Microsoft in Telecom /10.05.2007

Andrew LUND, Communications Sector Director, Microsoft CEE, introduced the services Microsoft has to offer to telecommunications operators, at the Communications Day in Bucharest on May 10, 2007.

These services are based on a new concept in the industry: Software as a Service. Microsoft also hopes that once the convergence between telecom and media will take over in these two industries, this will blur the traditionally high barriers to entry around telecom operators and their suppliers.

Andrew LUND, Communications Sector Director, Microsoft CEE:

“Communications sector is about 5% of the turnover that Microsoft makes in the world. If you think we are a 50 million dollar company, it may not seem much, but it is a very important strategic part of our business. It includes telcos, fixed, mobile, cable and it also includes media and entertainment companies. So we work a lot with big TV companies, big radio companies, the idea being that convergence of media with telecom will happen.

There are software solutions which we produce – software solutions that we produce that help the telco operators function more effectively while reducing cost. An example of that could be in customer care, database consolidation, could be in OSS/BSS. So these are kind of heavy bucket Services Oriented Architecture solutions.

mySpace and KPN are two examples of customers where we helped drive bottom line efficiency.

And it was interesting when Romtelecom CEO said this morning that they is investing 200 million euros to modernise their infrastructure. If you have a Cisco sales man in front of you, that is not a lot of money.

So what we are trying to do is enable the CIO or CTO office to spend less money on running the business – consolidating databases, running customer care more efficiently, using software programs to drive down costs, so they can help the telco operators focus on driving their revenues.

But I am not going to talk about that today. I am going to talk about top tier, which is about enabling telcos increase their top line revenues.

The changes in technology, convergence of voice and date, fixed and mobile, talked a lot about that today, price based comoditisation. One thing is for sure: the more competitive the market, is the lower the prices go down. Which is good for consumer, is good for the businesses: people paying less for their telecom services.

It is hard for the telco operators, because they then have to add more value, add more differentiation in the services that they offer today.

So what are we doing about that?
This presentation slide right here:
At the bottom you can see the way we communicate with people – it could be consumers or it could be businesses – from PC to TV to mobile devices. It is ubiquous already.

What we think is happening is around the middle cloud there – you know telcos like to talk a lot about clouds, so we put a cloud as well – and that is about meshing the services that you provide today. It could be ringtones. Meshing up things that we provide could be like Hotmail. Meshing up things like third party companies provide could be something like iTunes.

And of course there is the OSS/BSS services that make these all work together effectively and the billing engine that drives the relationship with the customer.

All these different areas work together and what we are trying to do is build a framework solution that enables them to interact together:

In the middle you have the service provider, the telco or the media company that is offering services on a hosted model.

On the right side you can see the Microsoft that we are now offering as a Software-as-a-Service model. This is a new concept and it is really taking effect.

BT is probably our biggest customer in the software as a service model in Europe. And they have got many thousands of customers buying a lot these products.

One of them is hosted CRM where a small company – 50 people or 20 sales people – they do not need to have a big IT department running a CRM solution. So they pay like 25-30 euros a month per user:

In the consumer segment, it is more or less the same model, excerpt the products change. So they have got Microsoft TV. Microsoft TV is actually the front end.”