Special vs Custom vs Standard? What is the right strategy?

Let us continue the discussion from last week and build on the theme of Hardware vs Software. The equipment are just the building blocks for a network and the end goal is to deliver services. Services have a “retail” connotation to them and have to be pretty standard. For example a mobile phone connection from one operator vs another cannot be very different. Each offers the capability to make and receive calls and some quota for data, with daily and monthly limits. The way to differentiate in that space is by bundling some services together and there is a lot that goes behind building a brand and delivering quality service. Each operator wants to make money, maximize revenue and reduce cost.

Now think of the network as a building, that the operator builds and then rents out on a per sq ft per month basis. They need various building blocks for construction and two things interplay, selection of materials and the interfaces between these materials. After all you need the most suitable materials for each specific purpose and need to make sure that you can put them all together to create a functional building.

The market changes and new services are required to remain successful. In the last few years through various transformations, voice is no longer the main service offered by carriers, it has all shifted to data bundles. Now the existing buildings need to be augmented / enhanced and modernized to offer these new rentals.

If the networks had been built in such a way that we had everything very badly tied up using custom approaches, one may experience vendor or technology lock-in. We will over next few weeks discuss this particular facet of network building. One must have an ideal mix of custom, special and standard in the network to be able to continuously evolve the network and to always remain at the bottom side of the cost curve as you transform the network. The real trick lies in understanding the right boundaries and creating interfaces that allow you to modernize specific sections of the network without jeopardizing the remaining network.

In the building parlance, one must use steel and cement both based on the portion of the building and in some cases, ready-made pillars could be the best cost infra. But if your minimal block is a floor, you may loose some flexibility. I do hope I am able to put my point across, but if I am not able to make it clear stay tuned and we will develop this concept over next few weeks with some very specific examples and considerations.

See you next week!