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What SaaS-ification means for customer-business relationships

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Wes Durow
Photo courtesy Wes Durow
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Marc Andreessen once famously said that software is eating the world. And with the rise of cloud technology and software-as-a-service (SaaS) companies, it appears as though software might also be eating traditional revenue and service models of large enterprise companies.

“More and more of our customers are choosing to switch to a subscription model,” said Mitel Chief Marketing Officer, Wes Durow. “And in that world, response matters.”

A telecommunications company with customers in more than 100 countries, Mitel touts itself as one of the fastest-growing cloud communication providers. Speaking to DX Journal after the SaaS North conference in Ottawa, Durow said the move to cloud is changing how companies engage with customers, and businesses need to be aware of how customer relationships shift with the rise of as-a-service models.

“When you buy something every seven, eight or nine years, you’ll sign a longer contract and probably put up with some ups and downs,” said Durow. “But when you’re paying on a monthly basis for a service, you want short contracts, immediate response time, and a stream of new features pushed out to you as part of your subscription.”

Companies are quickly adopting as-a-service (aaS) offerings because of major cost savings and simplified integrations.

With cloud computing, for example, companies can dramatically reduce the physical footprint and cost required for in-house IT infrastructure. But when you engage a vendor and pay for services on a monthly or short-term basis, the nature of the business relationship can change as a result of many more touch points.

“The move toward Software as a Service or SaaS-based solutions has been well documented across customer, employee and financial data applications,” said Durow. “The unified communications segment now has more than 10 percent of the North American market choosing Unified Communications-as-a-Service (UCaaS) solutions versus on-site options.”

Mitel says UCaaS customers represent more than one million total users for the company, and that it has “substantially” more private cloud users.

“As customers move from intermittent transactions toward monthly UCaaS subscriptions, we have had to change how we design, deploy, bill and manage these services,” Durow said. “Further, we are also growing our customer success organizational capability so we can counsel and support these customers, in partnership with our channels where pertinent, to help guide them forward as they seek to add new features or intersect UCaaS capabilities with other SaaS services.”

Durow believes that responsiveness will be a key success metric for anything offered as a service.

“It’s all built around this transition from a transactional relationship to an experiential relationship,” said Durow.

Multiple industries are embracing the new service model. A recent Navigant Research report finds that Energy-as-a-Service has the potential to reach a global market of $221.1 billion by 2026. ServerWatch reports the Infrastructure-as-a-Service public cloud market is blowing up and revenues could scale from $16.8 billion in 2015 to $22.1 billion today.

For Mitel, acting on rising demand required the company to embrace a wide array of new technologies. The company used Salesforce for both internal and external tasks. They also rewired operations using Workday and adopted chatbots to boost demand-gen and service support processes.

“In our category, the number one differentiator for a brand is responsiveness,” Durow said, adding that the central focus with as-a-service offerings is the customer and their needs.

“The best companies that are really driving digital transformation speak very clearly about the problems that are solved, and they do it in a way that demystifies the technology. It doesn’t make it feel like they have to climb Mt. Kilimanjaro to get there. People want to leverage what they’ve got, have someone knit it together for them and do it in a way that helps solve a business problem.”

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Toronto makes the shortlist for Amazon’s HQ2, alongside 19 rivals

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Amazon has announced the shortlist of cities that could host its second North American headquarters, known as HQ2. The company received 238 proposals from locations across the region. It’s now narrowed the list to a total of 20 cities, including Toronto.

Technical talent

Toronto is the only location outside the U.S. to have made it to the shortlist. Amazon opened the application process last September, giving cities across North America the opportunity to support up to 50,000 high-paying jobs.

It will be a complete second headquarters for the company, providing extensive economic growth opportunities to the successful candidate city. Amazon will invest over $5 billion as it develops the facility.

Toronto is the only Canadian location to have made it to the shortlist. Canada is establishing itself as a leader in several areas of emerging technology, including artificial intelligence. Amazon is likely to have retained Toronto as an option because of the availability of technical talent around the city. The arrival of the company would further boost the already thriving Canadian tech scene.

Amazon’s original requirements for HQ2 stipulated it must be built near a metropolitan region of over one million people with availability of technical talent. The company also wished to have direct access to commuter transit and an airport not more than 45 minutes away. Toronto has evidently satisfied these first requirements but it will now be in competition with urban areas across the U.S.

“Enthusiasm and creativity”

The other 19 shortlisted cities are distributed across the U.S., including locations on the east and west coasts. Pennsylvania is the only state that features twice on the list, with both Philadelphia and Pittsburgh potential candidates. Across the country, cities including Atlanta, Austin, Boston, Chicago, Dallas, Denver, Los Angeles, Miami, New York City and two regions in the vicinity of Washington, DC have made it through the first stage of Amazon’s application process.

