From Selling Technology to Selling Value (2008)


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"From Selling Technology to Selling Value" presented at the Marcus Evans "Marketing Trilogy Summit" in Monte-Carlo, October 2008.

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From Selling Technology to Selling Value (2008)

  1. 1. From selling technology … … to selling value Marc Jadoul Market Development Director, IP Transformation Center Monte-Carlo, 12 October 2008
  2. 2. Agenda. Change. Innovation. Value.
  3. 3. Agenda. Change. Innovation. Value.
  4. 4. Agenda. Change. Innovation. Value.
  5. 5. “ 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
  6. 6. “ Frankly, I didn't expect to be so precise. Gordon Moore Intel co-founder and ” author of Moore’s law
  7. 7. 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
  8. 8. 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
  9. 9. 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 €
  10. 10. “ I helped [Al] Gore inflate the Internet Bubble — I am not sorry. Bob Metcalfe ” Ethernet pioneer, 3Com founder and author of Metcalfe’s law.
  11. 11. 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)
  12. 12. Why Metcalfe’s law is not only about networks. f(2N) f(N) f(N2)
  13. 13. A new end-user is born. Source: NMPFT / Daily Herald Archive / Science and Society Picture Library
  14. 14. “ 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 ”
  15. 15. “ The worst policy of all is to besiege walled cities. Sun Tzu (544—496 BC) author of ‘The Art of War’ ” Source: Wikimedia Commons
  16. 16. Telcos riding the convergence wave.
  17. 17. ‘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:
  18. 18. 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
  19. 19. 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
  20. 20. “ Develop a product/ service mix strategy that can evolve over the life cycle. Paul Wiefels managing director of the Chasm Group ” Source: Wikimedia Commons
  21. 21. 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
  22. 22. “ 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’ ”
  23. 23. 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
  24. 24. The Ansoff matrix reloaded. Present Products New Present Market Product Markets Penetration Development Market Diversification New Development Source: Harvard Business Review, 1957
  25. 25. “ If you don’t listen, you don’t sell anything. Carolyn Marland ” Managing Director of the Guardian Group Source:
  26. 26. Why selling services and solutions is different from selling boxes.
  27. 27. “ 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’ ”
  28. 28. 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
  29. 29. “ 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
  30. 30. 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
  31. 31. 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
  32. 32. IP Transformation Centers. Partnering for change.
  33. 33. 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
  34. 34. “ 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
  35. 35. From selling technology to selling value. Transformation Softco Partner Equipment Provider Telco
  36. 36. Don’t back away from passion. Tom Peters management guru and author of “In Search of Excellence”