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October 2017

Epsilon Pioneers a Global, Portal-Driven, Wholesale Ecosystem that Partners can White Label as Their Own

Epsilon Pioneers a Global, Portal-Driven, Wholesale Ecosystem that Partners can White Label as Their Own

In a simpler day, a telecom giant would bend over backwards to provide a large enterprise with a soup-to-nuts national and global data network.

But ever since the world exploded with smart phones, fast cable Internet, hundreds of net-neutral data centers, and vast metro/undersea fiber networks, our industry reached a tipping point beyond which industry giants no longer wish to chase every big deal.

So what happened?  Well, I think people realized some basic truths about today’s networking market:

  • A Global Ecosystem of Wholesaler Partners offers a richer choice of network components than any Tier 1 Carrier can offer on its own.  So indirect sales became a cost effective option for Tier 1s, Tier 2s — or any carrier/wholesaler for that matter.
  • Enterprise IT chiefs & business managers appreciate the freedom, flexibility and lower costs of On-the-Fly Network Consumption in the same way they enjoy buying cloud computing from an Amazon or Microsoft.
  • The importance of Negotiating SLAs fades when a network buyer can switch portions of its network to a higher-quality supplier tomorrow.
  • Buying Networks Wholesale offers a better long-term guarantee of Best Savings/Quality/Flexibility than pouring money into a massive internal Software Defined Network (SDN) that could be obsolete by the time it’s built.

Epsilon is a well-backed Singapore company who’s pioneering the notion of a global network ecosystem that links hundreds of wholesale partners via a powerful portal.  And we were pleased to interview Carl Roberts, Epsilon’s Chief Commercial Officer, about the innovations his firm is driving.

Carl’s perspective on the wholesale market — and where it’s headed — is well-informed because he’s a veteran executive at IBM’s Global Network and headed up Verizon’s international carrier business for many years.

In the interview, Carl not only profiles Epsilon’s history and ambitious growth plans, he also explains the pivotal role of its Infiny portal, the multi-level-partner core of its ecosystem, the types of partners it’s nurturing, and the flexible and neutral way Epsilon is positioning the ecosystem to satisfy the needs of the enterprises its customers serve.

Dan Baker, Editor, Top Operator: Carl, you’ve had a wonderful career in IT and telecoms.  Can you give us some of the highlights?

Carl Roberts: Well, Dan, I worked most of my career in France.  Starting out as a lawyer, I then spent 15 years with IBM Global Services in many positions ending up at IBM Global Networks, which became my path into telecom.

From IBM I went to Global One where I was head of corporate development in Europe for a year.  Then around the time France Telecom bought out Deutsche Telekom’s interest, WorldCom came to me in 2000 and asked me to manage their international data centers.

Then WorldCom became MCI, then Verizon Business, and I was with Verizon for 14 and half years, and for the last ten I ran their international carrier business — all products outside the U.S. was my beat.

Then in 2015 I left Verizon Business and setup my own consulting business in Dubai, where I’m now located.

And then your industry colleague of many years, Jerzy “George” Szlosarek, CEO of Epsilon, gave you a call.

Yes, George was very straightforward.  He didn’t try to twist my arm: he just said, “We’re doing great things at Epsilon, so you should come by and take a look.”  Well, I took a look, and here I am — since December 2016.

And joining Epsilon has allowed me to have a lot more fun working for a smaller, more dynamic and flexible organization.

I spent 30 years in corporate America and it was a great education and I had great experiences.  But today at large companies it’s about consolidating your home base.  And that’s especially true of the international carrier business which has been largely de-emphasized at the large telcos.

But at Epsilon it’s about growth and ambition; it’s about working with a group of people I like and respect, so all of those boxes were ticked.

At a large company — from the moment you get the ability to do something — getting all the necessary approvals takes a long time and it is hard to be truly nimble.  Epsilon, being a small structure, allows you to actually get things done very quickly.  That’s a great feeling.  The C-Suite here is very tight: we work well together, and there’s no corporate politics.

When we need to get stuff done, we sit down, have a conversation and agree on something.  Then we go off and just do it.  Well, that’s like Christmas!

What about Epsilon’s business — how was it born and where’s it at today?

We began the business in London 2003 when we supplied E1 circuits to companies in voice.  And surprisingly, even after the dotcom boom, Epsilon had a great run selling those E1s by bucket load.

