Interview: Thierry Bonhomme of France Telecom Orange

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In the March/April 2008 issue of Global Telecoms Business we looked at how BT manages its research and innovation. In this interview Thierry Bonhomme, head of research and innovation at France Telecom, discusses Orange's strategy to use its labs in Europe, the US, the Middle East and China, to be embedded in the national ecosystems where the company does business

Thierry Bonhomme

Thierry Bonhomme: a very Darwinian way of working at Orange Labs

There was a moment when Thierry Bonhomme appeared to be saying that one of the most important factors in telecoms innovation was the law of love.
But that was a stupid misunderstanding by Global Telecoms Business. It's not the loi d'amour that he was talking about, but the loi de Moore — more familiar in English as Moore's law — that Bonhomme, senior vice president for research and innovation at France Telecom, and his colleagues have to take into account.
Moore's law, as defined by Intel founder Gordon Moore many decades ago, says that every 18 months the price of silicon circuitry halves and the power doubles. "We have exactly the same law in our industry," says Bonhomme. The result is the commoditisation of telecoms.
At the same time there's globalisation — not just of the vendors, from handset makers to equipment makers, but also of the operators.
Orange, France Telecom's worldwide brand, is testament to that: the brand was invented in the UK in the mid-1990s, became part of France Telecom in 2000, and is now used by its businesses in France and throughout the world.

A bigger playground

"Our playground is becoming wider and wider, because of IP and the impact of technology, which brings true convergence," says Bonhomme. "Globalisation and commoditisation are factors in that."
It's a tough world, he's ready to admit. "The playground is wider and wider as we looking for ways to add value to the customer," he says. "We consider the customer at the centre of the organisation including innovation in general and R&D. That is the main lever — it comes from globalisation and commoditisation."
It is the same for the other competitors in the business, other operators and, for example, handset makers such as Nokia which are trying to sell services on top of their phones to operators' subscribers. Bonhomme shrugs at this competition: "We are adults and we are components of this Darwinian world."
Bonhomme, who was appointed to his role in charge of R&D at the end of 2006, is based at the main Orange Labs in the south of Paris — the headquarters of all the Orange Labs owned by France Telecom around the world.
Bonhomme reports to Georges Penalver, the group's head of strategic marketing — a revealing reporting line. Time was when heads of R&D ran their own labs and told the marketing guys what was coming off the benches and going into production.
He has been with France Telecom for most of his career since 1981, except for a short spell running Idate, the research institute based in the south of France at Montpelier. On his return he ran the company's operations in Grenoble and then Marseille before heading distribution to business customers.
So he's not a detached scientist or engineer. And his lab is very different in style from BT's research and innovation headquarters at Adastral Park, which is close to Ipswich an hour or so from London in the east of England. Orange Labs is in suburban Paris, at Issy-Les-Moulineaux, at the southern end of metro line 12.
And Orange Labs is very clearly part of Orange: it is a corporate building, with the familiar bright square logo above the main door, leading to a reception that guards a maze of staircases and offices. Adastral, by contrast, is a sprawling campus of buildings, built on an old airfield, housing not only BT but several spin-off companies.
The international growth of France Telecom since 2000 is reflected in the growth in the network of labs beyond the Paris headquarters.
"This has all impacted the organisation of innovation," says Bonhomme. Initially all the company's researchers were French, "which is no longer the case today" when "we have 1,000 people outside of France".

Silicon Valley

There are US labs at the twin centres of the North American high technology industry, "in San Francisco because of Silicon Valley and the social networking activities", and where Orange can be part of the ecosystem of "innovative companies, universities and the big, big companies", he says.
In Boston, Orange Labs is in the middle of what Bonhomme calls "Bell Labs history" as well as MIT and the East Coast advertising community. "IMS and Web 2.0 are two main topics we are working on. This is probably the best location to be."
In Asia Orange has labs in Seoul and Tokyo, where staff work on the future of 2D and 3D screens, and on multimedia and robots.
"In China, we have our largest lab outside France with more than 130 fulltime employees in Beijing," says Bonhomme. They are in close touch with "all the Chinese activities", he says, including manufacturers and operators.
"The future of standards will be strongly influenced by Chinese entities — operators or vendors. That's the future of the market. You can't consider that you can play without them."
It's a revealing observation — echoing something said earlier by Mike Short, R&D head of Telefónica O2 Europe during a Global Telecoms Business roundtable held at Mobile World Congress in February 2008. "China is the largest mobile market in the world by customer numbers. We need to know what the China roadmap is," said Short at the time.
And so France Telecom, for similar reasons, decides it's worth having 130 staff in Beijing.
There are smaller labs in Spain, the UK and Poland — "with a very deep interaction in the markets where they are located", says Bonhomme. "They are there to support and enhance the delivery of innovation and bring local innovations to us at a corporate level which we could then distribute to other countries."

