Consumers are ready for the networked world.
Are you?
The boundaries of the telecommunications industry
continue to blur as technology, business and consumer
trends redefine the digital services marketplace.
Long talked about, "convergence" is now an
accurate description of the current business model
of the communications services industry. Carriers,
software companies, high-tech firms, media enterprises,
entertainment conglomerates—all may find
themselves collaborating and partnering one day …
and competing against each other the next.
But what exactly do these different players need
to do to gain a competitive edge? A wide-ranging
research initiative from Accenture—surveying
industry executives as well as consumers in both
the developed and developing worlds—creates
some urgency around that question, especially
when it comes to service providers.
Our global consumer survey of early adopters of
technology devices and services—a group we term
"tech forwards"—found that these users are quickly
embracing the possibilities of a networked world.
They are waiting—sometimes impatiently—for
companies to take this vision to the next level by
delivering a seamless experience, a common
platform and a superior service.
At the same time, our interviews of executives
representing carriers, software providers and
media/content companies reveal a troubling sense
of complacency among the companies that should
be moving faster to meet the needs of these techforward
consumers. Many carriers appear to be
overly content with selling legacy services,
attempting to recoup sunk costs for their
existing communications infrastructure.
Accenture believes, however, that holding onto
the past for too long creates inertia among carriers
and impedes the transformation process needed to
serve the communications and entertainment
needs of today's consumers.
Companies that expect
to achieve high performance need to move quickly
to meet consumer expectations
.
Consumers are ready
Our research study examined the perceptions and
usage of tech-forward consumers in the United
States, Europe, Japan, Brazil, China and India.
Participants were screened to ensure that they
were part of a demographic that embraces
leading consumer technologies.
The survey findings reveal a high degree of understanding
among these consumers of today's key
trends in the networked world. Accenture refers
to one of the most important of these trends as
"trivergence": the coordination of three components—
devices, data and controls—over a ubiquitous
network. The Apple iPod is perhaps the best
way to understand trivergence. Unlike, say, a CD
player, which contains within a single device both
the data and the controls, a trivergent device like
an iPod operates quite differently. The data or content
resides in the device, as well as in a library,
usually on a person's computer. The controls reside
not only on the physical device but also on what
we call a "soft panel"—in this case, the menus and
screens made possible by iTunes software.
The most important message about trivergence and
the networked world is this: Consumers get it. Only
3 percent of those with whom we spoke didn't
understand the concept and capabilities of this
networked, trivergent world. And 87 percent
either agree or strongly agree with
the prediction that most digital devices
for a home, car or individual will ultimately
feature a network connection.
Consumers also understand the value of
trivergence. Almost 90 percent agree that
trivergent capabilities will save them
time. More than 80 percent affirm that
trivergence can create more business
opportunities for them. High percentages
also believe that the new networked
world will make their lives richer and
more enjoyable, and bring them closer
to their friends and family. Seventy-eight
percent feel that trivergence can help
them advance their careers.
The consumers in our study are also
prepared to dream big about how a networked
world might change the way they
work and live. Ninety-three percent can
see trivergence creating more energyefficient
controls for things like lighting,
heating and cooling. About 80 percent
can envision network connectivity for
their cars, as well as their refrigerators,
ovens, dishwashers and even small appliances
such as toasters and coffeemakers.
(Put the clothes in the washing machine
but forgot to turn it on?
No problem:
Log in at work to your appliances soft panel
and turn it on remotely.)
Service providers may not
be ready
If consumers are ready for the extraordinary
world enabled by trivergence,
industry executives are uncertain that
companies are feeling a sufficient level
of urgency.
While many respondents to our survey
agreed that the trivergence trend will
continue on a steep trajectory, too few
companies have developed a set of wellformed
implications about the growing
plethora of networked devices. Concerns
seem to be more tactically focused at this
stage: Will more bandwidth be required?
Will more databases will be needed?
The carriers with whom we spoke were
confident about their ability to operate in
the trivergent world; they believe themselves
well-positioned to overcome the
technical challenges in migrating to IP.
They do not believe they are fated to
become “dumb pipe” providers. In
describing their future roles, carriers tend
to view themselves as exerting more control
over content and services than the
technology/content partners will.
In the face of this overall confidence,
however, are some concerns about carriers
expressed by technology and content
partners—specifically, that carriers are not
thinking about the future in a sufficiently
transformative way. As one tech company
executive bluntly put it, "I don’t think the
carriers are on top of IP transformation."
Another possible concern is that the
forces of technological change are too
great for existing carrier strategies.
