Stop Thinking of the Raw Material: The Search For Value (Part 2)

October 22, 2013 by Nigel Back

Data is a raw material. For too long we have been discussing this concept without really listening to ourselves. Coffee is a raw material, but no-one offers customers ‘coffee’ anymore. Starbucks offers a range of coffee products including mugs to drink it out of, cakes to complement the experience, squashy sofas, WiFi and even easy ways to pay and be rewarded for their loyalty.

The communications industry is still a long way from this level of sophistication. We are at the level of offering our customers a large or small coffee. Even then we sometimes get it wrong.

There are other examples that are more subtle. Oil, for instance, is a raw material. We buy oil most weeks, sometimes several times a week. Yet we do not think about oil when we do it, we think we need to fill the car up in order to get somewhere or do something. Such as go and enjoy a coffee, sitting on a comfortable sofa, with access to free WiFi, while writing a blog post (!)

Detergent is yet another. In this case, small amount of additives and aromas are added to turn detergent into shampoo for fly away hair or the longest lasting dishwashing soap.

It is true that our industry has just discovered this valuable new resource (that some even refer to as the ‘new oil’) but we are still treating it as a raw material.

It is not that we lack the marketing skills; it is more that we are still building out the infrastructure to capture the customer’s imagination. We need to implement networks that have the speed and flexibility to offer sophisticated services. And these are being built as quickly as any infrastructure in the world. On top of this we need tools such as the recently announced ‘liquid applications’ layer that SK Telecom has implemented to enable personalized, location and context-based offers. This layer, though, is still in the testing phase.

On top of this, we need the real-time knowledge, control and understanding of what our customers are doing before we can truly offer the level of sophistication that we are aiming for.

Until we have these in place, we will remain in a phase of trying to offer sophisticated services without the tools that support it. It is like trying to pour the coffee with boxing gloves on.

The good news is that the investment is taking place and the concepts that we have been discussing are achievable. It is also true that while this infrastructure is being implemented some innovation is still possible.

Strangely this can be – and is being – achieved by ‘borrowing’ other people’s products. In the same way that we fill up our petrol tanks in order to drive a fast, comfortable or practical car to achieve our goals, operators are now providing the fuel for OTT players. In several cases, we are on the point of turning away from offering the raw material – data – at the most competitive price.

Instead, operators are beginning to offer cheap, easy or guaranteed quality access to the vehicles that we now use to live our lives. Telkomsel in Indonesia is offering multiple applications such as WhatsApp and Facebook Messenger included in their offering. This is leading what is a popular trend across South East Asia. While Europe seems to be lagging somewhat, examples are emerging here as well. Orange is offering free cloud storage, shared plans are emerging and in North America these are now commonplace.

To manage and support these emerging and varied bundles, we can only support and ultimately enable the transition from data as a raw material to data - as a variety of valuable enablers - by making sure that the real-time knowledge, control and support is already in place.