Erwan Ménard: the industry requires a new type of vendor



It’s a solutions powerhouse for customers, said Hewlett-Packard when it launched a new division for telecoms and media in February 2009 and put a former Alcatel-Lucent executive, Erwan Ménard, in charge.

CMS stands for communications and media solutions, and is very similar to the old name under which HP faced the telecoms world: that was communications, media and entertainment.

But there’s more than just a name change. The old brand was a sort of overlay of a number of divisions of the group, each of which worked more or less separately, while Ménard is in charge of operating a full business unit with profit-and-loss responsibility.

There are many familiar faces within CMS; which includes the old CME as well as HP’s OpenCall software business unit, and the global consulting and integration practices as far as they operate in the telecoms and media markets.

Six months after Ménard took charge of this new division, he is keen to emphasise HP’s long history and experience in the sector. “HP has been very active in the telco space for the last 30 years,” he says.

So what’s the difference between HP and the traditional equipment vendors in the industry? As an Alcatel-Lucent executive until recently, Ménard has a better idea than most.

“The way the industry is evolving right now requires a new type of vendor. There are some business values that are core to HP that resonate with the market now,” he says. HP’s founders “thought technology could change the world, but HP doesn’t have all the answers.”

Products plus consulting

So being able to deal with partners in the industry “is hardcore DNA for HP”, he says. “That is something that is not common elsewhere in the market.” And the mix of products with consulting and integration also marks HP out as different, he adds.

“These are attractive to network equipment providers when they seek partnerships with us.” There are sectors that “are not for HP”, while there are others — such as data centres — which are not for telecoms vendors.

“There are two kinds of relationships,” he says. One is technology supply, where HP supplies IT hardware to vendors for use in network equipment. “The network equipment providers bring a lot of value. It’s much more than customising IT gear for the telecoms world.”

HP supplies both hardware and software to them. “We’ve done that for years.”

There’s a second kind of relationship, “which is developing”, is more of a partnership with network equipment companies.

That is what is involved in the relationship with Alcatel-Lucent announced in mid-June 2009. “This is a non-exclusive alliance to put the network transformation capabilities of Alcatel-Lucent beside the telecom solutions and data centre transformation capabilities of HP,” he says.

It’s aimed specifically at large IP transformation projects, which impact the data centre operation “each and every time”. The deal extends “as far as outsourcing, if needed”, he adds.

This kind of relationship is expanding. So are there other negotiations taking place? HP has the ability to build partnerships,” he says, “as long as we create value for our joint customers. That’s something we know how to do. You need to understand both worlds to make a difference.”

Portfolio potential

In his first few months in the new job he has been taking a close look “at the potential of the portfolio that we have”, and “identifying where we want to invest”. And doing that by spending three weeks out of four visiting customers.

“I’ve been doing an inventory of everything we’ve done — all the great work we’ve done with customers in Japan, in Latin America, and everywhere. This is a consulting-driven business.” So it’s fundamental to identify the things the company has done “and then blueprint and replicate”.

His point is that a customer in one part of the world may need something that has already been delivered to another part of the world. Without a unified operation, that may be missed. Were there no links before across the consulting operation? “There were but we’re now making that totally systemic,” says Ménard. With a global practice a consultant in Malaysia “can talk to another consultant in Italy who did the same thing”.

It’s a product approach and a consulting approach. “You need to be on the ground.”

And the other priority? “People. We are a people business. The weather is tough. In 2009 people are under huge pressure. But we are transforming ourselves — people with a product background and people with a consulting background. We are a solution powerhouse. What does that take?” he asks. “The people aspect, the transformational aspect. That keeps me awake at night.”

He runs through a list of products that HP has in the industry — the first off-switch home location register to be implemented purely in software, he says. “We had to convince operators to use that. That was ten to 15 years ago — and if you look today I would name Verizon and AT&T and Reliance in India as key customers for that platform.”