Another high-tech executive compared
today's situation to the fate of middleware
in the evolving Internet era. “There
was a huge role for middleware in the
early days of the Internet because companies
were trying to figure out how to
interface older enterprise systems with
the Web. Now those companies are taking
out the middleware and going direct. The
same thing will happen in networking.
There will be a need for 'glue' in the early
days, but at the end of the day, every
point will be a node on the network and
the nodes will be able to communicate
with each other without going up to a
super node and coming back down.”
The potential stifling effect of legacy
business models and cultures is another
obstacle to be addressed by the carriers.
One high-tech executive noted, "I’m still
seeing an enormous cultural hold over
from the old days of a monolithic monopoly.
Carriers are making some progress,
but they don’t show enough agility and
flexibility in keeping up with the changes
and what customers are demanding.”
So what is to be done? An executive from
a device manufacturer pointed to a likely
path forward: “To survive, carriers need
some type of value proposition that deals
with content itself so that it becomes
more of a brand play—delivering the content
that consumers value across different
platforms.”
The importance of collaboration
Accenture believes that delivering a
seamless customer experience over a
common platform will require a distinctive
collaborative mindset. Very few businesses
have a trivergence strategy for the
growing plethora of networked devices
and services, never mind the resources to
execute such a strategy.
Based on our interviews with executives,
the various industry players all see the
value of such collaboration. For example,
one high-tech company executive said,
“We don’t want to have the customer set
up an account with us so that we collect
the money and then pay part of it back
to the carrier. That is a lot more arduous
than using the billing relationship that
the carrier already has established. Any
time a company already has a good
relationship with its customers, we try
to leverage that.”
And, of course, the value of such
partnerships between carriers and technology/
content providers goes both directions.
As another high-tech executive
noted, “I think the financial opportunities
for the carriers lie in unique partnerships
where they can get content, special products,
offerings or rewards—something
that delivers unique and exclusive value
rather than a 'me-too' proposition."
Building mutually beneficial partnerships
with strategically aligned industry players
will be a key to emerging as a provider
capable of making all of these complex
offerings work together. Carriers, software
companies, Internet businesses,
media enterprises and entertainment
conglomerates will be both partners and
competitors from day to day in the networked
world. Choosing the right partner
has never been more important.
Source: Accenture November 2008
The boundaries of the telecommunications industry
continue to blur as technology, business and consumer
trends redefine the digital services marketplace.
Long talked about, "convergence" is now an
accurate description of the current business model
of the communications services industry. Carriers,
software companies, high-tech firms, media enterprises,
entertainment conglomerates—all may find
themselves collaborating and partnering one day …
and competing against each other the next.
But what exactly do these different players need
to do to gain a competitive edge? A wide-ranging
research initiative from Accenture—surveying
industry executives as well as consumers in both
the developed and developing worlds—creates
some urgency around that question, especially
when it comes to service providers.
Our global consumer survey of early adopters of
technology devices and services—a group we term
"tech forwards"—found that these users are quickly
embracing the possibilities of a networked world.
They are waiting—sometimes impatiently—for
companies to take this vision to the next level by
delivering a seamless experience, a common
platform and a superior service.
At the same time, our interviews of executives
representing carriers, software providers and
media/content companies reveal a troubling sense
of complacency among the companies that should
be moving faster to meet the needs of these techforward
consumers. Many carriers appear to be
overly content with selling legacy services,
attempting to recoup sunk costs for their
existing communications infrastructure.
Accenture believes, however, that holding onto
the past for too long creates inertia among carriers
and impedes the transformation process needed to
serve the communications and entertainment
needs of today's consumers.
Companies that expect
to achieve high performance need to move quickly
to meet consumer expectations
.
Consumers are ready
Our research study examined the perceptions and
usage of tech-forward consumers in the United
States, Europe, Japan, Brazil, China and India.
Participants were screened to ensure that they
were part of a demographic that embraces
leading consumer technologies.
The survey findings reveal a high degree of understanding
among these consumers of today's key
trends in the networked world. Accenture refers
to one of the most important of these trends as
"trivergence": the coordination of three components—
devices, data and controls—over a ubiquitous
network. The Apple iPod is perhaps the best
way to understand trivergence. Unlike, say, a CD
player, which contains within a single device both
the data and the controls, a trivergent device like
an iPod operates quite differently. The data or content
resides in the device, as well as in a library,
usually on a person's computer. The controls reside
not only on the physical device but also on what
we call a "soft panel"—in this case, the menus and
screens made possible by iTunes software.
