Transformation is a buzzword like so many others that every marketing professional in the industry has jumped upon and, in the fashion of the times, digital has been added to it. However, this isn’t a marketing tag for simply continuing to sell software under a cunning disguise. This is a real transformation that raises real questions, not just for communications service providers (CSPs) but for their suppliers who also have to consider who they want to be and how they’re going to achieve that.

On the facing page there’s a news story about Ericsson winning a €1bn deal with VimpelCom. Putting aside the Dr Evil size of the contract, it’s clear this isn’t a traditional product portfolio sale. VimpelCom, which incidentally has the potential to serve 10% of the world’s population, is looking at a long-term engagement with Ericsson which will see the vendor supply software – and lots of it – alongside an array of services.

Ericsson describes the deal as a global IT infrastructure partnership, network hardware isn’t included, and VimpelCom is talking excitedly about the new digital stack the deal will create. The stack terminology worries me because it draws on the classic idea of an IT stack of functionalities layered one on top of the other. A less-defined concept of pools of IT resources that offer great flexibility is probably a more accurate description of the new IT arena but well done to VimpelCom for making the decision and taking the leap, regardless of what it calls it.

This then is not a normal telecoms software deal and VimpelCom is not looking to replicate traditional activities with its new software. The company wants to push forward with its digital strategy in mobile entertainment, Internet of Things and mobile financial services in addition to communications. The all-encompassing digital stack, it believes, will enable this.

Just as network functions virtualisation is transforming the network hardware business, so too is digital transformation altering the telecoms software business. Both are becoming IT oriented and the change is far-reaching, disruptive, compelling and exciting.

Opportunities abound for companies with excellent telecoms IT capabilities that can develop new approaches to serve this new, yet also old, market. O/BSS specialists have done much of the spadework; now the need is to build on that foundation to create a new architecture for telecoms IT.

You can call it a digital stack if you want, but I’d really prefer you didn’t.

Enjoy the magazine (whether on paper or our digital issue!)
George Malim