We are one of the biggest service providers in Europe.

We also like to think of ourselfs as the most innovative technology company of all telecom or service providers. But the hard to learn truth is: we are in fact a mere commodity service provider. Which by itself is not a bad trade to be in.

Technology companies develop new technologies everyone else adapts and uses. This is a field we never participated in. We always used existing technologies to utilize them in new ways and develop new products for our portfolio. That is a great accomplishment, but is also something every commodity service provider does to some degree.

A great virtue of successful commodity service providers is to know, when to stop developing things on their own and optimize profits by relying on the work of others. This often enough burns down to a simple “make or buy” descision. In most cases we had developed platforms and services in the past, because there was nothing out there, we could buy, that met our requirements. So the logical descision at the time was to invest in engineering and the creation of new services.

Over time these services and platforms developed and we kept investing in engineering. At the same time the market evolved and now offers services and systems that are more or less identical to our developments, but without the engineering investment. The logical and business sensible descision today would be to buy the existing product and focus on optimizing our profits.

Instead we still try to reinvent the wheel by pouring tons of money into development projects for the devopment of new platforms and services, we could just buy with the same functionality at a fraction of the cost!

A short example from my past 2 years.

We were in the need to replace our virtual infrastructure, due to the approaching End Of Life for the existing system. A simple modernization wouldn’t have fitted into the corporate “Standards”. Building and maintaining the international standard datacenter platform failed 2 years earlier due to lack of workload in Switzerland and expensive maintenance effort and cost. So, in the end, we opted for a smaller design proposed as a customer dedicated tech-base platform, but suitable for our needs. At the time still in development. To speed things up, we decided to participate in the service development and in the end had the first productive service farm up and running in production.

Does not sound all that special, but it took 1 year from our involvement in development to the final implementation. 1 year of investment in engineering, management meetings, process modifications, ordering processes, discussions of scope, … For these efforts alone I could have bought the whole thing 3 times over again! Let alone, just buying something similar off the shelf would have saved 30% of the investment for each plattform system.

For a company that is insanely fixed on CAPEX reduction we sure do spend a lot of money on developing things we could just by from almost any vendor out there, because that is what commodity service providers do. They buy stuff at sensible prices to put into production for as little operational cost as possible.