“From EE, I ran a payments business for First Data, which is now part of Fiserv. I was managing EMEA – emerging payments, cloud solutions, merchant-acquiring solutions; all IoT-enabled from an enterprise level. And then I was on the leadership team of Jasper, selling to Cisco – so getting back into the global IoT operator side. And then I went to Sierra Wireless, established their global services business, and took it from $20 million a year to $140 million a year in the space of four and a half years, and to being one of the largest MVNOs in IoT.
“And then I boomeranged back., attracted by the opportunity and vision at BT.”
And talk as well about the crowd today (in November, at the BT Robotics Festival in Adastral Park); it seems there are fewer technology partners and more enterprise customers, perhaps some academia. Is that right? Is the pitch from BT about the potential of Industry 4.0 etc to enterprises?
“We have quite a lot of partners here, but it is really about raising awareness among the enterprises we are in conversation with. It is part of the go-to-market strategy, actually. This centre, and the smaller one at head office, are great showcases for senior-level execs, who may not be CIOs or CTOs – so they can understand how technology can help them to be more efficient. And a lot of them are looking at robotics as part of those conversations…
“Because we are talking less now with procurement and technology, and more with line-of-business – with COOs and CEOs who, spurred by the pandemic and supply chain issues, and all the other things, are basically going, ‘I can’t just leave this just to the tech guy – I need to understand more about how to change my business, and to raise efficiency, reduce costs, and be more resilient’. These are the questions we are being asked all the time.
“It is different to where BT was before – which, if I can be so bold, was to be really good at RFPs for connectivity solutions. We are now responding to questions about how to transform enterprises. And we are working in collaboration with partners on that. We are working with PwC, for example, for that reason – because it talks digital transformation, and identifies where the gaps are and which solutions will drive transformation.”
Explain the telco-to-techco strategy at BT, and the role of Division X to deliver it. Explain, as well, how BT is using its own spectrum assets in the UK, alongside privately-licensed spectrum from Ofcom, and how its approach is different in the global market. Because there are lots of other telco providers, suddenly, supplying cellular networks and management to enterprises. So talk about that legacy telco expertise, and how it plays in the enterprise market, home and abroad.
“Leveraging our network and spectrum assets in the UK is a core focus. But we are also looking to resell other solutions globally, because it is a global industry. Manufacturing, in particular, is a global business. The question is how to provide more complete solutions. BT Global (now combined with the UK-based BT Enterprise division into BT Business) has been good at solution selling – because it doesn’t have the network assets. [The global team] has to sell other solutions, other people’s products, and [have been] very focused on partnering, and end-to-end solutions.
“Dare I say, [BT Global has been the] more focused on business outcomes than just on enabling connectivity. In its simplest terms, [the strategy is to] transform our go-to-market. But we are in the foothills; we will continue to develop. The question the sales team has to ask, now, is: who connects your machines? We haven’t asked that before. It has been about who connects your phones and broadband. But that question about connecting machines is now the conversation starter, leading to questions about where the machines are, and what solutions will go on top.
“But it is completely customer-centric. Customers want to talk about wider digital transformation. In terms of assets, the answer is not just about networks, but our customer base, our brand, our convening power to bring partners in. If you bring Microsoft, PwC, Atos, and Ericsson to the table with you, for example, and say that, ‘By working with us you have access to more integrated solutions’, then that is quite compelling. It addresses a need. Everyone says they do private 5G and IoT, but it is still a bit of a zoo. People do bits and pieces; no one is doing all of it very well.”
But presumably it will remain like that? Industry 4.0 is always going to be a zoo. Enterprises will never get the whole Industry 4.0 package from a single provider?
“Exactly. So you need an ecosystem and a partner approach. But you also need to be honest. And we are really honest. We do connectivity and we do security. And we provide the overarching coherence, if you like – the data orchestration. But we need others in order to provide the total solution. Because when you get into different verticals, the solutions are different. Machines in manufacturing are different to machines on the side of a dock, and different to the sorts of solutions required for ‘smart spaces’.”
