Catching the Digital Transformation Bug

by Robert Bell

New York City, NY, March 3, 2022--The consulting firm Capgemini and the MIT Center for Digital Business first coined the term “digital transformation” way back in 2011.  They defined it as the use of technology to radically improve performance or the reach of businesses.
That year, 2011, is about a century ago in Internet Years.  And here in 2022, the teleport and satellite industries are finally prepared to take it seriously – meaning, to make serious and continuing investments in technologies to transform their own businesses and those of their customers.  

As profiled in How to Profit from Customers’ Digital Transformation, a recent WTA report, the pursuit of digital transformation is hardly uniform across companies. It is also less the result of a plan than an ongoing evolution driven by the rollout of technologies that make operations more efficient.  But – and here's the important part – even skeptics of its potential are moving forward for fear of being left behind.

“That’s Wonderful!”

Some operators find themselves pushing their reluctant customers to transform themselves.  This can take the form of providing digitally enabled services to customers before they realize they need them.  Other customers need little encouragement but have trouble identifying where to focus their efforts.  “They say ‘we want more digital tools,’” one executive noted, “but when we ask what they want, they have no answer.  So, we have to come up with ideas.  The good news is that they usually say, ‘That’s wonderful!’”

What are executives looking for from their investments?  Operational efficiency, flexibility and scalability are the biggest drivers.  Simply put, digital technology and the use of cloud computing enable companies to deploy services more quickly—in hours or even minutes rather than days or weeks—and scale up or down as business demands dictate. That’s high value to businesses operating in unpredictable times. 
A large component of digital transformation is virtualization, whereby purpose-built hardware is replaced by software that runs on the cloud. That enables applications that previously required racks and racks of expensive, heat-sensitive and power-hungry equipment to be run on commodity servers from almost anywhere using a laptop computer. 

Probably the biggest driver, however, is the sheer availability of ridiculously powerful tech that can be had without major upfront investment.  The cloud “as a service” model slashes risk and encourages experimentation.  “There’s an explosion of ideas and innovation that can be achieved now that couldn’t before because technology is putting lots of computing power anywhere at affordable price,” said one teleport executive. 

But Will It Pay?

The executive interviewed for the report believe that digital transformation will ultimately bring new revenues, either by reducing prices to levels that attract new customers or by letting operators easily bundle in value-added services such as information security and data compression.  They are focusing investments on automating media playout, AI in the NOC and hardware virtualization, including end-to-end digitization and virtualization of the radio-frequency interface.  The biggest vision involves rethinking the entire teleport model: automating service provision to the point where there is little to no need for human interaction with the customer.  In this scenario, customers would use the operator’s teleport infrastructure to create their own software-defined wide-area networks, internet backhaul services or VSAT networks.  

More mundane gains are also expected.  They will come from saving travel time and costs through videoconferencing, from lower power consumption by virtualized hardware and from focusing people on higher-value work while automation handles the routine chores. 
Whether the most ambitious visions are realized, operators are already offering self-service portals that make it easy for customers to sign up for new services, arrange data transmission and secure access and rights to sports programming.  “It’s like shopping on Amazon,” said one executive, “but for content and services.”  

Getting Ready for the Future

The industry’s future in space is the software-defined satellite, which can be reconfigured on the fly, as well as multi-orbit services in LEO, MEO and GEO.  To fully capitalize on these capabilities, ground networks need to be software-defined as well.  “As they move to software-based infrastructure, teleport operators can take advantage of these satellites and monetize their capabilities,” said an executive.  “As they drive down the cost per bit, they open new markets.  

Teleport operators “have to build an environment that follows the world of satellite,” said another technology executive, noting the unprecedented number of LEO and HTS satellites putting hundreds of terabits in the sky. “The scale is daunting,” this interviewee said. “If we don’t go digital, we won’t be able to scale.

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Robert Bell is Executive Director of the World Teleport Association, which represents the world’s most innovative teleport operators, carriers and technology providers in 46 nations.  Robert Bell has over 30 years of experience as an association manager and business consultant for both nonprofit and profit-driven and organizations operating in the IT outsourcing, telecommunications, and financial services industries. He has led business development missions and conducted workshops and Master Classes in the Americas, Europe and Asia. He can be reached at: rbell@worldteleport.org  

How to Profit from Customers’ Digital Transformation" is available for free to members and for sale to non-members at:
https://www.worldteleport.org/store/viewproduct.aspx?id=19289475

A webinar based on the report is available free on demand at: https://www.worldteleport.org/general/custom.asp?page=Webinars