By Stephen Thomas, Sr Director Network Services, Frost & Sullivan Information and Communications Technology (ICT)
The Orange Business Insights 2024 event held in Amsterdam on July 10 and 11 showcased strategic investments and technological advancements in digital infrastructure. Industry leaders highlighted major investments, key developments, and focus on enhancing digital services and infrastructure to support digital transformation.
The key developments highlighted below underscore a growing attention to robust digital infrastructure, emphasizing modularity, scalability, and innovative technologies to support next-generation digital services.
Strategic Investments and Expansions
Major Investments:
- 200M Euros Investment: Orange Group is investing 200M Euros over the next five years through Orange Business to build a new IT platform. This IT stack will be a consolidated instance across Orange Business utilizing tailored integrations of ServiceNow and Salesforce.com for ordering and day 2 support.
- Observability Platform: Development of a world-class observability platform to improve the management of the network, applications and overall digital services and part of the overall 200M investment. The vision of the platform is to be world class but also create revenue generating opportunities.
Key Goals:
- Portfolio Optimization: Reducing the overall portfolio by 50% while expanding digital services to enable transparent and frictionless customer journeys.
- Streamlined Partner Onboarding: Designing the new IT stack to reduce friction and make the partner onboarding process more uniform.
Key Themes Explored:
Supply Chain Optimization and Resilience
- Agile Production Models: Orange Business is embracing agile production models to mitigate supply chain risks.
- Industry 4.0 Technologies: Leveraging AI for demand forecasting, logistics, inventory, and supplier risk management to create sustainable and resilient supply chains.
Continuous Manufacturing and Sustainability
- Advanced Manufacturing Technologies: Implementing continuous manufacturing processes to enhance quality, resource efficiency, and environmental sustainability.
- Environmental Impact Reduction: Focusing on innovative production methods to reduce environmental impact.
Client Example: Fast-Moving Consumer Goods (FMCG) Company
During a visit to an FMCG company, their Chief Technology Officer (CTO) shared insights into their digital journey using Orange Business’s platforms. The services included software-defined wide area network (SD-WAN), multiprotocol label switching (MPLS), internet protocol security (IPSEC) tunnels, Microsoft Teams Voice, and Mobile Secure Sockets Layer (SSL) with security services across multiple sites. Orange Business provided a strong foundation for the company’s digital transformation, supporting 85,000 employees and various stakeholders.
Value Propositions
Digital Infrastructure
- Evolution Platform: Network as a Service, covering transport, cloud, and security with a focus on observability.
- Flexible Pricing Models: Including down-to-the-hour pricing options.
Employee Experiences
- Secure Remote Work Solutions: Enhancing collaboration and security for remote workers.
Customer Experiences
- Omnichannel Solutions: Focused on contact center and collaborative solutions with AI integration.
Operation Experiences
- IT/OT Convergence: Targeted solutions for manufacturers and public sector smart infrastructure buildouts.
Hot Topics: Emerging Megatrends and Technologies
- Next-Generation Connectivity
Core Areas: Internet offerings, Cloud Interconnectivity, SD-WAN, and NaaS with on-demand and pay-as-you-go features.
- Trusted Cloud
Data Sovereignty: Emphasis on compliance with EU regulations, including the joint venture with Cap Gemini named BLUE which is a dedicated Microsoft Azure cloud and Office 365 instance that both parties can sell to clients.
- Cybersecurity
Managed Services Growth: Orange Cyberdefense generating over $1.2B in annual revenues with a significant increase in managed services.
- GenAI
Impact on Cloud Compute and Connectivity: Innovative use cases like converting Cobol to Python for legacy IT stack integration to the cloud. This use case shows how Orange Business can make a software MVPs (minimal viable products) and iterate it future uses and positions them well as an innovator vs operator.
- Sustainability
Sustainability Targets: Integrating sustainability targets into business bids, particularly in the public sector.
Moving to the Core Business
Orange Business continues to operate a network in 90 countries, emphasizing the critical role of the network in supporting AI, cloud, and security services. A recent integration with Palo Alto’s SASE offering highlights the importance of network transit times and performance for seamless collaboration platforms. For example, the specific network transit times (ntt) were slightly reduced but the crucial factor was the tight tolerance of the average ntt (often <2ms) and drastic improvement over their current offering. The ntt is more predictable on a network operators’ network than a public internet; this is an important attribute that drives the overall quality of experience. For example, a collaboration platform like Microsoft Teams that have a low ntt with predictable transit times allow all the voice, video, and applications to work better. The tight tolerance allows features to work seamlessly without disruption but most importantly reduces jitter. These tight integrations will be fruitful for future networking needs of public and private Generative AI applications. As we heard a few times at the conference, if there is not a network there is not a cloud.
Wrapping Up and Final Thoughts
Most operators are finding top-line revenue challenging over the past decade, Orange Business is managing the decline in connectivity by expanding digital IT services. Orange Business has outlined a strategy focused on offering more digital and professional services while maintaining and optimizing it connectivity business. Their approach is to do more by offering less, concentrating on areas where cloud, cybersecurity, and connectivity (the 3C’s) intersect the most. This strategic pruning of their portfolio is about 40-50% complete, with an additional 12-18 months expected to finish execution. This positions Orange Business as a major player in the European digital integrator space, with IT services now representing around 47% of revenues, expected to surpass 50% in the next 1-2 years.
Frost & Sullivan’s analysis indicates that Orange Business’s strategic investments and focus on digital transformation will continue to drive growth and innovation in the digital infrastructure space.
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To explore growth opportunities in enterprise network services, connect with our growth experts at: Stephen.thomas@frost.com
