The telecommunications industry is vast, with local and global competitors clamouring to produce the world’s best products. With a presence in more than twenty countries, T-Systems — a subsidiary of Deutsche Telekom — is one of the world’s leading wholesale providers of information and communications technology (ICT). With original plans to maximise business success locally, Deutsche Telekom’s expansion of T-Systems into the global arena came about as a result of the evolving capability of customers in the German market.
“We were challenged by our mid-market customers that required a broader scope, meaning we should at least have a Europe-wide service, rather than a single country service.” – Patrick Molck-Ude
When customers and retail service providers (RSPs) started demanding greater networking scope, and with new online channels opening up opportunities abroad, it became clear to Deutsche Telekom CEO Timotheus Höttges that optimising service on a local level still required global reach. So in January last year, he decided to bring in IBM veteran and former T-Mobile VP, Patrick Molck-Ude, to head up the Telecommunications (TC) Division for T-Systems and drive the new global strategy. “I was brought on board to grow the business with multinational corporations,” says Patrick. Patrick first started with Deutsche Telekom when he was appointed Executive Vice President Multinational Corporations of T-Mobile International AG in 2014. Since that time, he has held a number of high-level executive roles within the organisation until being recruited for his latest leadership role. In addition to running TC, Patrick has also served as Member of the Board of Management of T-Systems International since 2015.
Service across Europe
“We were challenged by our mid-market customers who required a broader scope, meaning we should at least have a Europe-wide service, rather than a single country service,” says Patrick. This global expansion of local customers during an era of digital disruption is how the telecommunications (TC) division for T-Systems was born.
“When we looked at our German business, which is crucial to our success, all of our customers in the mid-market segment had grown to have more of an international presence — so they required international networks. We had to change our service to keep those customers, or risk losing them to competitors,” says Patrick. This opened up huge growth potential for T-Systems to drive new business across Europe, and eventually the world.
Services within T-Systems’ holistic portfolio include the secure operation of legacy systems and classic ICT services, the transformation to cloud-based services (including tailored infrastructure, platforms, and software), as well as new business models and innovation projects for the business fields of the future, such as data analytics, the Internet of Things, machine-to-machine communication and Industrial Internet. T-Systems can provide all of this thanks to its global reach in fixed-network and mobile communications, its highly secure data centres, a comprehensive cloud ecosystem built around standardised platforms and global partnerships, and the ability to offer top levels of security.
Connectivity and network access, corporate networks and end-user communications
The T-Systems TC portfolio is divided into a number of different areas: connectivity and network access, corporate networks, and end-user communications. It includes access services for high-performance mobile and fixed networks, and secure corporate networks based on VPN technology, including operations, maintenance, and updates. T-Systems also offers services such as Unified Communications, voiceover IP, and videoconferencing systems on the basis of public and proprietary networks.
“The TC division was driven through the digitisation of business — that shift from traditional IT business into cloud-based services. Now customers require a high quality network, with international reach, strong security controls and added agility,” Patrick says.
After updating their portfolio and optimising all services to secure business in Germany, and subsequently looking to grow business out into Europe in 2015 (the ‘Germany Outbound’ strategy), the next step was to strengthen services within each European region, and flow on services into other parts of the world (‘Europe Outbound’).
"As our customers tackle all the complexity in the market as a result of digital transformation, they would rather have value sellers.” – Patrick Molck-Ude
“We always want to grow at least at the speed of the market — or better, to outperform it, especially on the international side,” says Patrick. “We picked several markets throughout Europe — where existing T-Systems brands were present — to capitalise on the skills and network capabilities we had in those regions. We are ramping up resources there, as well as on the delivery side, the sales side, the presale side, and so on.”
Now considered a key service provider in Europe, T-Systems has begun doing business with select countries outside Europe, like Brazil, Mexico, the US, and South Africa. It also operates in a number of other nations where the company thought it would make good sense to do business — for example, China was considered a good growth area based on T-Systems already featuring established Chinese brand, Lenovo, in its product catalogue.
“Lenovo is a China-driven company, and we are well represented there. We have grown the business with them and we want to continue to grow that business,” explains Patrick. “Our method for growth has been to carry out those delivery capabilities in China and to serve Lenovo customers. Once that element of the business has grown, we will begin to look at other customers in China, note their network requirements, and take it from there.”
Developing offerings for global partners
As evidenced by its Lenovo partnership, the ongoing growth of T-Systems can also be attributed to its range of integrated solutions for customers, which is a service that factors in the unique ICT requirements of each business. It is also one that recognises that no single brand of technology can solve the onslaught of enterprise challenges introduced by digital disruption. Rather than attempting to provide or resell one brand or product type, it developed a whole catalogue of different offerings from global partners, based on its customers’ demands and requirements.