The most important message about trivergence and
the networked world is this: Consumers get it. Only
3 percent of those with whom we spoke didn't
understand the concept and capabilities of this
networked, trivergent world. And 87 percent
either agree or strongly agree with
the prediction that most digital devices
for a home, car or individual will ultimately
feature a network connection.
Consumers also understand the value of
trivergence. Almost 90 percent agree that
trivergent capabilities will save them
time. More than 80 percent affirm that
trivergence can create more business
opportunities for them. High percentages
also believe that the new networked
world will make their lives richer and
more enjoyable, and bring them closer
to their friends and family. Seventy-eight
percent feel that trivergence can help
them advance their careers.
The consumers in our study are also
prepared to dream big about how a networked
world might change the way they
work and live. Ninety-three percent can
see trivergence creating more energyefficient
controls for things like lighting,
heating and cooling. About 80 percent
can envision network connectivity for
their cars, as well as their refrigerators,
ovens, dishwashers and even small appliances
such as toasters and coffeemakers.
(Put the clothes in the washing machine
but forgot to turn it on?
No problem:
Log in at work to your appliances soft panel
and turn it on remotely.)
Service providers may not
be ready
If consumers are ready for the extraordinary
world enabled by trivergence,
industry executives are uncertain that
companies are feeling a sufficient level
of urgency.
While many respondents to our survey
agreed that the trivergence trend will
continue on a steep trajectory, too few
companies have developed a set of wellformed
implications about the growing
plethora of networked devices. Concerns
seem to be more tactically focused at this
stage: Will more bandwidth be required?
Will more databases will be needed?
The carriers with whom we spoke were
confident about their ability to operate in
the trivergent world; they believe themselves
well-positioned to overcome the
technical challenges in migrating to IP.
They do not believe they are fated to
become “dumb pipe” providers. In
describing their future roles, carriers tend
to view themselves as exerting more control
over content and services than the
technology/content partners will.
In the face of this overall confidence,
however, are some concerns about carriers
expressed by technology and content
partners—specifically, that carriers are not
thinking about the future in a sufficiently
transformative way. As one tech company
executive bluntly put it, "I don’t think the
carriers are on top of IP transformation."
Another possible concern is that the
forces of technological change are too
great for existing carrier strategies.
Another high-tech executive compared
today's situation to the fate of middleware
in the evolving Internet era. “There
was a huge role for middleware in the
early days of the Internet because companies
were trying to figure out how to
interface older enterprise systems with
the Web. Now those companies are taking
out the middleware and going direct. The
same thing will happen in networking.
There will be a need for 'glue' in the early
days, but at the end of the day, every
point will be a node on the network and
the nodes will be able to communicate
with each other without going up to a
super node and coming back down.”
The potential stifling effect of legacy
business models and cultures is another
obstacle to be addressed by the carriers.
One high-tech executive noted, "I’m still
seeing an enormous cultural hold over
from the old days of a monolithic monopoly.
Carriers are making some progress,
but they don’t show enough agility and
flexibility in keeping up with the changes
and what customers are demanding.”
So what is to be done? An executive from
a device manufacturer pointed to a likely
path forward: “To survive, carriers need
some type of value proposition that deals
with content itself so that it becomes
more of a brand play—delivering the content
that consumers value across different
platforms.”
The importance of collaboration
Accenture believes that delivering a
seamless customer experience over a
common platform will require a distinctive
collaborative mindset. Very few businesses
have a trivergence strategy for the
growing plethora of networked devices
and services, never mind the resources to
execute such a strategy.
Based on our interviews with executives,
the various industry players all see the
value of such collaboration. For example,
one high-tech company executive said,
“We don’t want to have the customer set
up an account with us so that we collect
the money and then pay part of it back
to the carrier. That is a lot more arduous
than using the billing relationship that
the carrier already has established. Any
time a company already has a good
relationship with its customers, we try
to leverage that.”
And, of course, the value of such
partnerships between carriers and technology/
content providers goes both directions.
As another high-tech executive
noted, “I think the financial opportunities
for the carriers lie in unique partnerships
where they can get content, special products,
offerings or rewards—something
that delivers unique and exclusive value
rather than a 'me-too' proposition."
Building mutually beneficial partnerships
with strategically aligned industry players
will be a key to emerging as a provider
capable of making all of these complex
offerings work together. Carriers, software
companies, Internet businesses,
media enterprises and entertainment
conglomerates will be both partners and
competitors from day to day in the networked
world. Choosing the right partner
has never been more important.
Source: Accenture November 2008
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