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\"From Selling Technology to Selling Value\" presented at the Marcus Evans \"Marketing Trilogy Summit\" in Monte-Carlo, October 2008.

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From selling technology to selling value

From selling technology

… to selling value

Marc Jadoul

Market Development Director, IP Transformation Center

Monte-Carlo, 12 October 2008


Agenda

Agenda.

Change. Innovation. Value.


Agenda1

Agenda.

Change. Innovation. Value.


Agenda2

Agenda.

Change. Innovation. Value.


“ “

It is not the strongest of the

species that survive, nor the

most intelligent, but the one

most responsive to change.

” ”

Charles Darwin (1809-1882)

founder of modern evolution theory


“ “

Frankly,

I didn't

expect

to be so

precise.

” ”

Gordon Moore

Intel co-founder and

author of Moore’s law


Moore s law has been ruling the it industry

Moore’s law has been ruling the

IT industry for the past 40 years.

transistors

10,000,000,000

Dual Core Itanium® 2

1,000,000,000

Itanium® 2

Itanium®

100,000,000

Pentium® 4

Pentium® III

Pentium® II

10,000,000

Pentium®

486™

1,000,000

386™

286

100,000

8086

10,000

80088080

4004

1,000

1970

1975

1980

1985

1990

1995

2000

2005

2010

Source: Intel


Satisfying the need for speed

Satisfying the need for speed.

GPON

speed

1~10 Gbps

VDSL2

>200 Mbps

100 Mbps

ADSL2+

24 Mbps

LTE

25~100 Mbps

ADSL2

12 Mbps

HSDPA+

42 Mbps

10 Mbps

HSDPA+

28 Mbps

ADSL

1.2 Mbps

HSDPA

14 Mbps

ADSL

256 Kbps

1 Mbps

R99

348 Kbps

Analog

56 Kbps

Analog

28.8 Kbps

GPRS

53.6 Kbps

<1990

1995

2000

2002

2005

2007

2009

2011

2015


The odds of bandwidth abundance

The odds of bandwidth abundance.

End-User Price

Price/MByte

~2 €

~ 15 000 €

1 premium SMS

~ 2 €

~ 750 €

20 regular SMSes

~ 2 €

~ 2 €

10 minute mobile call

~ 2 €

~ 0.075 €

40 photos email over dial-up

~ 2 €

~ 0.0015 €

1 movie download over ADSL


“ “

I helped

[Al] Gore

inflate the

Internet Bubble

— I am not sorry.

” ”

Bob Metcalfe

Ethernet pioneer, 3Com founder

and author of Metcalfe’s law.


Metcalfe s law

Metcalfe’s law.

value

cost

# nodes

0

1

2

3

4

5

???

The value of a network is proportional

to the square of the number of its nodes

(while the cost follows a more or less linear function)


Why metcalfe s law is not only about networks

Why Metcalfe’s law is

not only about networks.

f(2N)

f(N)

f(N2)


A new end user is born

A new end-user is born.

Source: NMPFT / Daily Herald Archive / Science and Society Picture Library


“ “

We have grouped our products

and services together under

the Orange banner in order to

guarantee a unique experience

based on convenience and

simplicity to our clients.

” ”

Didier Lombard

chairman and CEO of the FT Group

“ “

We will provide the greatest

satisfaction to our customers

and enjoy the greatest commercial

success if we make every experience

of our services simple and complete.

” ”

Sir Christopher Bland

former BT chairman


“ “

The worst policy of all is

to besiege walled cities.

Sun Tzu (544—496 BC)

author of ‘The Art of War’

” ”

Source: Wikimedia Commons



Blue ocean strategies have become successful

‘Blue ocean’ strategies have

become successful through the web.

Red Ocean

Blue Ocean

Compete in existing market space.

Create uncontested market space.

Beat the competition.

Make the competition irrelevant.

Exploit existing demand.

Create and capture new demand.

Make the value-cost trade-off.

Break the value-cost trade-off.

Align the whole system of a firm’s

activities in pursuit of

differentiation and low cost.

Align the whole system of a firm’s

activities with its strategic choice

of differentiation or low cost.

Source: Kim & Mauborgne

Source: tostee.com


Introducing alcatel lucent s entrepreneurial boot

Introducing Alcatel-Lucent’s

entrepreneurial boot camp.

Venture

Venture

Capitalists

Capitalists

People

People

Internal

Internal

Venture

Venture

Boot

Boot

Camp

Camp

Ideas

Ideas

Decision

Gates

Dating

Event

Experts

Experts

Source: Alcatel-Lucent


The greatest peril in in developing high tech

The greatest peril in in developing

high-tech markets is making the

transition from an early market to

a mainstream market.

