From selling technology …
…
to selling value
Marc Jadoul
Market Development Director, IP Transformation Center
Monte-Carlo, 12 October 2008

Agenda.
Change. Innovation. Value.

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 so
precise.
Gordon Moore
Intel 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
Dual Core Itanium® 2
1,000,000,000
Itanium® 2
Itanium®
Pentium® 4 100,000,000
Pentium® III
Pentium® II 10,000,000
Pentium®
486™
1,000,000
386™
286
100,000
8086
8080 10,000
8008
4004
1,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: Intel

Satisfying the need for speed.
GPON
speed 1~10 Gbps
VDSL2
100 Mbps >200 Mbps
ADSL2+
ADSL2 24 Mbps LTE
12 Mbps 25~100 Mbps
HSDPA+
10 Mbps HSDPA+ 42 Mbps
ADSL HSDPA 28 Mbps
1.2 Mbps 14 Mbps
1 Mbps ADSL
256 Kbps
R99
Analog 348 Kbps
56 Kbps
Analog
28.8 Kbps
GPRS
53.6 Kbps
<1990 1995 2000 2002 2005 2007 2009 2011 2015

The odds of bandwidth abundance.
End-User Price Price/MByte
1 premium SMS ~2 € ~ 15 000 €
20 regular SMSes ~2€ ~ 750 €
10 minute mobile call ~2€ ~2€
40 photos email over dial-up ~2€ ~ 0.075 €
1 movie download over ADSL ~2€ ~ 0.0015 €

“ I helped
[Al] Gore
inflate the
Internet Bubble
— I am not sorry.
Bob Metcalfe
”
Ethernet pioneer, 3Com founder
and author of Metcalfe’s law.

Metcalfe’s law.
€
value
cost
0 1 2 3 4 5 # nodes
???
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)

Why Metcalfe’s law is
not only about networks.
f(2N)
f(N)
f(N2)

A new end-user is born.
Source: NMPFT / Daily Herald Archive / Science and Society Picture Library

“ 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.
Didier Lombard
chairman and CEO of the FT Group ”
“ 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.
Sir Christopher Bland
former BT chairman ”

“ 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.
Red Ocean Blue Ocean
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 Align the whole system of a firm’s
activities with its strategic choice activities in pursuit of
of differentiation or low cost. differentiation and low cost.
Source: Kim & Mauborgne
Source: tostee.com

Introducing Alcatel-Lucent’s
entrepreneurial boot camp.
Venture
Venture
Capitalists
Capitalists
People
People Internal
Boot
Camp Venture
Ideas
Ideas
Decision
Gates
Dating Experts
Experts
Event
Source: Alcatel-Lucent

The greatest peril in in developing
high-tech markets is making the
transition from an early market to
a mainstream market.
Pragmatists
Conservatives
Visionaries
Skeptics
Techies
Early Market Mature Market
“chasm” Source: the Chasm Group

“ Develop a product/
service mix strategy
that can evolve
over the life cycle.
Paul Wiefels
managing director of the Chasm Group
”
Source: Wikimedia Commons

A solution is a combination of products
and/or services with intellectual capital,
focused on a particular customer problem
and driving measurable business value.
A segment Customer
Level of Customer Specificity
of one Specific
Solutions
Customers
with common Vertical
problems Solutions
Horizontal
Targeted Solutions
segments
Integrated
Services &
Targeted Intellectual
functions Capital
Products,
Generic Capabilities &
customers Bundled Offers
Lower Measurable Business Value Higher
Source: ITSMA
Source: Wikimedia Commons

“ You are surrounded by simple, obvious
solutions 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 Group
author of ‘Getting Everything You Can Out of All You've Got’ ”

The value of a solution only exists in the
context of your customer’s environment.
Low Price High
High
Value & differentiation
focused players
value
Price
focused
Perceived
players
re e
ilu at
fa tim
s
Ul
Low
Source: OVUM

The Ansoff matrix reloaded.
Present
Products New
Present
Market Product
Markets
Penetration Development
Market
Diversification
New Development
Source: Harvard Business Review, 1957

“ If you don’t listen, you
don’t sell anything.
Carolyn Marland
”
Managing Director of the Guardian Group
Source: bbc.co.uk

Why selling services and solutions
is 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. Pink
author of ‘A Whole New Mind’ ”

in 1998
Cables and components
for telecoms and energy
Carrier
infrastructure, applications
and integration services Enterprise and consumer
CPE and professional services
Integration, operation, maintenance,
professional and managed Services
in 2008 *
Carrier
infrastructure and applications
Enterprise
infrastructure and applications
(*) 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.’
Network
• ‘All IP’ network
• Service Delivery Platform
• Getting rid of ‘stovepipes’
Services
• Portfolio rationalization
• New customers, higher ARPU
• Enhanced ‘user experience’
Operations
• Processes & organization
• IT systems and applications
• Managed services

IP transformation solution.
Cross-domain
Business Multi-vendor
Transformation
End-to-End
Services Network
Transform. Transform.
Stakeholder Consult
Engagement
1
Maintain Design
& Operate
5 2
Deploy
& Migrate Integrate
4 3
Full-lifecycle
Master Integrator
Professional Services

IP Transformation Centers.
Partnering for change.

A new business model for
Alcatel-Lucent and our customers.
Before Area of responsibility After
Overall business strategy & planning.
Marketing & sales,
customer services and billing.
Network strategy & planning and
business case analysis.
Network investment sign-off.
Network & OSS design.
Network & OSS build,
integration and migration.
Multi-vendor network
operations & maintenance.
Integration of network & OSS with
BSS & enterprise IT.
Source: Gartner, TNZ, Alcatel-Lucent

“ 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 benefits
”
arising out of this partnership.
Simon Moutter ”
former COO of Telecom New Zealand

From selling technology to
selling value.
Transformation
Softco Partner
Equipment Provider
Telco

Don’t back away from passion.
Tom Peters
management guru and
author of “In Search of Excellence”
www.alcatel-lucent.com
marc.jadoul@alcatel-lucent.com
www.linkedin.com/in/mjadoul