Managing telecommunications costs can be a tricky business. And that’s before you’re even getting started with IoT.
Peter Walsh has started seven businesses, and his latest – CommsCloud – is, as he says, a ‘bespoke telecoms management consultancy’.
Telecoms expense management is a crowded space, which is why he’s trying to do something different. And what with the coming wave of billions of connected sensors, he thinks he’s well placed to take advantage of this increasingly complex world.
He says he tended to start businesses ‘because I stumble into them’.
So he’s a serial entrepreneur?
“I’m unemployable,” he says, laughing.
“I’m a maverick, but in my more mature years, I’ve learnt to control my blue sky (thinking).
“I’ve always got a new idea. And it’s very difficult to focus on building a business when you’ve always got a new idea. There comes a point where you have to be very pragmatic about what you’re doing.”
There’s a youthful energy about him, which belies his 59 years. He and his wife have just adopted a little girl, and he shows me a picture on his phone.
“If you don’t stay young, you’re going to be in big trouble.”
How did he fall into his latest business?
He returned to Cape Town in 1997, after ‘ten years of surfing in Jeffrey’s Bay’, and was casting around for something to do. He started a platform delivering prepaid airtime through interactive voice response, and was soon managing the distribution of airtime for trucking firms and enterprises, among others. Soon, he was also managing their post-paid contracts and Telkom lines.
This business was focussed solely on telecoms expense management, but by 2010, he says, ‘the model was broken’. He left, and started CommsCloud in January 2011, with one clear idea, which seems to have become something of a mantra: managing your business and managing your costs is a partnership.
Visibility into costs
One way of doing this is sitting down with the customer and the telco supplier and having a conversation about how to better manage costs. But part of the problem is that, in his view, large telcos are still struggling, and failing, to deliver proper services and value to enterprises.
“From a mobility perspective, they’re broken. Most enterprises have a mix of cellphones, and Vodacom and MTN are not vendor-agnostic. So Vodacom has its own management and reporting tools, which are designed to manage Vodacom. You need a vendor-agnostic platform. And you need a platform that isn’t marking its own homework.”
He’s got plenty of stories about inefficiencies he’s covered in large enterprises, and recounts one about how he was retained by a bank to analyse the data usage of its dongles. He said that despite the discount it received from the mobile operator, it was still spending R3.5 million a month, of which R1.8 million worth of data wasn’t being used.
“The point is they didn’t have visibility. The vendors can’t manage these cellphones; it’s not in their interest. Why would they cannibalise their own revenue stream?”
Telcos are also being squeezed. The price of voice telephony continues to drop, and will, he says, soon be free. Five years ago, a Diginet line cost thousands of rands a month. Now, fibre costs a fraction of that, with ten times the throughput, he says.
This also means that if the telecommunications costs continue to spiral, there will be precious little left to manage.
But we’re not quite at that point just yet. He bats my questions aside as to why the IT department can’t manage these costs.
“They can’t. It’s too big, and they can’t do it manually. They need a platform. You need to know what you’re doing; you need training and analytics skills, and you need time. And then add fixed line and VOIP calls…and what about cloud, what about inventory management, procurement lifecycle management?”
He pulls up a dashboard on his laptop, and starts clicking around a customer’s account. It’s comprehensive: voice, line rentals, internet usage, hosting, data, and discounts, among other things.
On the mobile dashboard, there’s a huge spike, for some reason, in March: it turns out someone from the company was travelling overseas that month, and picked up a lot of roaming costs.
The IoT opportunity
He says a typical c lient would, after six months, be saving anything from 25% to 40% on their telco bills, and this is all due to getting visibility into their usage and costs.
Does he see his business model changing, given the coming wave of disruptive technologies?
For Walsh, IoT represents a vast opportunity.
“If you haven’t got a platform that can measure all those IoT devices, and tie this back into the digital world with AI, you can’t help the company manage its ICT costs. For me, it was adapt or die.”
He says his platform is ready to manage all these devices, ‘in their tens of millions’.
He adds he has a global Access Point Name gateway for IoT devices.
He believes companies currently putting down sensors in Africa are going to be paying between R17 to R35, and perhaps even as high as R200, per megabyte of data.
“And that’s before you rent the SIM card and before you have a management platform.
“I can give IoT companies a SIM card with 5MB of data, which an IoT platform will never use, and a management tool for R5 a month, anywhere in the world. If you ask people what’s your AI strategy, what’s your IoT strategy, people don’t have them yet.
“If you have a billion devices out there, you can’t have a SIM that’s going to cost you R17 a month. You’ve got to manage them for R5 a month.
“And you’ve got to have a dashboard that enables you to link into the information and bring it back to you. The minute you have to send someone to the device to repair it, it’s going to cost you $700.”
Walsh seems to be getting in on the ground floor.
“When you get to the digital world, it requires a whole different set of tools, scaled for IoT, speed and automation and integration.
“I believe I’m enabling functionality with information and analytics, and I can only do that with AI and BI tools, and I can only do that if I’m saving somebody money, because everyone’s budget’s shot.”