Orange Business Services: Cautious Maybe – But Sensible

Dan Bieler
Principal Analyst
October 24, 2011

It’s easy to bash incumbent telcos, to count them as being among the losers in the digital revolution. Cloud services players are taking business from telcos in the storage and server capacity space. Over-the-top providers are free-riding on the telco infrastructure. Software firms are eating into the communication business. Regulators are pressing for further price reductions. And to top this scenario, telcos are continuing to undercut each other in price wars.

During a round of executive discussions with Forrester, Orange Business Services (OBS) has shown that against these odds, it keeps a pretty even keel regarding the most hyped topics in ICT, most notably cloud and mobility. OBS is selective in its cloud offerings, focusing on UCaaS and IaaS. UCaaS is a natural extension of its communication business and thus falls into OBS’ home turf. All telcos should see communication services from the cloud as a natural extension of what they have always done.

OBS’ drive into IaaS, meanwhile, looks like a less convincing pitch. Its IaaS offering essentially comprises a virtual data centre offering with virtual firewalls and load balancing. The question is: How OBS can compete against the dominant cloud players in the storage and server space? In the short term, such an approach is conceivable. However, OBS will need to provide a much broader range of virtual infrastructure choices to avoid slipping into a low-margin market segment.

An interesting aspect of OBS’ cloud activities relates to its VPN Gallery offering. This MPLS-based connectivity solution, which is sold both to cloud providers and an end user’s VPN, provides secure access between the cloud and the provider and end user. Its simplicity makes this offering very attractive. Moreover, OBS is clever to turn classic cloud providers into customers with this offering.

On the enterprise mobility side, OBS pursues a comprehensive approach. At its core is a team comprising mobile-focused staff from both its IT and its TC operations. This way, OBS can provide the appropriate customer interface irrespective of whether an enterprise mobility project is driven by the IT manager or a network manager. In conjunction with its relationship with Sybase, OBS is well positioned to address most aspects of current mobile business demand, ranging from mobile PIM to mobile device management. OBS avoids putting too many resourcing into complex application management at this stage, but instead provides a streamlined enterprise app store.

A few days prior to our meetings, OBS announced that it will effectively combine responsibility for both IT and communications under one management position, comprising cloud computing, global mobility, IP advanced services, network solutions, unified communications and collaboration, and SOHO and SMB offers. This move shows that OBS is clearly addressing to market trends.

Overall, OBS does not position itself by throwing shiny new solutions onto the market and creating a lot of noise around them. Rather, OBS is ploughing its way through a field of challenges, keeping a steady pace and never venturing too far away from its natural habitat. OBS sticks to areas that telcos should know best, with common sense prevailing over hype.


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