It seems strange for a telco to lean on its telco roots to sell digital services to enterprises – but that’s what Orange has done, as OBS becomes Orange Business.
The main news from the Orange Business strategy update in London last week (November 8) was that VMWare’s “flexible” SD-WAN service has been embedded into the French firm’s enterprise-geared Evolution platform – which is the springboard for its total reinvention as an integrator of various business services, and where its new management is focused. But the funny question for RCR Wireless was why retire the Orange Business Services (OBS) brand in the first place? Because OBS, among telcos, had a decent reputation with enterprises – especially as the sale of private 5G, integrated with other tech, has seen telcos face-off against parallel supplier markets.
As a brand, OBS sums up the operator’s new enterprise strategy just as well as it did its old one (if there is really any difference). In the end, business services is the whole change game, saying more than just telecoms gear; the acronymized OBS-tag set Orange apart, nominally, from the rest of the telco set. And what else is a brand for, if not to stand apart – especially in a market where telcos are still a little green? Whereas Orange Business? It’s fine, and follows the modish telco nomenclature. (BT Business is a recent rebrand, also.) But it also just sounds like another shop for enterprise SIMs. Orange Business, Verizon Business, Vodafone Business – who you gonna call?
It might be argued they would do well to watch instead for 5G-holding enterprise vendors from opposite channels – and to seek to accentuate their telco-plus knowhow, as OBS always did, as a business and a brand. Aliette Mousnier-Lompre, chief executive at Orange Business (and a former PSG pro footballer, it turns out), explained the whole thing at the London event – with great energy and conviction. “There is huge value for enterprises to combine telco and IT and digital components. Unlike traditional SIs, we have mastery of the networks – and not just expertise to advise customers in the thinking phase,” she said. The logic, then, seems to be for Orange to lean more heavily on its telco roots.
We will come back to this; but a quick explainer about the top points. The new Evolution platform is intended to make Orange’s networking, computing, and cybersecurity services available to enterprises in a modular fashion in a cloud-based environment – in the way standard cloud services are generally consumed (and traditional telco services are not). It is a “greenfield” build, from scratch, said the operator in London; new services, plus some old ones, will be migrated onto the platform over time. Software partners / solutions will be ‘onboarded’ in “months instead of years” and “weeks instead of months”, it said – or words to that effect.
VMWare’s software-defined wide-area network (SD-WAN) solution is the first to join; a simplified OBS portfolio, trimmed by a third down to 12 products, will be loaded into the platform over time – described as “digital building blocks operated through a cloud-native delivery model”. More bespoke services like private 5G will eventually be hosted here, too – but will take longer just because private 5G has to develop alongside, said an exec at lunch. This is what digital transformation looks like for a telco-linked integration business with a global outlook – and the springboard for Orange Business to return to profit by 2025, as per the master strategy set out at the end of 2022.
“We are going through the same challenges as all our customers,” said Mousnier-Lompre. The telecoms sector’s own digital change is long overdue. “We are doing the things we should have done years ago,” she said. The industry is “playing catchup”, despite “lots of investment and modernisation exercises”. The difference now is the “way we pivot”, she said – which is completely (“greenfield”, again) and utterly (to “unlock end-to-end [flexibility and value]”). She said in conclusion: “We have the right past, present, and future to succeed.” The future is “network and digital integration”, which still sounds like the past (business services); the new Evolution platform is the gateway to this future.
Meanwhile, the SD-WAN product from VMWare (Flexible SD-WAN with VMware), the first third-party offer on the platform, offers enterprises a central cloud system to enable a kind of proto-slicing service to provision, automate, and orchestrate a chain of wide-area (WAN) infrastructure and connectivity services – covering 5G, LTE, and Wi-Fi, plus satellite for hard-to-service locations. It taps into Orange’s network of ‘super’ points of presence (PoPs) across the carrier’s regional-edge, network-edge (MEC), and enterprise-edge data centres in global locations. It effectively presents a cloud system to spin-up semi-private enterprise connectivity.