In addition “we’re a very important vendor in signalling, which is a key foundation of our telecoms industry contribution”,  and “much of the SMS traffic is powered by a software stack provided by HP”, he adds.

Deep roots in telecoms

And that’s without considering all the hardware brands in HP’s ancestry that have been familiar names in telecoms. “So HP has deep roots in the telco world,” he says.

That means the new business unit already has relationships with service providers across the world — providing software, consulting, working on integration projects, and the rest.

“The approach we take is a solution business model with a portfolio of solutions, that are made of our software, referenced third-party software and our consulting and integration capabilities.”

This all comes on top of “the core hardware offering of HP with a more industry specific flavouring that is trying to address pain points with a concrete solution”.

In the past, the software and integration were in separate divisions, and the consulting was “run on a local basis”. Now “there is a global practice approach”.

Ménard is someone who has been recruited by HP straight from the telecoms industry. He’s French, from Brittany — that remarkably telecoms-rich region of north-western France. He studied at Télécom SudParis, a graduate school of the Institut National des Télécommunications based in south-eastern Paris.

He’s still young: he was one of the Global Telecoms Business Forty under Forty in the May-June 2009 issue. He has spent much of his career so far at Alcatel and — since 2004 — Alcatel-Lucent, where he became president of global support at the convergence business group, in charge of worldwide operations.

For Alcatel-Lucent he was based in Belgium but is now spending most of his life travelling around HP offices and customers around the world, though when he can he has weekends in St Malo back in Brittany, where he sails a 28-foot boat.

Now, with his unified group in HP, he has a portfolio of four main areas. “The first is around service delivery, including enablers that come on top of the network. Subscriber data management is part of that.”

Service delivery framework

It includes HP’s service delivery framework. “We’ve picked the spots where we want to develop our own software and we want to select best-in-class software from the industry, and we want to package that into an offering that includes off-the-shelf software but also consulting and integration.”

Rich communications come within this service delivery category, too, “meaning a lot of voice and video-driven applications from selected partners”, which are offered on top of the company’s in-house media server technology.

“A typical example is the consolidation of all the IVR — interactive voice response — we have done for a very large Indian carrier,” he says.

“A lot of Indian services are voice-driven, so they are developed on IVR capabilities, says Ménard. “This carrier has harmonised all its IVR capabilities across the network to offer one interface to third-party application developers.”

That means all these developers use the HP environment “and can build applications with this platform”.

The second area in Ménard’s united empire is OSS, including service assurance. “We are injecting into our telecom software — which goes a long way back in history — enterprise IT software, to facilitate the bridge between IT and telecom in the way you operate the network. Because more and more of your network looks like an IT network.”

The third piece of the CMS portfolio centres on customer intelligence, including billing mediation. “We are number one in billing mediation,” he says, citing a recent analyst report. “That allows us to talk with customers about applying policy management to call records and make the charging more specific to subscribers or the service.”

This unit includes fraud management, “with 90 deployments worldwide”, and data retention: in Europe in particular operators are now required to store data about calls. Many operators started building systems in-house “but with the explosion of the data this has become a headache”, he says. “We’ve productised a piece of software that allows that to be done more efficiently.”

Digital media companies

He’s getting to the end of his catalogue: “The very last domain is digital media — both targeting telcos when they want to become media companies as well as conventional media companies,” says Ménard.

Some of that includes the process by which broadcasters have “gone tapeless”, putting their storage of content on to servers, “using the HP storage offerings, with software to make the workflows more efficient”, he says.

The portfolio includes TV control rooms — but the advent of IPTV has made the task a lot more challenging. “We designed a complete end-to-end quality of service solution. We are able to diagnose things from the end customer’s standpoint, from the distribution network’s standpoint and from the source injection standpoint, and we can diagnose where the problem is coming from.”

