The theme of the Orange Virtual Analyst Days 2020 was the promotion of Engage 2025, a new program in response to the COVID-19 pandemic and the low-touch, high-care digital economy. Engage 2025 reinvents the Orange operating model and puts data and artificial intelligence (AI) at the heart of its innovation roadmap. The company wants to make a lasting impact on society that goes beyond optimization of its business processes; its vision of going carbon neutral by 2040 is the best example of this commitment. The company has been diversifying its business, with an emphasis on verticals it considers comparatively recession proof. Also, Orange Healthcare, the eHealth subsidiary of the Orange Group, has been a smartly timed refocus for the firm. Armed with iron-clad AI and DevOps-driven capabilities, this business unit is turning out to be a differentiator in COVID times.
At the same time, the company is enhancing its enterprise IT and integration services. Between 2018 and 2019, it saw a growth of 26 percent in this business and hopes to achieve 55 percent of its revenue from IT and next-generation services by 2023. The company has started reaping the rewards of this rebadging exercise ― that of portraying Orange Business Services as an IT systems integration major. To reinforce this, Orange has been expanding and evolving around four key areas:
- Customer first: Orange has been progressing beyond the boundaries of SD-WAN to a full-scale roll up of SD-LAN ― executed vigorously for prominent clients such as Dutch-based DSM and US-based MARS.
- Convergence of the IT and the telco world: Orange has been strengthening its legacy voice business and honing its capabilities in areas such as cloud, DevOps and AI, thus fortifying its dual role of being a global carrier and an IT integration company. Accordingly, Orange has unified its core network with elements of IT to drive virtualization and “softwarization” of the enterprise network for clients.
- People empowerment and innovation: Orange has woven co-innovation into its DNA, nurturing the innovation potential of clients along with its own. The launch of innovation labs with customers, with the aim of exploring possibilities with disruptive technologies such as 5G and operational technology (OT), can be cited as an example here. Also, the company has lived up to its image of a reliable employer for its employees, as depicted in very low churn rates and avoidance of a shift to short-term agreements even during the turbulent times.
- Simplification: Orange has taken a “1+4” approach: committing its single business to improving its network presence and global capability with the help of four growth drivers. These drivers are: 1) digital and data, 2) smart mobility services combining mobile capability and IOT integration capability, 3) cloud and 4) cyber defense.
Grow, scale and transform are the three goals of the Engage 2025 program. The company has prioritized continuous growth in network virtualization areas such as SD-WAN due to the ever-increasing agility needs of enterprise networks. To achieve this, Orange has been scaling its IOT-driven use cases and transforming its business models to gain the trust of its customers and increase sustainability of its employees.
Creating an end-to-end transformation partner landscape is of paramount importance in steering an enterprise’s digital journey. This includes strong consulting capabilities along the lines of business advisory, business case identification, technology assessment and pilot execution. Multisourcing service integration (MSI) plays a key role in service integration and provides improved business outcomes, innovation management, transformation strategy and customer experience. Orange has greatly improved its clients’ journeys as they move from exploring technologies and launching pilots to developing business cases with innovation at the heart. The company showcased several interesting client success stories including shaping the market penetration strategy for a Norway-based logistics specialist and enabling the Netherlands-based fast-moving consumer goods (FMCG) giant become a more data-driven food transformation company.
ISG believes the following attributes demonstrated by Orange in the last year are creating differentiation in its interactions with and delivery to its clients:
Moving from a carrier-grade integrator to a network-native digital services expert: Rebranding as system integrators has been a challenge for most network service providers. In contrast, Orange has built a robust integration model, leveraging its network and infrastructure capabilities and its dexterity in digital services. Strategically, Orange does not position itself as a full-stack IT integrator; instead, it presents itself as a network-native digital services company. The company has been improving its customer operational efficiency and leveraging the value of data in the business ecosystem. It has identified three use cases as integral to its approach: first, infrastructure integration, which is required for business continuity; second, the convergence of workspace curing the move to flexible working models; and third, the convergence of IT/OT infrastructure for business agility and efficiency.
Focusing on a ‘requirements driven’ benchmark in a ‘solution led’ industry: As the B2B market tilts toward software-centric and data-centric projects, Orange’s digital integration solutions help customers integrate solutions on brownfield projects. The company uses proprietary application programming interfaces (APIs) and third-party applications to build large-scale enterprise solutions that link together to make the use cases. Orange’s design-and-build solution for a digital business park in the Middle East can be cited as an example here. The company administered 120,000 data points, 14 sub-systems and over 100 use cases, proving its credibility as a master system integrator. Furthermore, cross-functional use cases such as smart data service, smart parking, smart community, public rail, smart operations and facility and smart visitor management can accelerate customer’s go-to-market plans. Orange also has executed the deployment of an integrated traffic management system in India, as a fully managed system, with a focus on citizen safety. This kind of adeptness in digital integration ― spanning ideation to end user, interlocking with the other multidimensional parts of consulting and MSI ― demonstrates Orange’s ability to hold its ground at both entry and exit points, thus bringing value in terms of people, purpose and process relative to the environment.