Then, over the years, we grew in scale and still kept the mission of keeping connectivity simple, but doing that has obviously become much more sophisticated.  So today we are interconnected with over 600 carriers worldwide — in 170 countries.

We’ve got over 90 PoPs of our own, and we offer Ethernet, MPLS2, co-location services, premium voice through SIP trunking, enterprise access services, and connections to Amazon, Google, Alibaba, Oracle, and Microsoft.  This is a much broader range of product than some of our competitors offer.

And the business is very data centric — about 88%.  We are not a voice trading or switching platform.  On the voice side we do have SIP trunking and inbound numbering services, but the voice termination piece merely complements our core data business.

And how do customers interface with you?

Dan, we offer our products through a sophisticated portal called Infiny, a portal is absolutely changing the way these services are ordered, provisioned, and managed.

Essentially, we’re putting the whole connectivity suite online, mirroring the flexibility, agility and scalability of the cloud service we are supporting.  Before, cloud was something in the network somewhere.  What we’ve done is actually put the network in the cloud.  So today if you want to — either from your PC or tablet or phone — you can turn up a circuit across our network immediately.

If you want to hook up Dallas to New York, or Hong Kong to London, you can do it.  And you can get a service for a day, for a week, for a month, or year.

And what that gives you is an agile and flexible ecosystem of connectivity — so it becomes one go-to place for a partner to fulfill its connectivity needs.

We are putting a very simple capability at their fingertips: the ability to turn up services on the fly — and that’s perfect for enterprises who have both predictable but also unpredictable business cycles.

And coming from a big carrier background where everything was fairly static in terms of solutions, contracts, and everything, this is very empowering because it’s a wholesale play that enables people to provide solutions to others.  We sell through partners — as opposed to going direct to the end user.

Can you give me examples of the customers/partners you are serving?

Yes, the kind of customers we have vary from traditional carriers to data center operators to managed service providers — and ISPs too.  Regional fiber players are also arising: they also need a simple way of getting connectivity solved.

Then there are the unicorns, the really cool SaaS providers out there who hook into a portal like ours to access a global ecosystem.  The unicorns are usually startups who bring some fascinating things to market.  But they have two problems: 1) they need market access, and 2) they need to be out there on the web — accessible and visible.

There is such a plethora of great companies out there that one of the biggest challenges is figuring out which of these unicorns are going to make a big difference.  Which ones will become the next Twilio or WhatsApp or whatever.

Our API hubbing capability is key to bringing people into our ecosystem, but it’s not one standard for everybody.  We are talking to different players in the marketplace, whether they be downstream suppliers for local access or OTT players.

An important differentiator for Epsilon is you’re not just providing wholesale connectivity, your portal is enabling your wholesale customer to white label your ecosystem.

Yes, our ecosystem is absolutely built for partners.  Our “connectivity made simple” model is now complemented by what I call the three P’s: Platforms, Portals, and Partners.

Channel partners are key to our future.  Frankly, to grow at the rate we wish to, we need partners to help us.  So having the Infiny portal on the front end allows us to sell directly to our customers.  All the capabilities and records needed to white label the ecosystem are there: usage and invoicing are built at the levels of parent, child, grandchild.  In fact, we’re now adding a further great-grandchild level.

When a partner plugs their estate into our ecosystem, anybody else who wants to come in and have connectivity, say, in London will be able to find the connectivity estate of our partner there.  So there are multiple wins in this relationship by partnering with Epsilon.

Let’s say we plug in a regional carrier in the Midwest US’s estate into our ecosystem.  Well, at the front end that means they can sell our capabilities to their customers, such as connections to AWS or connecting to Asia or Europe or here in Dubai right through our portal.

And the portal will evolve.  For example, as we look forward to M2M and IOT players (which are synonymous with unicorns) at some point in time we will explore adding new industry boxes where if you’re in the financial industry, there are some cool apps here you can access.

What’s your growth plan?  How do you plan to expand the business globally?

Epsilon was actually born in London so we have a big European footprint.  We also do a lot of business here in Dubai where I sit — so Middle East/Africa is one of our biggest growth regions.  With our headquarters in Singapore, we’ve also got a strong presence in AsiaPac and we’re developing that further.