That’s the portfolio of CMS as it was created in February — but how does Ménard see it developing, and what are his priorities? User experience, he says: “giving the service provider the ability to make your experience more personal”, and that aligns with the service delivery framework and other areas.

“Beyond that we’ll continue investing in any enabler that will make the experience more personal.”

But there’s also a real focus on the convergence of IT and telecoms “in the way you operate the network”, he says: “next generation OSS.”

OSS is usually split into “two piles, service assurance and service fulfilment, and the service assurance world has been driven by cost reduction for ever”, he notes. “If you can move that one step forward in service assurance — that’s the goal we’re setting ourselves.”

He gives an example: take a bank relying on a wireless network to connect its cash machines. “When something goes wrong, either at the application level or in the VPN or at the network level, you want to get a call immediately.” That means there must be an automatic correlation between network events and the applications in order to generate a trouble ticket and produce a call to the customer, the bank.

Integrated IT and telecom

That means you need an integrated IT and telecom approach. “It’s not one or the other. You really need to be crossing the two worlds. We’re going to continue investing there, making network operation much more customer-experience impacting.”

And there’s a third sector for investment: enabling service providers to offer “well, anything as a service — software as a service, infrastructure as a service”, he says.

“The vision we have is that this cloud computing promise will happen only with the service providers on board — because the prerequisite is the quality of experience and service, which very much depends on the last mile, which is in the control of the service providers.”

At the same time “it’s a tremendous opportunity for them to sell other things than communications services”, he says. What other thing? Software as a service, infrastructure such as data centres as a service — with the option to provide for peaks, he suggests. “That requires that you’re able to manage a data centre, which is not really a natural thing for a telco, but it is for HP. We know what it takes to manage a data centre.”

Again, this is at the crossroads of IT and telecoms, he says — but are those two roads really joining, so that in years to come it will be impossible to tell which is which? “It depends on the end user,” says Ménard. Look at the iPhone, he says, as a shift in what people expect today from telecoms.

Compare that with the first GPRS phones, transmitting at a few kilobits, “and we told the market that the internet was going mobile”, he smiles.

But there’s convergence at a deeper layer, too, he adds. Those writing OSS now need to know the business processes of both the telecoms area and IT “because the boundaries are blurring”.

And look at subscriber data management. The first HLRs were switches converted to be databases, he says. “Then HP proposed a solution using industry-standard IT with dedicated software.”

Every carrier stores data about its users across the network in many different places. It’s expensive and inefficient. Hutchison 3G in Austria came to HP to ask about a better way of doing it. Some software and consultancy later and HP has provided a federated database for the customer.

That mixture of software and consultancy “shows the IT genes of this company”, says Ménard. “We come with a strong telecom knowledge with an IT consulting type of behaviour and we provided a blend of off-the-shelf software and ad-hoc architecture.”

Field-connected engineering

And this — he calls it “field-connected engineering” — has a deeper implication for HP and its customers. “We work with a customer, we come up with a solution, and then we are able to productise it.” The company can sell similar solutions elsewhere “and everybody’s going to benefit”.

He calls it a process of “blueprinting” the service or product, so that it can be offered to other customers. These products don’t emerge “from product managers in ivory towers”, he says: “It’s very close to the customer. What can we do together? We productise that and offer it elsewhere.”

Does HP take this further, so that instead of selling a product to a customer it runs it for the company? Managed services, or outsourcing, in other words. “Yes, we are looking at this area,” says Ménard, especially now that we have the EDS capabilities inside the HP family.

EDS, of course, is a large IT services company — with origins in General Motors — that HP bought for $13.9 billion in 2008. It is now a business group in HP, and retains its EDS branding and much of its EDS management.

“Our genes are about designing and building a solution, and we are now moving into running the solution for you, Mr Customer. That’s an area that is under development.”

Projects are being put in place, “based on individual needs from customers”, he says. “We have instances where we are on their premises and do it for them, and instances where we run it for them.” And EDS has many examples of outsourcing.