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March 2018

Epsilon’s Bold Gambit: Leading Telecoms to a Global Wholesale Partner Ecosystem

Epsilon’s Bold Gambit: Leading Telecoms to a Global Wholesale Partner Ecosystem

The game of Chess is more than an idle amusement.  Playing chess leads to good habits of thinking.  Life itself is a kind of chess as many of the good and bad events that happen to us result from prudence or the lack of it.

On the Morals of Chess, Ben Franklin

Engineering prudence is a proud telecom tradition.  When your mission is to guarantee a quality customer experience across immensely complex and technically messy networks, being systematic and cautious is a great virtue.

And yet too much prudence is not always a good thing.  In chess, if you’re constantly playing defense, your opponent can box you into a corner and eventually force checkmate.

Likewise, how many times have telecoms failed to take advantage of market opportunities in their backyard: the Internet, search engines, the cloud, to name a few.  So a certain boldness to take reasonable risks is key.  As the Roman proverb says: Fortune favors the bold.

Now when a man or woman of great prudence and boldness does rise to the top of a telecom business, some amazing things can happen.  Take Bill McGowan, the founder and chairman of MCI.  In the 1980s, McGowan’s achievements were astounding, for he: 1) broke up the AT&T monopoly; 2) opened up the long distance biz; 3) launched a very profitable international voice business; and 4) funded the early Internet with help from his tech guru, Vincent Cerf.

One other success factor — which plays no role in chess, but is crucial in the networking world — is an ability to win trust and make deals with partners.  Sure enough, it’s another sphere where McGowan excelled.  Not many remember, but it was McGowan who convinced IBM to buy 17% of MCI’s stock, a pivotal capital infusion for MCI.

Well, I mention these telecom success factors — prudence, boldness, and deal-making — because it’s these factors that will ultimately decide the destiny of a new and very big idea: a Global Wholesale Partnering Ecosystem or universal connectivity solution for telecoms on all continents.

Today, two principal rivals are vying to lead this programme — PacketFabric and Epsilon.  Both firms are leveraging their home-grown SDNs, APIs, and portals as catalysts.  But at this point, it’s anyone’s guess how fast this idea will catch fire — or maybe evolve into several competing ecosystems.

So joining us now to provide an update on Epsilon’s initiative is their Chief Commercial Officer, Carl Roberts.

Dan Baker, Editor, Top Operator: Carl, the prospect of a Global Wholesale Partnering Ecosystem growing into a kind of universal standard would have a big impact on the wholesale business.  How is this idea progressing at Epsilon?

Carl Roberts: Dan, we’re pleased that in 2017, Epsilon saw significant growth in the business.  We launched a channel partner program which we didn’t have before.  We created an Asian program and coming out of 2017 we had full-blown channel partners, a number of agents, and over 30 partners with whom we are in negotiation to come and sell our services.  So, that was good.

We also started engaging with the Internet Exchange (IX) partners which is really important for us.  We will be expanding our Peering and IX relationships globally to give our partners greater reach and access.  By the end of 2018 our plan is to have 25 IXs connected to our global network fabric.  The principle IXs are already hooked up.

We have got a particularly close and fruitful relationship with the folks over at Du who have proved to be a very valuable partner.  Du is a great example of a business that is continually adding to its ecosystem and exploring new services that will benefit its customers.  It became the first provider in the Middle East to offer on-demand connectivity and has taken a leadership position in the Cloud and software defined networking.

Same goes for Bulk and WIOCC, through our strategic partnerships, both operators are now providing a broad suite of network service providers within their regions as an on-demand global network fabric.  We also forged a strong relationship with the folks at Aqua Comms who have the cable across the Atlantic and other ventures ahead of them.

Our interconnect fabric has also matured over the past three to six months.  We spent a lot of time developing our API hub whereby carriers, cloud service providers, IXs, software companies, anybody who wants to seamlessly transit or interconnect with us or across our network can do so.

More specifically, in the U.S. we expanded our business further, partnering with companies such as Telehouse, Connectria, 1025Connect, and American Axess.  We are obviously starting to look further both North and South of the border.  We have already started engaging with potential partners in Canada.

What geographies of the world will gravitate most to these global wholesale partnering solutions, do you think?

We see two geographies, in particular, having fast-paced growth.  First is Asia-Pacific (certainly a very broad brush in terms of countries), and also the Americas, both the U.S. and Latin America.

Obviously the bulk of the Americas business will be in the U.S., but we think growth South of the border will be phenomenal.  We have an ambitious program to develop a significant number of new PoPs in the U.S. in 2018.

We also predict healthy growth in the Middle East, a crucial region for us to support our existing customer base.  However the operator ecosystem is naturally less dense in comparison to other parts of the world.  Europe is generally tough going for everybody, I think, simply because of the broad number of players there.

Even though the U.S. is a mature market, there’s great drive there to move to new technology.  So, I see fantastic opportunities there judging from the increasing number of inquiries we are getting.  And probably the most tantalizing thing about Asia Pacific is the hope that business with mainland China will expand.

