For years, the telecom industry has been dominated by just a handful of players. Verizon, AT&T and Sprint have created an almost unchallenged monopoly of the North American market. The notion of founding a company that could successfully compete in this environment would have seemed ludicrous until very recently. But, quietly, this dynamic is beginning to change. Xplornet, a Canadian-based provider of broadband services, provides an interesting example.
Last year, Xplornet started to roll out Canada’s first national 4G network and earlier this year launched its first of two scheduled 4G broadband satellites. Xplornet reports that its first satellite supports customer download speeds of up to 25 Mbps; that’s more capacity than all current North American broadband satellites combined.
So, how has Xplornet been able to beat the behemoths to market with its nationwide 4G offering? Certainly, one of the main catalysts was its decision to embrace the cloud from the beginning.
For most of their history, carriers have relied on antiquated back-end CRM and billing systems that often require years of development and testing before they can bring a new service to market. Moreover, once they do introduce a new service, these systems typically lack the flexibility to alter how they package it. Until recently, the infrastructure didn’t exist to move “fast and flexibly.”
However, a number of innovative service providers have turned to the cloud to launch new products and services rapidly, have the flexibility to change pricing, packaging and promotions in real time, and connect with customers across the Web, over the phone and on mobile devices.
Xplornet had an advantage over traditional carriers because, from its inception, its team embraced cloud-based CRM (Salesforce) and cloud-based billing (Zuora). Financially, Xplornet’s decision not to go with a traditional on-premise piece of software made a lot of sense — instead of paying a huge capital expense up front, Xplornet was able to spread the cost out over the years.
Cathy MacDonald, Xplornet CIO sees time to market as a huge benefit to working with Zuora and Salesforce. Both services were implemented in a year — a blistering pace compared to the standards of traditional telco companies. Even more impressively, Xplornet had to launch both fixed wireless and satellite 4G services as part of its 4G rollout — complex variables that make the time to market even more impressive.
“When you set aside the fact that you don’t have the infrastructure and data center pieces to worry about,” MacDonald explains, “you really can focus on the true value of the project, which is the applications and what they can do for your business.”
Now that these services have been brought to market, Xplornet enjoys the ability to change its pricing quickly compared to traditional models. “In a traditional environment it becomes onerous and takes weeks to plan, test and implement,” explains MacDonald.
Eyeing the future, MacDonald and her team look forward to taking advantage of rapid iteration of cloud offerings: “I think Xplornet has done an incredible job of getting 4G out there quite quickly and efficiently. We see continuous improvement ahead and; from a Salesforce/Zuora perspective, they do rapid iteration and changes to their products, so we will be able to piggyback on changes they make for companies a lot bigger than us. We will benefit from the cloud iteration schedule to be able to continually improve our environment.”
Certainly, cloud-based CRM and billing has allowed smaller telcos to compete in ways that were inconceivable just a few years ago. It will be interesting to see how long it takes the world’s largest telcos to jump on board more fully with the SaaS revolution. It seems only a matter of “when,” not “if.”
Tien Tzuo is founder and CEO of Zuora. He was previously chief strategy officer and chief marketing officer at Salesforce.com. Widely recognized as one of the thought leaders in the Software-as-a-Service industry, he founded Zuora in 2007. As Zuora’s CEO, Tzuo has not only built one of the fastest growing SaaS companies, he’s also evangelized the shift to subscription based business models and the complex billing structures they inherit, coining the phrase Subscription Economy. He can reached at ceo@zuora.com.