But back to this issue about brand, and what it all means to be a telco in a busy enterprise supplier market. The OBS foundation is good, said Mousnier-Lompre. The “digital / integration / new connectivity” mix of non-telco services in OBS shifted upwards over two decades – from 14 percent in 2006, to 32 percent in 2018, to 44 percent now. The firm has built its reputation with “huge multinationals [and] French mid-market [firms], plus Orange Group itself (“our biggest customer”, defended as “an advantage, not a problem”). Mousnier-Lompre referenced a bunch of unnamed mega-customers, including a food retailer, beverage maker, battery maker, and a bank.
The point was to illustrate the breadth of the company’s in-house expertise. These firms have variously selected Orange Business to access and manage their networking, cybersecurity, and digital apps – plus their wrap-around design consultancy, systems integration, infrastructure management, and regulatory advisory services. They are all interested in and mostly engaged with developing artificial intelligence (AI) powers – to help with things like sentiment analysis in call centres and worker safety on production lines. “This is a data play, but also an infrastructure level play – and those two plays are increasingly intertwined,” said Mousnier-Lompre, as if the latter is under-appreciated.
The AI industry needs a broad-shouldered (business services) agency like Orange Business to put these layers together, and also to pull them apart when something goes wrong, she explained. She described a scenario where the AI throws up “weird results”, explaining: “It is hard to know if the problem is with the AI or an AI component, or with access to the data, security, or connectivity underneath. And it is important to be transparent with customers – to understand where the problem is, and to fix it as soon as possible. Because users will only see bad results, and not the complexity behind them. And they will blame the AI – which will create issues of trust and adoption.”
OBS service centres have “for years” taken calls from large multinationals with critical issues because applications go down, said Mousnier-Lompre, and they cannot discern the problem in “the local network, the firewall configuration, the cloud”. She remarked: “Orange Business (OBS, to split hairs) was very early to understand that they need not just connectivity, but also cloud and cybersecurity. And we believe that if we master the full aspect of digital infrastructure – with strong expertise also in AI and data – then we will be truly differentiated.” But it still makes sense (to us) as an OBS-branded proposition, just on a better platform.
The Hornby-esque list-making continued: five mega trends in the market (the “perma-disruption” of geopolitical and economic pressures, the rise of AI and the role of workers, “cloudification and virtualisation”, trust and security, and the new “green stakes”), combining ina “multi-dimensional equation”, and four reasons to pick Orange Business to solve it (network knowhow, digital expertise, hands-on management, and global reach). “We find ourselves at the cusp of an exciting new chapter. The transformations that enterprises are undergoing are more complex than ever.” On AI, Mousnier-Lompre said 2023/24 will be “years of experimentation”, and 2025 will see it “flourish everywhere”.
On the environment, she said every enterprise is now engaged. “It is high on the agenda. Five years ago, no one was talking about it. Today, no one isn’t. When we respond to tenders… the green component is higher and higher – with 15 or 20 percent of the assessment based on [ECG] criteria. A tender last month in France put it at 50 percent. So it is quite striking.” About the telco-plus-telco-plus combo, she said: “We have a leading position in networks, and a unique set of expertise in [digital and security besides].” Which, again, sounds the same as the old OBS remit – and does not actually mainline its Orange network knowhow as much as a whole rainbow of digital services.
On its coal-face team-play, she said: “We are doers. We are not just tech advisers. We deliver, run, and operate these complex infrastructures, and we are recognised for reliability.” And then she presented another four-point plan to outline the transformation: “One, cut the portfolio by half and focus on replicable [formulas] that produce value; two, transform from a telco business into a platform play; three, ringfence digital services… with the right skills and operating model; four, to roll out ambitious and efficient cost-cutting with a voluntary [redundancy] plan.” Apart from the slimline portfolio, most of the OBS frontend remains.
Apart from the brand, the message is all about the backend transformation of the company. “We will be the leading enterprise and digital integrator,” said Mousnier-Lompre. “We can lead customers [in this] multi-dimensional equation, and we have the right execution plan to succeed.” Just not as OBS, for some reason.
