Are TELCOS Ready To Go Head-to-Head With System Integrators?

August, 2020

Takeaways from Orange Business Services Analyst Day, July 8-9, 2020

Businesses have realized the importance of technology in differentiating themselves from competition. The COVID-19 pandemic has brought this importance to the centerstage as business sustainability becomes intrinsically intertwined with the digital maturity of the organization. The next wave of technology investment will come from businesses that are preparing for the future. And they will require service providers with a business-to-business mindset.

Orange Group, and Orange Business Services in particular, have been accelerating the transformation of its B2B segment through the convergence of telco and IT services. One critical theme this year for Orange was to continue to embrace its network roots and to build on top of that strength to develop integration services to make it a network-native digital services company.

The future is enterprise data powered by next-gen networks

Avasant’s research shows that the growth rate of data being generated and consumed by enterprises far exceeds that from individual consumers. As shown in Figure 1, the adoption and investment rate for business and data analytics solutions has risen steadily over the past four years. Very soon, the data generated by enterprises will be higher than those generated by consumers. If anything, the current pandemic has also forced enterprises to identify and leverage data streams to sustain their business and to look for alternate avenues for growth. We expect a number of changes in business models to persist even after the current crisis is over.

BusinessDataAnalytics - Are TELCOS Ready To Go Head-to-Head With System Integrators?

Service providers will need to evolve to address this change. This is especially true for those providers that come from the B2C world, such as telco providers.

Telcos have long realized the potential growth in the B2B segment versus B2C and have been trying to change gears and build upon their voice and data services and expand to managed services, going head to head with system integrators. However, this transition comes with its own set of challenges, demanding a fundamental shift from a capital-intensive model to an integrated service model that will require a consultative approach to sales and solution delivery.

As a network-native digital services company, Orange has been on this path and emphatically outlined its Engage 2025 strategy, and its fundamental goal of having 55% of revenue coming from IT services and next-gen connectivity by 2023, is effectively changing the core DNA of the company. It will take a lot to get this done, and Orange is progressing on three pillars:

  1. Connect: Convergence of network and cloud
  2. Innovate: End-to-end digital services
  3. Protect: Securing cloud and OT/IIoT environment

Connect: Convergence of network and cloud

With the increase in the remote and roaming workforce and the use of software-as-a-service (SaaS) in the current pandemic, data is no more confined to the boundaries of the enterprise network. It has moved from the data center to the cloud. Hence, there is a greater need for the convergence of wide-area networking (WAN) or local area networking (LAN) into a single, cloud-delivered service model.

This trend aligns with Orange’s network strategy, which has transitioned from being a pure network partner to a zero-trust network partner to a cloud-native network partner managing multi-cloud environments. As an organization, it has grown from developing legacy systems and apps in data centers using MPLS to cloud infrastructure-ready apps driving access and speed. Further, it doubled down on the cloud by expanding the scope from virtualization to cloud-native apps and driving multi-cloud orchestration.

It plans to further build upon what it has achieved and leverage its telco assets to build on IT infrastructure, calling it out as one of its three goals for 2025. It works on a framework that integrates network systems with cutting-edge technologies such as cloud-based solutions (multi-cloud and edge cloud) to develop a new standard for networked IT services, enriched connectivity, and unified communication. This extends its reach with new offerings in SD-WAN, 5G, and smart mobility, internet of things (IoT), and digital workplace.

Innovate: End-to-end digital services

To streamline the digital transformation process, enterprises prefer collaborating with service providers that offer integrated services, including networked IT, security, and communications services built upon the cloud. This setup brings agility and security as required by enterprises to manage fluctuation in demand to support the remote workforce. Hence, enterprise conversations with technology providers no more revolve around IT architecture but the business challenge.

In the aftermath of COVID-19, enterprise digital adoption has not only received a shot in the arm, but also the nature of enterprise requirements has changed. Companies are demanding faster migrations, down from years, to months, or even days. They are also demanding better commercial terms and conditions because of the recession in CIO budgets.

Orange has already laid this foundation and has developed critical skills across four domains, which it has identified as its growth drivers. These are:

  1. Cloud, which includes multi-cloud and edge cloud (2,400+ cloud experts),
  2. Digital & Data, which brings artificial intelligence and real-time accessibility to the data (3,900+ AI and digital experts),
  3. Cybersecurity, which is driving cloud and OT/IIoT security (2,100+ cyber defense experts), and
  4. Smart Mobility Services, which combines mobility and IoT services (750+ smart mobility experts).

To deliver an end-to-end value proposition, it’s one of the three goals for 2025 is to scale on integration and services capabilities. It is integrating its newly acquired subsidiaries, redefining the engagement model and go-to-market strategy, and shifting from managed infrastructure to business outcome-based offerings. It leverages new technologies such as cloud, artificial intelligence including AI Ops, data analytics, internet of things (IoT), and edge computing, to offer an integrated solution, co-innovating with its customers to address new opportunities. Some of its clients, where it has developed integrated solutions include Aurecon, Akzo Nobel, Mars, Midea, and McConnel Dowell.

Protect: Securing cloud and OT/IIoT environment

With increasing pressure on governments and businesses to achieve business continuity and productivity in the current pandemic, the focus is back on how to enable remote working and collaboration while maintaining security.

As companies increasingly leverage virtual machines (VMs) running in the cloud to support critical workloads, multicloud security has become of more importance. This proliferation of the cloud environment has also shifted the focus away from data to identity, which has led to an increased need for governance of identities and access rights.

As traffic moves to home networks from corporate networks, Orange Cyberdefense has rightfully pivoted its security strategy around three dimensions: Managed services, flexible commercial models, and adapted solutions including natively secured Desktop as a Service (VDI) remote access.

As an operator, Orange has access to data through its vast fiber network that puts it in an advantageous position to monitor threats and take proactive measures. Hence, it not only supports end-to-end security but overlays it with a threat-driven approach. This is complemented with a flexible commercial model that goes beyond per device/EPS/IP/FTE type of model to a complete OPEX based, pay-per-use, and try-and-buy models.

Orange Cyberdefense has come up with new ways of threat detection and response, whether it is about securing endpoints or the network and ensuring cloud migration with zero trust, irrespective of the way the user connects to the cloud in a multi-cloud setup. This also includes giving CISOs the right tools to communicate more effectively with top executives. It introduced its Boardview dashboard, which helps provide measurable outcomes through a single pane of glass for effective risk management.


Orange Business Services is on the right path, and the progress over the last year is heartening. As it is running with a five-year plan and considering it already has laid down the foundation in 2019, it’s now about putting everything together to accelerate the journey.

We believe this increased focus towards the B2B segment for Orange Group with its Engage 2025 strategy comes at an opportune time when enterprises are scouting for more of an integrated technology partner that brings business outcome from multicloud, artificial intelligence, data analytics, cybersecurity, and network capabilities. Successful integrated technology providers will be those that help enterprises layout a future roadmap around the digital workplace, underpinned by connectivity, innovation, and security.

Analysis by Gaurav Dewan, Research Leader at Avasant.