Now as you talk about global expansion, a big advantage we have is we’re not dragging around lots of debt.  From our inception, our company has been self-funding.  We have grown organically up until this year when we bought a small company out of New York called Metcom which gives us a number of COLO facilities and about 15 PoPs in the New York City area.

And to be honest, up until last year, the US was not a market we had a strong focus in growing, but it is a big focus today.  We’ve got ambitious plans to populate the US on the East Coast.  In about 18 months we plan to bounce across the US with points of presence, go coast to coast, and then we’ll go north to Canada, and then south to LATAM.

In the US, a key target customer set is the data centers, particularly because that’s where you have to be because that’s where the Tier 1s are.  We also find there’s quite a bit of underserved territories in the US where content providers are pushing content right to the edge.

So we’ve got a packaged connectivity solution that attracts content providers and enables the data center providers to help themselves as they extend our own ecosystem.

How much flexibility does the customer have?  Does the customer have to use your network?

No.  Just because you are entering our ecosystem, you don’t have to use our network.  We say all this capability is there and you pick what works for you and when it works for you.  If we win a connection with the customer, that’s fine.  If we enable the connection to Verizon, AT&T, Telefonica, or Orange, that’s fine too.

We’re carrier neutral so there’s no kind of long term commitment.  Our key consideration is how we can give flexible connectivity solutions whether it’s pure connectivity or into a hosted environment like AWS, or picking up some phone numbers to do SIP trunking, or local access.  We’ve got all that available through our portal.

Add it all up: it makes it easy for people to say: “OK, you know what, if I want to go to 15 countries and connect, have a bit of Amazon, get some phone numbers, this portal has everything I need.”

The ability of your wholesale partner to brand the services of your ecosystem is impressive.  But are the underlying brands of the interconnected suppliers transparent in the ecosystem?

No, the only brand that is seen through the portal is the selling company’s brand.  Their badge is on the front, though we are showing the performance of each network connection they select.

Now when it comes to AWS service, that’s not something you can or would need to mask because a customer has to have its own account with Amazon.

Isn’t there a danger that large carriers, who sell at premium prices, will be short-changed in your ecosystem?

No.  We are simply putting the prices out there and letting our customers decide.  This is what we can provision in real-time for you.  If it works, go for it.

We are not trying to kill anybody’s margins.  The reality is we’re selling their networks without them having to worry about it.  If it’s the right quality and the right price, they will get the business.

Now you’re right in one sense.  It is a two-edged sword.  A supplier may have to lower its premium price to compete in the ecosystem, but they are liable to gain in volume.  Besides, their costs are lowered substantially because the details of selling, quoting, contracts, and provisioning are all done through our portal.

Carl, thank you for these wonderful insights.  I’m encouraged that Epsilon is investing in expansion and plans to ride a big upswing in demand for wholesale solutions.

Thanks, Dan.  Having led a huge wholesale organization for 14 years, I can tell you that wholesale was considered a bit of a business backwater in the old days.

But wholesale is totally transformed now.  It’s become a powerful indirect way of going to market.  It’s no longer about selling something cheap with relatively little value.  In fact, for global corporations and comms companies, wholesale has become the great enabler of their business because it allows them to expand very flexibly and at much less risk.

The problem with what carriers call the enterprise market is that times are hard, and enterprise customers have raised their expectations: they want enterprise services at wholesale rates.  But that’s like trying to tie some shoe strings that are too short to reach each other.

What’s happening is the entire business is moving to what I call a Wholesale Plus model where you add a bit more value on top of what would otherwise be considered your wholesale offering.

That’s the sweet spot that enterprises want because you get a balance between what they want and what they’re prepared or capable of paying for.  It’s delivering the right quality, right reach, and the right capability.

So the wholesale business is now quite fascinating, exciting, and great to be in the middle of.

Copyright 2017 Top Operator Journal

 

About the Expert

Carl Roberts

Carl Roberts

Carl Roberts has worked in the international Information and Communications Technology industry for over 30 years, with a proven track record in International Marketing and Sales, Business Management, Corporate Strategy & Development, M&A, Business Transformation, Implementation, Planning, Restructuring and Corporate Governance.

Prior to joining Epsilon, Carl worked in his own Consultancy company (Hadaara Consulting) after having held numerous senior executive positions in Verizon, MCI, WorldCom Global One and IBM, having started his career in the legal profession working for Ashurst, Morris, Crisp & Co.   Contact Carl via

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