June 22nd, 2007
NetSuite, integration and the local loop
NetSuite came to London this week to launch its 2007 edition. Choosing to launch the product outside of the US was a neat way of emphasizing the newly extended language support and other globalization features of the new release. Perhaps, who knows, it was also a convenient way of sidestepping any ‘quiet period’ requirements relating to the company’s long-promised IPO. Whatever the reason, it was good to have NetSuite here on my home turf for such a major product announcement.
It was good also to meet some of the company’s UK customers,It’s about the cultural adjustment to doing business in a connected world including one its largest accounts, with 2000 seats. Opal Telecom — part of the Carphone Warehouse group — is a network operator that provides network services to telecom providers in the UK. It uses NetSuite for sales, partner relationship management and customer services. I spoke to Marie Vernon, head of the company’s service management centre, who put into context how much her team relies on the CRM package: “Our whole day is spent in NetSuite.”
Integration to other systems, in particular those of other telecoms operators that Opal nteracts with, is a crucial component of its NetSuite implementation. Indeed, one of the attractions that drew the company to choose NetSuite was the ability to add web services integrations and custom workflows, so as to automate previously lengthy manual processes.
I found this interesting for two reasons. Firstly, it’s a great illustration of my contention that SaaS is just a component of a much broader trend towards connected working and business practices. Secondly, I have gained something of an insight into the nature of interactions that take place in the UK telecoms arena over the past week as a result of moving house. In fact, I’m posting this from a friend’s house (after an earlier failed attempt at a coffee shop) since my new home currently has neither a telephone line nor an Internet connection.
Telecoms provision in the UK has been ‘unbundled’ in the name of competition, but although this has resulted in lower prices, certain aspects of the new setup are less advantageous to customers. Moving to new premises is one of the worst situations, particularly for those like me who work from home. Last time I moved, I experienced a two-week gap in broadband provision, but at least I had a phone line when I moved in. This time I have neither, but I’m expecting to be back online again by Monday, just five days after moving.
The UK system revolves around something called ‘local loop unbundling’ (LLU). This refers to the fact that all the copper wires going into homes and businesses across the UK (except in the city of Hull, but let’s not go there) belong to BT, which was the national (and originally government-owned) monopoly telecoms supplier. In the past few years, those copper wires — the ‘local loop’ from the customer’s premises back to the local telephone exchange — have been made available to other providers. First of all they were allowed to put their own network equipment in the telephone exchanges so they could offer competitive broadband services running over BT’s local loops. Then more recently, competitors were allowed to install their own equipment on individual lines and provide their own phone services direct to the customer premises — thus ‘unbundling’ the local loop from BT’s monopoly control.
The problem I’ve faced this week is that once the local loop has been unbundled, it has to revert to BT before a new customer can take it over — even if that customer then wants to ‘unbundle’ it again with a different provider. BT has made a lot of marketing capital out of this with a disingenuous ad campaign about the millions of customers who are ‘coming back to BT’. In most cases, they have no choice.
On the other hand, the BT brand also suffers because their call center is the first port of call for anyone who is moving house, and I’ve personally had several conversations in the past ten days with BT call center operators who sound stressed out, defensive and inadequately trained to deal with customers’ frustrations at the difficulties they encounter.
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Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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