Your sandwich analogy earlier (from the Robotics Festival keynote) seemed like a good one – that you are the bread of network and security in the Industry 4.0 sandwich, and you can offer the meat of the solution as well through your partnerships. That makes sense. But the network side can also be supplied now by Siemens or Microsoft, or any number of vendor brands. So what makes BT different to traditional telco rivals like Vodafone or Verizon on one hand, and to these newer entrants on the other? Because presumably the game for BT is to ‘prime’. BT would prefer not to come into the fold via Microsoft or Siemens, as a rule; the expectation for BT is that it is the master builder.
“Yes, certainly for those flagship critical national infrastructure opportunities, and particularly in the UK, that is fair. But why BT? It is a good question. Because we have spent a lot of time talking about why-private-5G and why-IoT; we haven’t been as focused yet on why-BT – on winning in the market. Why would you give a private 5G network to BT? It goes back to the assets. We own a public network, obviously, and the interoperability of private and public networks is pretty important. And we will use our spectrum holdings where it matters to improve coverage and resilience…
Just to clarify; when you say you will use your own spectrum holdings, are you referring to local rentals of your licensed spectrum, issued to enterprises as private spectrum, essentially?
“Yes; using our own spectrum in certain key private network deployments, where it will provide additional resilience. Now obviously, you need to be careful in terms of network planning, and making sure that works. And digital network slicing is definitely a part of the roadmap, too. But actually using our assets to support enterprises’ businesses, as opposed to just rolling out public networks – that’s a thing.”
Does that mean that the selling point for BT is resiliency – that you can sell fallback reliability to enterprises, by offering additional layers of localised spectrum?
“There is a bit of that, but we can also offer faster uplink speeds, in particular. There are features and benefits – where band N77 will give you X, our spectrum holdings will also get you X+Y. There is differentiation in the usage of spectrum – and so there should be, given the investment. The other thing that goes slightly unrecognised is our ability to run the network.
“Because it is not just about buying boxes; you have to actually run the network, which is a living, breathing, 365-type scenario. And it has to work with other systems. Which is what we do. And the overhead for that management expertise is [amortised] as-a-service. We have our network operations centre here at Adastral Park; that is the sort of access enterprises will get.”
Is that underplayed in the wider narrative around private networks – the value of traditional national spectrum assets in the new enterprise networking space? Because there are a whole bunch of new-style telcos coming into this market saying it is not your game. But it sounds like the response is that it is all your game – that you have a couple of games in play, and for critical industry out in the sticks you can run two or more streams of spectrum to raise performance and reliability for them. Is that right?
“We need to do what’s right for the enterprise on a case-by-case basis. We have more tools in our kitbag – to provide the right solution. A lot of people are coming into the market with bits of the solution, trying to stick it together with a bit of public spectrum, looking at it through a device-lens, or an SI-lens, or a cloud-lens. We are looking at the whole thing to see what the right solution is for the right use cases in the right scenarios.”
So to put it another way: would you suggest the narrative which gets told about big mobile operators in the private 5G space is missing a vital detail, and the carriers are being underestimated perhaps? And certainly that the carriers that are thinking about this in a certain way are being underestimated?
“It is not an easy thing. I just think we need to sharpen our own narrative a bit – so instead of just BT-does-networks, we need to explain what is different about what we are providing as a network operator, the largest one in the UK, that will give an enterprise better resilience, better security, better service, access to more applications, a wider partner ecosystem. We need to talk about all those things more overtly. We have been very good at showcasing what you can do with 5G, but we are now in that commercialisation phase.”
How far is the industry along with the commercialisation of Industry 4.0? Because certain use cases come up lots, and certain others clearly remain future projects. How much is being actually loaded onto private LTE and 5G networks in industry, currently?