The company thanked all 238 initial applicants for their interest, saying they showed “tremendous enthusiasm.” It evaluated every proposal it received based on predefined criteria. Amazon will now work more closely with the 20 shortlisted cities to obtain detailed information on their proposals. It needs to establish whether the community can feasibly support the scale of its building and hiring ambitions.

“Thank you to all 238 communities that submitted proposals. Getting from 238 to 20 was very though – all the proposals showed tremendous enthusiasm and creativity,” said Holly Sullivan, Amazon Public Policy. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

Amazon’s currently headquartered in Seattle with regional satellite offices across the globe. The company employs over 540,000 people globally and has invested $100 billion in its infrastructure over the past five years. Amazon said it expects to conclude the competition to host HQ2 during 2018.

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Belgian telco chooses Infosys to lead its digital transformation

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telco
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Belgium-based telco Proximus has announced it is partnering with Indian IT services provider Infosys to digitally transform its business. The company will move to cloud-based solutions to improve its agility and efficiency, replacing 40 legacy platforms.

Infosys to transform Proximus IT and financial departments

Proximus and Infosys detailed their major collaboration this month, describing it as a way to “simplify and remodel” Proximus’ portfolio of products. The program, called Greenfield Excite, will take multiple years to complete and will digitally transform almost every area of Proximus’ business.

Infosys will provide technology to overhaul Proximus’ internal systems and IT methodologies. Existing IT infrastructure will be replaced with several modern Infosys-supported platforms. Proximus’ tech stack will be rebuilt around cloud-based solutions including Salesforce, CloudSense and ServiceNow.

Technology will also be deployed to streamline Proximus’ financial departments. New software will assist when generating quotes and sales, invoicing customers and placing orders. This is expected to considerably accelerate Proximus’ lead-to-cash cycle by removing old inefficiencies in its processes.

“We are committed to our program Excite that will transform the way we sell professional services to our enterprise clients,” said Proximus Chief Information Officer Geert Goethals.

“Through Excite we expect to establish greater agility, collaboration and bring in superior quality and efficiency in the way IT and business interacts. As part of this initiative, we have entrusted the co-responsibility of transforming our IT systems to Infosys, as our teams work together to deliver objectives of this program over the next years.”

Proximus switching to cloud-based systems to keep pace with competition

The digital transformation initiative will see at least 40 of Proximus’ legacy IT systems consolidated into six new cloud-based platforms.

The resulting centralization will offer Proximus enhanced management capabilities, improved security and a more reliable IT network. It should make insights more visible, enabling further optimizations to be made to the telco’s operating efficiency.

The telecoms industry is one of the most advanced when it comes to digital transformation. The Dell Digital Transformation index ranks telecommunications as the most mature industry in terms of its digital transformation efforts.

Proximus’ decision to embark on a complete digitalization initiative will enable it to keep pace with competitors as the digital economy materializes. With the restrictions of legacy tech left behind, Proximus will be able to scale more freely and start to utilize emerging technologies such as AI and hyper-scale cloud computing.

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Digital skills gap impacts 54 percent of businesses

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Digital skills
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A shortfall of technically skilled workers is threatening to upheave digital transformation.

A new report from Capgemini and LinkedIn has found 54 percent of businesses are now feeling the pressure from the digital skills gap.

Technologies such as AI, IoT and cloud computing are evolving rapidly as they’re deployed inside more organizations. Skills training can’t keep up with the pace of development, creating a growing demand for capable digital talent.

Human talent crucial to business transformation

As reported by Diginomica, CapGemini and LinkedIn found 54 percent of 1,200 global organizations said they’ve been affected by the skills shortage. This has resulted in them having to revise their digital transformation plans, causing a subsequent loss in competitive advantage.

While many transformation strategies include automation as an element, it’s clear human talent remains critical to successful deployments.

The survey identified six key areas that firms can improve on to attract more skilled workers.

These include:

  • Align leadership on a talent strategy and the unique needs of digital talent
  • Diversify recruiting approach
  • Create an environment that prioritizes and rewards learning
  • Chart a clear career development path
  • Give digital talent the power to implement change
  • Provide flexible and collaborative ways of working.

 

Employees willing and eager to upskill

The study authors found employees are generally willing to learn new capabilities. Most respondents expressed a desire to keep their skills current, with 55 percent saying they’d leave a role with an employer unwilling to provide training.

Importantly for firms looking to attract talent, 58 percent said they’d be more likely to apply to a company that prioritizes digital skills development. Accessible workplace learning initiatives are therefore a critical strategy component for businesses looking to attract and retain digital talent.

“In an increasingly digital economy, those organizations that bridge the talent gap will enjoy a competitive edge over those who don’t,” wrote CapGemini and LinkedIn in the report. “A defined digital strategy that meets both business objectives and the preferences of digital talent is critical for a sustainable and successful digital transformation.”

With competition for digital talent only set to increase over the next few years, companies should start their training initiatives now to retain their leading edge. Maintaining agility in the digital economy will require flexible upskilling programs that encourage independent learning and improve recruitment effectiveness.

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