Customer centric innovation

Innovation has to be customer centric, he adds, and that's why Orange has recently set up new labs to serve the Africa and Middle East markets — in Cairo and Amman. "You have to be embedded in the ecosystem, in the region," he says. "Innovation, if it's customer centric, can't just be done from the Western countries."
Is this consistent with globalisation? Yes, says Bonhomme. "The first answer to globalisation is to have direct contact with the different key ecosystems around the globe and to share information around the group, and use it to build — through functionalities, through new business models — all those different things around the globe."
At the same time Bonhomme is aware of a considerable change of pace in the demand for innovation. "The ability to deliver, to provide a service faster than the others is something that is key today," he says, "absolutely key."
Unfortunately it's impossible now to forecast how fast innovations are needed. "Ten years ago, or 15 years ago, our turnover was mainly through fixed activity."
Then the focus was on mobile, and then internet and data services. "We consider now it is impossible to manage this cycle because the playing field is wider than expected," says Bonhomme.
He is looking at "the convergence of the three screens, mobile, TV and PC", and is also fascinated by the French term "être machinique". There is no direct expression in English, but think of the 1980s term "informatique", which the Anglo-Saxons as the more laborious "information technology". Essentially "machinique" refers to the future of communications with machines.
Back from the future to the present. There is no longer a technology threshold, warns Bonhomme. "The new guy with money can buy the techno and apply the techno and his business model and it can be very disruptive for our business," he warns. Look at YouTube and Facebook — only a few years old and already having a dominant effect on the need for internet bandwidth.
So there are small moves and large within France Telecom. The company is producing its own movies — under the brand Studio 37 — and it, like several other incumbents, are competing in the market for football and other sports rights.

Open innovation

For Bonhomme and Orange Labs he sees a future in what he calls "open innovation": a triple combination of marketing — note his reporting line again — with R&D and thirdly IT and network technology.
"It's not an organisation," he says: "It's an entity responsible for the management of the roadmaps of the products that are to generate growth in the future."
Funding for innovation has increased from 1.7% of corporate turnover to 2% in 2008, a number that excludes IT developments — a category, Bonhomme is careful to point out, that some operators include in their innovation heading.
So what does open innovation mean? Lots of opportunities for working with other innovative companies to develop new ideas, he says. For example, Orange runs a series of "bar camps", a term defined by Wikipedia as "an international network of user generated conferences — open, participatory workshop-events, whose content is provided by participants — often focusing on early-stage web applications and related open source technologies, social protocols and open data formats".
For Orange these have turned into "a permanent working place", says Bonhomme: "workshops with small innovative companies", where people work on ideas for new services.
Some of these projects are put in front of what seem to be technology-oriented focus groups, involving marketers and engineers as well as potential users. These can be "very disruptive ideas not yet seen by the clients", says Bonhomme: "Interesting but difficult to work on."
More recently France Telecom has started Orange Vallée — and the echo of Silicon Valley is entirely deliberate — as "a small team to speed up services which don't need the support of IT or the network — speed up very good ideas we have", he says.
These could include services he categorises as "Web 2.0 or Web 3.0" as well as "mash-ups of APIs from our company or outside the company".
The idea is to work with clients on a real basis to create better products. "It's a very Darwinian way of working," he says: "We start with 100 ideas. At end of six months only 10 are still alive and after the next six months only one."

Innovation bazaar

They take "ideas from everywhere", he says. Speed and the interest of the customers are important. "It's the innovation bazaar."
And then there's an even newer project, Dream Orange. "It's reserved for a few clients," with 500-1,000 partners. "We give them information about the technology from our laboratories, new and confidential," says Bonhomme. Among the partners are "artists, small companies" but even though "it's very open", Orange keeps a firm hold on the gate: "You can apply and we decide whether to accept you," he smiles.
In this vast playing field Bonhomme and his team have to exercise some discipline. "We can't allocate resources to all the topics," he says. "We don't want to be me-toos. We have to choose, and we have to organise the assessment of the performance of our research resources. We are trying to develop a culture of progress and measurement."
To that end France Telecom has 35 research objects. "The figure is very precise," says Bonhomme, with a note of perhaps wonder in his voice. Many of them include what you'd expect in a telecoms research unit — radio, fibre, evolution of copper; IMS and Web 2.0; LTE and 4G, "that kind of thing", he says, as well as middleware and applications.
"As an overlay, we're looking at the development of ways to interconnect platforms and services," he adds. "That will be more and more important in our business — because a mash-up of elements is the way we will set up services in the future."
The use of that term "mash-up" is significant. It's used by web geeks in their 20s, people who are developing some fascinating and fun applications with web technology.
But there are not many people of the level of Bonhomme — head of research in one of Europe's largest operators, someone who's been in the company for decades — who can use "mash-up" unselfconsciously as a way of describing future policy.
That in itself promises interesting times for Orange Labs and for France Telecom. GTB