“We talk a lot about Belfast Harbour, which is not a wandering pony. It is a live example of the complexity of these solutions – which started as a proof of concept, essentially as a public network instance, which we then made into a private network. We are now enhancing further; we had eight use cases, and we are now focused on the ones that generate value, and talking to the harbour tenants about their value. It’s a journey, which has taken about three years
“Because you’re essentially business-casing [the joint]. In this case, we are working with the harbour commissioners to resell [use cases] as part of their tenancy agreements. So it takes time. But we are beyond the proof-of-concept phase, in the proof-of-value phase – where the technology delivers and the price is coming down, which makes the business case easier. The question is about the outcomes. So, what’s the business benefit on top of the network?”
And how much of Belfast Harbour is 5G, and how much is really on LTE at the moment?
“So we are [at a point where] now… where 4G probably does what you need it to, moving it to upgrade to 5G… [But] it is never one-size-fits-all. Network planning is a key first step; working out the right solution for the environment. In-building coverage is complex, for example – you have to decide what works with Wi-Fi and what requires dedicated 5G. That discussion is important, and it then moves to the three or four [initial] use cases.”
Belfast Harbour sounds like a big showcase exercise as well, to an extent – like a small city or a big factory, which is important as a lighthouse deployment for the rest of Industry 4.0. But there is an argument that while these exploratory exercises are ongoing, there are enterprises that are ready to roll with private 5G. Is that the case, also, and how is BT finding business? There is a sense, as well, of regional differences – where US enterprises, probably less in manufacturing, are gung-ho in CBRS, and German enterprises, perhaps more fixated on URLLC-enabled manufacturing, are perhaps slower with it. How does BT see this?
“There are differences, globally. [Key vendor partners] say that, in terms of capability and capacity, BT is one of the most progressive in the use of 5G, and how it is deployed. I think the US is probably more advanced because of CBRS, and [US operators] are using it in stadiums, for example, in place of Wi-Fi for immersive experiences. Which is great. Where we are spending as much time, if not more, is on working out that business-casing across a number of verticals. But we have an active pipeline, and we are moving away from proofs-of-value.
“We will see more commercial deployments in the next 18 months. We are at 13 at the moment, so we are not starting from nothing. But you have to go at the pace of the market. It is not just about [selling] a product; you are [selling] something that needs to enable specific outcomes, which takes longer to model and embed, and involves more stakeholders. It is not just the IT director, but a board-level commitment. Everyone has a dog in the fight. It is not just a procurement exercise.”
Which enterprise vertical is doing this well with this stuff? Because there is complex critical infrastructure, which is kind of waiting on some future use cases, and others like warehousing, which are perhaps simpler to execute in. Is that a fair reflection of the buyer market?
“I think video surveillance, say, on a 5G network is easy to show value for. Digital vision and AI, for example, is very compelling. I think stadiums for media broadcast and immersive experiences need 5G. Hospitals are crying out for better connectivity, so that is going well. And then, yes, there is lots of interest from distribution centres – you know, a big metal box where everything is automated but nothing connects on Wi-Fi.”
Just lastly, quickly. As the UK’s biggest operator – and the country’s operator in name at least; perhaps nominally as a kind of national champion – does BT, and do you, think the UK is good at Industry 4.0, currently? Do successive governments get that technology will change industry, and how it will change industry? Is private innovation and public sponsorship of it working in the UK, do you think?
“I will answer that slightly tangentially. Having seen what happens elsewhere, particularly in the US, I think the capabilities we have in the UK, and the people in the UK, are phenomenal. The West Coast, Silicon Valley – there are amazing people, but no more amazing than here. In BT, say, we have so much human capital and innovation – in a way I don’t see in other operators globally. We should be harnessing that [national capability] more.
“And we should do that as a global Britain, as part of a post-Brexit agenda. It is really important with the present uncertainties in the world, and because we are more isolated post-Brexit. It has to be part of our competitive advantage. We have assets at our disposal that can really show the UK in a different light. Can we do more with the government? We are working to do more, whether with defence or health.”