We continue to be bullish and very pleased over the market uptake.  For instance, some of our ecosystems partners include companies like Microsoft, Alibaba, IBM, Oracle, AWS, to name a few.

I have to say, over the years people have used the term “partnership” fairly loosely: it’s anything from a handshake to a deal.  But what I’m seeing here are some very meaningful partnerships with a broad community of actors who are coming together to enable a very powerful ecosystem that drives these SDN services which is the future of connectivity.

Tell us a bit more about these partners and agents.  Who are they?  What business are they in?

Well, maybe a better way to describe "agents" is companies who have additional sales resources.  They have connections: some will own facilities and others will not.

These people tend to be in other businesses.  Think of the IT companies who are very strong in a specific region, but who feel their customers would benefit from adding connectivity services.  So they can resell Epsilon connectivity capability through a white label Infiny platform to their customer base.

Now how do I distinguish agents from partners?  Well, an agent would sell connectivity services as a light adjunct to their core business.  And a channel partner wants a heavy adjunct to their core business: it could be a Managed Service Provider, Systems Integrator, or Carrier trying to expand its capability.

With a partner, we’re usually asked to support their existing infra in places where it’s no longer cost effective for them to invest.  That’s a deeper relationship entailing business plans and maybe joint-go-to-market strategies.

What about the large incumbent carriers?  Seems like they would get nice value from a global wholesale portal: it would help them extend the life of their existing telecom assets at relatively little added cost.

It’s a good point.  People sometimes try to force me to debate Epsilon versus the carriers.  But actually, that’s not true.  The carriers are some of our biggest customers: we enjoy great relationships with them.  We help carriers of all sizes.

Many customers appreciate how we can help them transition to the new wholesale paradigm.  And just because we are small doesn’t mean we can’t help some of the bigger carriers and operators across the board.

Carriers come to us and say, “Look, you’ve got this global reach through your connectivity fabric.  And frankly, we don’t need to invest in certain geographies ourselves, but we still need to service customers there, so can you help us with that?” And more often than not, we have a connection with the local telco there, so we actually can help them.

In short, we can become the go-to-place for connectivity options outside the core focus of those particular carriers.  This is perfect in Europe, for example, where the operator’s country is surrounded by five or six other countries and they need to connect to those regions.  So these are the kinds of conversation we’re having.

And being a neutral player enables all of this.  We are very happy to help because we are not anybody’s enemy here, we are trying to be everybody’s friend and enabling our customers is what we do.

Then, of course there are the cloud providers.  There’s great momentum behind connecting them via wholesale or direct to enterprise.

Cloud players are a very important part of our ecosystem.  That’s a given.  But increasingly we are also getting questions about what industry or IoT applications should be layered into our portal.

There are various kinds of connectivity here.  Network connectivity is the base of it all.  Then there’s the connectivity option to cloud players.  Another promising sector is connecting to the so-called unicorns, who’ve got fantastic enterprise or consumer applications and are growing at a very fast clip.  Some are saying this market will be north of a trillion dollar business in 2020.  The forecasts vary, but just about everyone believes it’s a huge amount of business.

At some point all of these players need to come into the ecosystem.  So that is why we are developing an API hub: making it easy to interconnect into the ecosystem will be a very important piece of the puzzle.  Now I can’t mention names, but you’d be surprised to see some of the logos of companies who are keen that we develop this API.

Fundamentally, the end game is to have this universality of bringing operators together, coming in through the APIs, to provide seamless connectivity service so nobody needs to bother about how it all gets netted together in the final play.

People get very engaged and light up when you start talking about API integration and interoperability.

Certainly the quality and simplicity of the portal itself is pivotal to winning over partners.  How is its development progressing?

Dan, there’s been big uptake and interest in our Infiny portal, and we launched a new release of the portal with improved user interface and more advanced functionality.  Our customer bases are seriously starting to use these click-to-connect on-demand services and we’re hopeful this will put pressure on the market who still provide services the traditional way.

We spend a lot of time on designing the Infiny platform so it serves partners well.  It’s not as if we built this portal for ourselves and are merely retrofitted it for partner use.  We built it from a bottom up with our partners in mind, knowing this has to be designed from the indirect model point of view.

So, it is built for partners and delivered in such a way that they can white label it very, very easily.

Carl, thanks for these fine insights.  It’s an ambitious plan with many moving parts, but that’s exactly where we’re at in the era of big telecom wholesale.

Thanks, Dan.  Nobody can do everything.  People are finally realizing that everybody has a role to play in this ecosystem.  Everybody can “make their buck” in this business while working collaboratively together.

To me, that’s very exciting because it adds huge value in the marketplace.  By putting all that capability together, and making it flexible, easy, and on-demand, it really gives power back to the end-user — whoever that is, an enterprise (SMB, large national or multi-national corporation), IT services firm, or even carriers who want to extend their capability.

Basically we are just demystifying the complexity of it all because things are changing so rapidly.  The days of “rolling your own” is becoming almost impossible.

So, being able to tap into this network as a utility resource and essentially find everything you need is just phenomenal.  It is a very exciting time in the industry.

Copyright 2018 Top Operator Journal

 

About the Experts

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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