Pragmatists

Conservatives

Visionaries

Skeptics

Techies

Early Market

Mature Market

“chasm”

Source: the Chasm Group


“ “

Develop a product/

service mix strategy

that can evolve

over the life cycle.

” ”

Paul Wiefels

managing director of the Chasm Group

Source: Wikimedia Commons


A solution is a combination of products

A solution is a combination of products

and/or services with intellectual capital,

focused on a particular customer problem

and driving measurable business value.

A segment

of one

Customer

Specific

Level of Customer Specificity

Customer

Specific

Solutions

Solutions

Customers

with common

problems

Vertical

Vertical

Solutions

Solutions

Horizontal

Horizontal

Solutions

Solutions

Targeted

segments

Integrated

Services &

Intellectual

Integrated

Services &

Intellectual

Capital

Capital

Targeted

functions

Products,

Capabilities &

Products,

Capabilities &

Bundled Offers

Bundled Offers

Generic

customers

Measurable Business Value

Lower

Higher

Source: ITSMA

Source: Wikimedia Commons


“ “

You are surrounded by simple, obvious

solutions that can dramatically increase

your income, power, influence and success.

The problem is, you just don't see them.

Jay Abraham

founder and CEO of Abraham Group

author of ‘Getting Everything You Can Out of All You've Got’

” ”


The value of a solution only exists

The value of a solution only exists in the

context of your customer’s environment.

Price

Low

High

High

Value & differentiation

focused players

Perceived value

Price

focused

players

Ultimate

failures

Low

Source: OVUM


The ansoff matrix reloaded

The Ansoff matrix reloaded.

Products

Present

New

Present

Market

Penetration

Product

Development

Markets

Market

Development

Diversification

New

Source: Harvard Business Review, 1957


“ “

If you don’t listen, you

don’t sell anything.

” ”

Carolyn Marland

Managing Director of the Guardian Group

Source: bbc.co.uk


Why selling services and solutions is different

Why selling services and solutions

is different from selling boxes.


“ “

We’ll need to

supplement our

well developed

high tech abilities

with abilities that

are high concept

and high touch.

” ”

Daniel H. Pink

author of ‘A Whole New Mind’


In 1998

in 1998

Cables and components

for telecoms and energy

Carrier

infrastructure, applications

and integration services

Enterprise and consumer

CPE and professional services

Integration, operation, maintenance,

professional and managed Services

*

in 2008

Carrier

infrastructure and applications

Enterprise

infrastructure and applications

(*) extrapolation Q2 results


“ “

Alcatel-Lucent partners with

its customers to manage the

complexity of IP*Transformation

and to achieve speed-to-market

with predictable results.

” ”

Mission statement of Alcatel-Lucent’s

(*) Internet Protocol


Ip transformation beyond the boxes

IP transformation ‘beyond the boxes.’

Network

• ‘All IP’ network

• Service Delivery Platform

• Getting rid of ‘stovepipes’

Services

• Portfolio rationalization

• New customers, higher ARPU

• Enhanced ‘user experience’

Operations

• Processes & organization

• IT systems and applications

• Managed services


Ip transformation solution

IP transformation solution.

Cross-domain

Multi-vendor

End-to-End

Business

Transformation

Services

Transform.

Network

Transform.

Stakeholder

Engagement

Consult

1

Maintain

& Operate

5

Design

2

Deploy

& Migrate

Integrate

3

4

Full-lifecycle

Master Integrator

Professional Services


Ip transformation centers partnering for change

IP Transformation Centers.

Partnering for change.


A new business model for alcatel lucent

A new business model for

Alcatel-Lucent and our customers.

Area of responsibility

Before

After

Overall business strategy & planning.

Marketing & sales,

customer services and billing.

Network strategy & planning and

business case analysis.

Network investment sign-off.

Network & OSS design.

Network & OSS build,

integration and migration.

Multi-vendor network

operations & maintenance.

Integration of network & OSS with

BSS & enterprise IT.

Source: Gartner, TNZ, Alcatel-Lucent


“ “

Tying in Alcatel-Lucent’s global expertise

with our marketing and engineering efforts is

helping us get our thinking right about how

we migrate our networks but also about what

services and products we really need to

deliver to meet customer needs.

“ “

” ”

We have considerably

improved our speed to

market and that’s critical for

competing in New Zealand’s

increasingly competitive

communications market.

” ”

” ”

“ “

It’s about value. And we are

seeing real financial benefits

arising out of this partnership.

Simon Moutter former COO of Telecom New Zealand


From selling technology to selling value1

From selling technology to

selling value.

Transformation

Partner

Softco

Equipment Provider

Telco


Don t back away from passion

Don’t back away from passion.

Tom Peters

management guru and

author of “In Search of Excellence”

www.alcatel-lucent.com

[email protected]

www.linkedin.com/in/mjadoul


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