Last week we attended Vodafone’s Enterprise Industry analyst event in London to get an update on Vodafone’s Enterprise strategy. Vodafone Group’s current Enterprise division, headed by Nick Jeffery, was formed in January this year after the Cable & Wireless takeover and has revenues of £12 billion which is 27% of Vodafone Group’s overall annual revenue.
Key Message
Vodafone CEO Vittorio Colao delivered the keynote to show the board’s commitment to the global Enterprise market. As part of this board commitment Colao is now talking regularly with global CIOs and in a nutshell they tell him they need the following from Vodafone:
- Competitive service pricing
- A global footprint, with one company firmly in the driving seat
- Full global communications service management capabilities
- Unified communications (UC) solutions across applications
- Educating line of business executives on the M2M opportunity
Not surprisingly, these five messages play to Vodafone’s core strengths. Ownership of a large mobile access footprint enables Vodafone to compete on mobile service price. It’s global enterprise unit is approaching global customers with one throat to choke. A global unified core network with global IT functions delivers global service management. A network approach (IMS) to UC enables Vodafone to provide UC solutions across applications. A dedicated M2M business unit with a global network, global platform and global SIM enables Vodafone to move up the M2M stack and provide device management, application services, B2B2C services over the top of M2M and analytics.
Doubling Down On Enterprise
Nick Jeffery followed on after Colao to explain that Vodafone is doubling down on its Enterprise commitment with investing 10-15% of £6 billion from Project Spring over the next 3 years to enhance Enterprise capabilities; Investment priorities are:
- Converged communications
- Exploit consumer-driven investments to increase enterprise reach
- Build or buy to extend fixed coverage to business areas beyond existing cable or fibre footprint
- Cloud & Hosting
- Build scale in Managed Hosting/IaaS by increasing datacentre investment in UK and Germany (phase 1)
- Partner and consider inorganic investment to speed up delivery
- SME
- Complete One Net roll out to key SME markets (One Net boasts 3 million seats now, compared to 2.1 million in March 2012)
- Deliver a consistent, integrated product set including security, cloud-based SaaS and conferencing services
- M2M
- Expand geographic coverage of Vodafone’s M2M connectivity platform (GDSP)
- Develop, scale and integrate data processing & reporting platform to build scale in application services
- Move up the M2M value chain and deliver business intelligence on data to customers
- MNCs
- Add fixed and hosting product capabilities in APAC/MEA to serve targeted MNCs
- Evaluating options to increase ability to serve customers in the US
- Carrier Services
- Establish unified routing capability
Industrial Scale, Mobile Core
Vodafone is at the beginning of a new investment phase in Enterprise. It is refreshing its network, IT systems and sales infrastructure and is ready to use technology and industrialisation of processes and platforms as a key competitive weapon. It will stay away from developing deep IT integration (people) skills like Accenture and Capgemini but is ready to play a larger role in enabling M2M based B2B2C services and provide cloud, hosting and carrier services. Its M2M business unit, albeit small in revenues, serves as the blueprint of a potentially much larger industrial scale platform with a mobile core and sets an example for the rest of the company. With Enterprise service revenue decreasing 4.5% for the six months ending September 2013, Vodafone is making the right moves in accelerating infrastructure and operational efficiency and increasing customer relevance.