“When we analysed the market we found customers were asking us things like, ‘How can we switch to a hybrid network?’ So we found a company like Akamai, which has Cloud-based services with greater internet security and high-speed data transfers. We took its concept and our concept, and we integrated those platforms,” Patrick explains.
This past year, T-Systems has been busy recruiting partners around the world and procuring their products for its catalogue. Customers can select an offering from those partners, which T-Systems will then integrate into its overall package.
When it comes to mobile businesses, providers have to be specific to a customer’s region to ensure adequate local coverage. So T-Systems utilises the consolidation of leading mobile operators via the Freemove Alliance, which brings together the local capabilities of Alliance partners. “With those providers, we are able to have very good coverage of Europe and even some other partners outside of Europe,” says Patrick. In addition to Freemove, the Bridge Alliance in Asia, and T-Mobile US also mean the company can provide its customers with reliable mobile coverage in 100 countries across the globe.
Always refining network infrastructure
Internally, Deutsche Telekom is constantly refining its network infrastructure. It invests billions of euros every year to ensure high quality service, a zero-outage culture, and reduced latency.
The company also strives to provide the best and most flexible level of service while still offering competitive tariffs. “People want lower prices but high security and agility. Agility is crucial as a lot of customers are acquiring new companies and building up shops; their strategy is reliant on the fact that there is a dependable network in place whenever they open that new door or acquire that company,” says Patrick.
“We are constantly looking at whether we are perfectly aligned to meet customer requirements, whether it’s for mobile or fixed-line contracts,” says Patrick. “There are a lot of things that we are constantly trying to optimise. We’re making sure we are always able
to perform from a portfolio perspective, but also from an infrastructure and delivery perspective.”
The next wave of networking innovation
As part of a commitment to innovation, T-Systems is also working to produce the next wave of networking innovation — software-defined networks. This promises to advance network speeds, increase efficiency and network reach, reduce data traffic, and automate outdated processes, which will free up a lot of time for IT departments.
Moving forward, the company has also gone from a pure selling stance to one of a service-based consultative service. “We are probably the only TC company that has telecommunication services, both traditional and cloud-based IT services, but that can also be a consultant for the customer and provide a tailored, integrated offering,” says Patrick. “Five or ten years ago, we were only selling products to our customers. Now, as our customers tackle the complexity in the market as a result of digital transformation, they would rather have value sellers — people who understand a customer and their unique requirements and challenges, and who listen to their concerns and goals.”
Another exciting new initiative for T-Systems — borne out of the hype around the disruptive sharing economy — is the recent launch of the Next Generation Enterprise Network Alliance (ngena). This new business is operating out of Barcelona and is an alliance between T-Systems and other telecommunication providers across the globe, including India’s Reliance Jio, Korea’s SK Telecom, and US-based CenturyLink. “When I took over the job a year and a half ago I thought, there needs to be something different. You can do this with a ‘me too’ approach like everybody else, or you can go a different way and have fun being disruptive,” Patrick says.
Secure, high-performance global services for international business customers
Still in the establishment phase, this fixed-network alliance will offer secure, high-performance global services for international business customers from 2017 onwards. These days, companies are taking the world by storm with an exciting new recipe for success — one that’s less about ownership and more about sharing. Take Airbnb, it is one of the biggest hotel companies in the world without owning a single hotel room. Likewise, Uber is the biggest taxi company in the world yet it doesn’t own one car. What they do hold in common, however, is excellent service, high usability, and ease of use — everything the modern customer wants.
"Sharing is the new business model. Do I need to own everything to be successful? No. We can share services in the TC industry and come up with a completely different approach.” – Patrick Molck-Ude
“Sharing is the new business model. Do I need to own everything to be successful? No. We can share services in the TC industry and come up with a completely different approach,” explains Patrick. “Taking that into account, we launched this new company, we put it on the greenfield, we made it venture funded, we formed a new management team for it, and it will offer a truly global services to all customers — whether mid-market or multinational corporations — around the world. In the TC market, it’s not important who owns the backbone; it is important that you have best local coverage. So why not take the best local or regional networks and connect them to form one large global network?”
Using the assets of individual service providers, ngena orchestrates end-to-end services and delivers access brokerage. Standardised agile connectivity services and ordering interfaces plus a global service platform built on Cisco Intercloud, with guaranteed service levels and competitive pricing, give ngena its unique selling proposition.To be disruptive and to also remain competitive, Patrick says leaders need to let go of things they may have done in the past and be willing to embrace new concepts and business models. Part of this also means hiring the right talent; people with the right background and attitude. Sometimes you need fresh, driven people from a completely different industry, rather than those from the traditional career path. These people will ask different questions of you, explains Peter, to help you transform your business and come up with new elements for the business, or ways in which to serve the customer.
“If you want to differentiate yourself from the competition, you need to look for the right collaborators and build strategic, long-lasting partnerships,” Patrick says. “That is hopefully the difference I bring as the leader for the TC Division for Deutsche Telekom.”