Donning the cybersecurity virtuoso cloak: The cybersecurity services market is dominated by system integrators. Therefore, the acquisitions of SecureLink was critical in the establishment of Orange Cyber Defense (OCD) as a global parametric security threat measurement and intelligence specialist. The addition of UK-based SecureData increased the trust of local enterprises, making them more willing to outsource their sensitive cyber defense support requirements.
The company’s security capabilities have been boosted further in the network transformation tower with the integration of Fortinet-based SD-WAN into the Orange portfolio. Taking a granular approach to security, it has created a powerful platform for software-defined functions, with significant compute power in the Fortinet edge device, thus devising a solution for customers with budget constraints and security requirements.
Revving up the hyper-connectivity flywheel: Enterprises with their foundation in the cloud are more stable than those with on-premise infrastructure. Industries like FMCG and Consumer Electronics have moved to e-commerce, necessitating an alignment to the low-touch digital economy. Thus, enterprises are adopting new business models and capturing a new range of value by interweaving digital technology with human resources.
Orange’s Global Vision Local Care service approach is based in its network-native foundation and spearheads its enterprise IT integration services. These services include orchestration and consulting, as well as proprietary solutions such as MSI. The approach has supported its business continuity strategy by boosting network capacity through initiatives such as increasing transatlantic cable capacity threefold, for westbound traffic, as France went into lockdown.
Orange has reinvented its customer experience services, moving away from traditional unified communications and collaboration (UCC) tools and toward more holistic services for customer journeys. To trigger new solution deployment on customer premises, Orange drives change management at employee level. The digitalization exercise executed for an UK-based electronic component supplier, for example, spanned replacement of contact center solutions, remodeling the voice business and managing the unified communications.
Promulgating cross-vertical excellence: Cross-sectional partnerships in an industrial value chain help Orange drive vertical-specific projects quickly and effectively. In the Automotive vertical, for example, the company engaged three Japan-based automotive OEMs through its partnership with the country’s telecommunications operator KDDI. The value proposition brought in by Orange went beyond the classic telematics services to a more holistic solution termed as B2B2X. The solution can be portrayed as “internet on the move,” enabling connectivity through a single SIM on a handheld device, using the onboard Wi-Fi or the installed infotainment system. The best practices of such operator and integrator associations can imply considerable value even when extended to enterprises in other verticals, such as consumer electronics.
5G-fortified advanced analytics have significant potential in meeting the connectivity challenges in complex environments such as in the Logistics industry. Orange has tapped such an opportunity in a heavy shipping port in western Europe, where it supports applications like route optimization for ships and push-to-action safety measures for workers in case of an emergency. With the presence of several enterprises, including oil and gas majors, the port requires an easily scalable and deployable connectivity infrastructure that includes augmented reality/virtual reality (AR/VR) driven inspection and remote machinery maintenance, among other advantages. Furthermore, the company has been working on using analytics on the outputs of HD-cameras installed across the facility for capturing images of ships in the harbor, for effective planning on docking, refueling and unloading.
Meeting mobility needs with a productized approach: The challenges of country-specific solutions for traditional mobility – such as differing billing systems and terms of offer by country – results in multiple contracts for vendors. These roadblocks often mean high overhead costs and dissatisfactory performance for customers with a global presence. Orange has presented a unified MSI approach with a global service desk, by automating and centralizing data collection from customers and mobile service providers. The IT service management (ITSM) platform MobilityNow is a specially adapted ServiceNow solution for managing the mentioned services for large accounts and is expected to be a key enabler for consolidation and digitization of support mobile services such as request, change and incident management. The new platform is expected to drive customer cohesiveness, paving the way for additional service sales in the near term.
Orange has been categorizing its customers’ recovery in phases, from return and reimagine to withstand the pandemic to make way for a more durable and sustainable future. Orange delivers guidance, on an operational front, for improving short-term cash flow beyond TCO improvements. The guidance encapsulates the holistic management of office buildings and factory productions through agility and seamless connectivity. The company has embraced key partnerships, such as the one with a Switzerland-based automation and engineering specialist on co-development and joint go-to-market strategy, with the intent to dynamize building management functions.
