Telco to Techco: Maintaining legacy while embracing future
As VP and MD, EMEA and Strategic Markets for Spinnaker, Martin Biggs is responsible for driving the sales and operational management of SAP, Oracle, and Salesforce services in Europe, Middle East, and Africa. Biggs joined Spinnaker Support after a career of 19 years at IBM where he worked in various sales and leadership roles in IBM’s services business across Asia Pacific and the United Kingdom.
How can telcos maintain legacy whilst embracing the future?
The tech startup boom of the 2010s (and beyond) changed the game for business. These firms, with their bullish determination and commitment to innovation, were the vanguard of the digital-first age, ushering in the modernisation of communications and connectivity, music, entertainment, healthcare, and more. In many cases, these tech firms achieved all this from the ground-up, with next-generation technologies fused into their operational backbones.
Legacy companies – telcos included – don’t have this luxury. These established, global enterprises rely on long-standing infrastructures and well-rehearsed business practices. But in today’s tech-first era, is this enough? Many telcos are realising that their competitive advantage doesn’t just lie in the power of their products and services. Tech-savviness is the differentiator, and to compete in a tech-first marketplace they have to channel that well-known corporate adage: adapt or die.
Enter the shift from a classic telecom operator to a full-fledged technology company, or techco. Telcos looking to embrace the techco identity are demonstrating not just an adaptation to tech trends, but an ambitious vision for the future. They’re used to providing the foundation for tech-first companies – social media and communications apps – to build and thrive upon. But now they want to be more than facilitators of growth; they want to be a part of it themselves.
Which tech developments are key for telcos to adopt to prevent falling behind?
The embrace of next-generation technologies like 5G and AI has prompted ambitious steps forward for telcos in their digitisation and innovation journeys. But as any telco leader knows, simply bringing new technologies on board doesn’t modernise, streamline, or even improve a complex business environment overnight.
Operationally, telcos must contend with complex and evolving business environments and compliance and regulatory requirements, while continuing to provide unparalleled services for their users. They may feel the pressure to harness the rapid growth of tech companies, but they must also remain profitable, secure, and competitive. It’s no small feat to achieve.
At many firms, technology leaders believe that their legacy systems stand in the way of moving forward. Integrating new strategies with legacy systems is challenging, resource-heavy and, of course, expensive. It’s a Herculean task to restructure systems so deeply entrenched in tradition.
Making changes to legacy systems looks like any number of things, from a complete overhaul of OSS/BSS systems to introducing more customised environments and increasing control over operational systems so that they align more closely with digital transformation plans. These changes mean telcos can move towards a future where their IT budgets are spent less on integrating and maintaining systems and technologies and more on competitive activities: future-proofing the business, say, or implementing new technologies and growth plans to ultimately improve the end-user experience.
But this is complex. Budget and resource pressures mean that any fundamental change to operational systems is simply out of the question for many telcos.
Many legacy systems go hand-in-hand with mismatched IT systems and complex support needs. Say a global telco relies on its software vendor for all their support and maintenance – all too often, IT teams spend their time negotiating with vendors for updates and fixes, rather than focusing on business-critical opportunities. In a similar vein, many of these teams end up working in a disparate way, relying on separate software and application stacks differently across business units and locations, without a comprehensive, streamlined, optimised support system in place.
The financial burden of sustaining these legacy systems in this way is substantial. Altering them requires even deeper pockets.
In the face of this challenge, telcos often look to their software vendors for support and guidance. How, they might ask, can the vendor support our firm’s specific software needs, in line with our digital transformation plans, and in a way that helps us reallocate IT resources and budgets?
Unfortunately, the telcos asking these questions are often met with the same cookie-cutter advice: realise CAPEX savings by shifting on-premise systems fully to the cloud. Then, you’ve got more cash to spend on innovation priorities.
Is this even possible if your enterprise is looking to re-platform but relies on enterprise legacy systems? Vendors like Oracle and SAP typically do not offer support for their older software versions on hyper scaler cloud platforms – requiring you to both re-platform and upgrade.
What telcos need, here, is a partner willing to work with them throughout this upheaval. It’s all well and good being told that it’s time to move to the cloud and embrace your techco status, but how should firms go about it? And why don’t vendors offer more in the way of practical support, rather than stating the obvious and leaving telcos to do the hard part by themselves?
How can companies overcome the legacy challenge?
The telco to techco transformation starts with reimagining the software support relationship.
Software support, often provided in-house by the software vendors themselves, is all too often viewed as an add-on. It’s viewed as a necessary service for fixing issues as and when they arise. But we encourage telcos to think bigger, because they deserve better.
Financial burdens, especially for the telcos relying on custom software stacks like SAP or Oracle, can be significant. Often, a significant portion of the IT budget is earmarked for software, with a substantial part reserved for software support. Over the years, the cumulative support cost can sometimes even surpass the software licence fees themselves. Is this a worthy return on investment?
Opting for a third-party software support partner, and breaking free of vendor-imposed constraints, delivers immediate cost-savings. Third-party software support contracts save, on average, 60% compared to the vendor’s own offering.
And more than just cost, it's about value. Third-party software support combines expertise with personalisation, often delivered by engineers and professionals who've previously been on the inside of giants like Oracle, Microsoft, and SAP. They know how to optimise these systems to improve cost effectiveness, and free up resources for innovation plans.
Moving to third-party software support guarantees critical risk management advice and support, enhanced security protections, and a long-term plan for extracting operational value and moving towards a more innovative future. A third-party software support partner will resonate with your business’s transformation goals and plans. It's not about a transactional relationship, but a partnership where the software team is deeply invested in your vision.
And if your vision includes re-platforming, a third-party software support partner will typically support your legacy software versions on cloud services such as AWS — giving you the option to migrate to the cloud without the complexity and added effort of upgrading your stable, functioning systems as well.
What does the future hold for adaptive telcos?
The tech industry is known to innovate, disrupt, take risks, and act boldly. In this way, the telcos who say goodbye to their vendor’s software support are making a bold statement. A decisive move away from the status quo could be the catalyst for change. And there’s no inherent business risk – because your systems will remain supported, secured, and maintained.
The telcos who make this change will quickly realise the benefits. With resources and budgets freed up for more critical projects, IT and transformation teams can explore how, for example, AI, machine learning, and other next-generation technologies can streamline their operations and improve customer interactions. This strategic optimisation can then be channelled into future projects that not only sustain but also expand revenue streams.
For telcos eyeing a techco future, working with a third-party software support partner is more than just a smart business move – it's a strategic ally. And as the telecom industry evolves, these telcos will learn not just how to survive, but also thrive in the digital age. With third-party support, telcos can maintain the essence of their legacy while embracing the promise of the future.
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