For those who know me, I don’t like the word “partnership”. Well, at least in the Telecom business. Why, you ask? I worked as an operator when I was very young, I heard the term often but it wasn’t until my time working at Tilson what it meant. I’ve learned partnerships are more like a relationship, you need to communicate, and there needs to be give and take for it to be successful. After Tilson, I went and joined a startup operator and during that time I learned that “partnership” is a keyword used by sales teams to make you feel good about spending money, that they are in it with you. But are they? After a couple more years of being an operator, I had a chance to go on the other side of the fence and join a manufacturer. I spent nearly two years watching the word “partnership” tossed around but VERY few meant it on my teams. I saw greed from all sides, both manufacturing and distribution, it was crazy. However, I vowed early on to be transparent with the people I was working with. I regularly upset my sales team because they were incentivized to sell certain products and those products were flawed but we had a large amount of inventory that needed to be moved. Here is the thing, I came from two different operators and a large consulting firm. I’ve built a reputation as honest, straight forward and to the point.
I didn’t put fluff around it and as part of that at my first manufacturing job, I was asked to teach a little bit about LTE technology and network planning. I was told it would be 20-30 people. It was nearly 300 people for my first-ever event! What I wasn’t told about. I wasn’t told to have a filter so I don’t upset another manufacturer or distributor of the product. Instead, I built a slide deck with some training material and had a very interactive session with the people. Quite frankly, I had the crowd craving for my next opinion, my next answer. It was something I hadn’t seen before. These people don’t know me, why are they hanging on to my every word? Come to find out, it’s my honesty, my direct answers, and my willingness to break the rules (however, I didn’t know I was breaking these “sales rules”). One operator came to me after the event and said finally, we have one of us working on the other side! It was at that moment I built a reputation people could count on. I was proud of that and stayed on that path.
I say all of that as a segway into the meat of this post. I wouldn’t bow to the wishes of certain folks. I was asked to lie on more than one occasion for sales but I’m not going to compromise my integrity but more importantly MY “partnerships” to do that. So we agreed to part ways.
One of the largest issues I had was the SaaS model. Now, understand this. The SaaS model makes sense for some services but more and more manufacturers are not listening to their network operators (NOs). Where you do all think the “Open” movement is coming from? NOs are tired of the fees, the gotchas.
The subscription model has swept across industries, offering convenience and predictability for consumers. But is it the right fit for network equipment? Manufacturers pushing recurring fees to unlock features or access seem to believe so, and frankly, it’s déjà vu for NOs.
Remember Proxim and Alvarion? These once-prominent players charged for additional functionalities, leading to customer frustration and ultimately, their demise. Now, history appears to be repeating itself.
Instead of partnering with NOs in growth, this subscription-based approach threatens to squeeze operating margins even further. Imagine buying a car with only basic features, and then paying extra to unlock the steering wheel or brakes! Absurd, right? Yet, that’s what some equipment manufacturers expect NOs to accept.
Here’s why this model is flawed:
- It stifles innovation and growth: NOs need flexibility to adapt and offer new services. Locked features hinder this agility, preventing them from capitalizing on emerging opportunities.
- It breeds resentment: Imagine customers paying a premium for equipment, only to discover essential features require additional fees. This erodes trust and loyalty, pushing them towards competitors.
- It fuels rate hikes: With shrinking margins, NOs might be forced to pass on costs through higher service fees, ultimately impacting end users.
The solution is simple: Focus on building strong partnerships. Offer competitive hardware pricing with the essential features needed to run a network effectively. Let innovation drive value, not recurring fees.
Here’s what NOs need:
- Transparent pricing: No hidden costs, no feature lock-in. A clear picture of the upfront investment and future expenses is crucial.
- Open ecosystem: Interoperable equipment allows NOs to choose the best solutions for their needs, fostering healthy competition and innovation.
- Joint investment: Collaborate on developing new technologies and solutions that benefit both parties, driving industry growth.
Remember, NOs are your partners, not just revenue streams. By working together, we can build a thriving network ecosystem that benefits everyone, not just the bottom line. Let’s move beyond the subscription trap and focus on sustainable growth through collaboration and fair pricing. Do you accept this challenge or should we wait for history to repeat itself?