Caution statements
Geopolitical turbulence has a major influence on today’s world, often depicting a myopic view of emerging connectivity ecosystems. As a result, global businesses like Orange, which have a strong presence in China and Russia, are impacted. Orange has been working with Huawei in EMEA ― providing network capabilities and cloud services as well as Huawei equipment in some countries in Orange’s core network. While Orange is set to play its wild card as the new network-native champion of digital services, its engagements with Huawei could attract virulent reactions in different geographies, particularly the U.S.
However, despite the restrictions, it is difficult not to underestimate the degree of innovations coming from Huawei and the overarching network ecosystem in China. Service providers, including Orange, should find a way to participate and contribute to this technology revolution in a responsible way.
A slow but steady recovery from COVID-19 is compelling enterprises to adopt a fresh outlook on networks. The situation has been a wake-up call for enterprises that have been delaying their cloud journey, convincing them they must innovate or perish. While the co-innovation and joint go-to-market approach adopted by Orange is often suitable for enterprises embarking on their digital journeys, what is often required is the involvement of a niche technology vendor. Engaging these emerging players (often start-ups) with very specific solutions often turns the tide in favor of the provider in case of a transformation project. There is, therefore, an opportunity for Orange to refurbish its start-up accelerator programs and reinvent its models of engagement with small and medium-sized enterprises.
Closing Comments
The COVID-19 pandemic has changed the technology market. A great deal of onsite network engineering will soon be outmoded. However, finding the right balance between remote and onsite networking represents a major challenge for network service providers. Orange’s strong grasp of network and digital practices and its ability to leverage cutting-edge technologies such as the multi-element edge cloud to move intelligence closer to the enterprise sets it apart from other providers.
Orange’s goal of seeing 55 percent of its revenue from IT services would necessitate a more solution-oriented approach. The company should carefully strategize its internal transformation not only from a skillset perspective but also from an organizational culture perspective as it enters new markets such as Asia and Africa. ISG considers Orange’s penetration in these emerging economies as a well-timed move, even though many of its compatriots have been wary of taking this step due to the cash-strapped nature of the markets and the corresponding belt-tightening of the market players. However, Orange has a compelling short-term roadmap.
The Orange Analyst Days 2019 made clear Orange’s ambitions around digitalization. The company’s offerings have gone beyond the IT world and entered the OT world, encompassing operational and maintenance services of assets such as industrial machineries. These legacy assets, specifically in the Manufacturing sector, are often few decades old and need to be connected or can otherwise be exposed to threats.
Overall, the provider has been living up to customer expectations even in dire times. The company is continuously reinventing itself, sharpening its focus on innovation and embracing partnerships. ISG will continue to monitor and analyze the company through the ISG Provider Lens Program™ and will position it among important trends in the market.
Associated Insights
ISG Provider Lens™ Network - Software Defined Solutions & Services – U.S. 2020
ISG Provider Lens™ Network - Software Defined Solutions & Services - U.K. 2020
ISG Provider Lens™ Network - Software Defined Solutions & Services - Nordics 2020
ISG Provider Lens™ Network - Software Defined Solutions & Services - Germany 2020
About the authors
Jan Erik Aase
Jan Erik and his team provide ISG’s advisors and its clients with essential research and insight into the rapidly evolving technology and business process outsourcing landscape, the major players and innovators in those markets and the relative competitive value they deliver. He sees his core role as empowering excellence—in his team, in ISG’s advisors’ knowledge and ability to deliver, in provider solutions and in client relationships and outcomes.
Past achievements for clients
Since spearheading the creation of ISG Provider Lens, one of the firm’s signature research publications, Jan Erik has continuously expanded its geographic and subject matter breadth, listening to both clients and the provider community to create a truly comprehensive resource.
As a research partner, principal analyst and global head of ISG Provider Lens, Jan Erik has, among his many accomplishments:
- Advocated for and built a core team of analysts in India into a global research powerhouse, creating one of the industry's most trusted and sought-after research organizations.
- Introduced research solutions specific to the public sector, creating sophisticated and dedicated reporting and insights that deliver the depth and quality of private sector research to local and state governments.
- Leveraged his deep interest in living responsibly and sustainably to help ISG become a leader in ESG best practices, and to provide its clients with research to help them do the same across their businesses and provider networks.
Heiko Henkes
Heiko Henkes is a Director and Principal Analyst at ISG; in his role as Global ISG Provider Lens (IPL) Content Lead, he is responsible for strategic business management and acts as thought leader for IPL Lead Analysts. His core competencies are in the areas of defining derivations for all types of companies within their IT-based business model transformation. Within this context, Mr. Henkes supports companies to undergo continuous transformation, combining IT competencies with sustainable business strategies and change management. He acts as Keynote speaker in the context of digital innovation.
