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Transforming the Business
The highest value of the One IT program is the strategy it enabled. "We were always on an innovation curve," says Rangaswami. "The transformation is leveraging what we were doing as we got our own ducks in a row. We had to make sure we had the structures and managers in place to meet our objectives of improving the customer experience by building our network and getting out of the way to let the customers do self-service."
BT's plan for networked IT services is that 70 percent of customers will use off-the-shelf versions of its offerings, 20 percent will have to do some assembly and 10 percent will require custom service. The global IP network is extremely important to the strategy. "It's not just pipes, it's virtualization--the ability to manage the application that is running in a transparent and agnostic location," says Michael Boustridge, president of BT USA and Canada.
One key is for BT to be involved in the application layer--which is critical to the model--as well as the network. "We provide people where people are relevant, software where software is relevant; the key thing is service," Rangaswami says. "Software as a Service is very much a part of that."
Adds Boustridge: "The network outsourcing discussion is really about enabling the application for competitive advantage." A big financial services customer, for example, wanted to put new applications on the network to permit low-latency trading and shave milliseconds off trades as a competitive differentiator.
"It's great to have a network that's redundant and diverse, but you have to multiply the complexity of that operation by the number of applications that run on a network and can run anywhere in the world," says Boustridge, who joined the company in 2007 from EDS, where he was vice president of global sales and marketing. "We've bought a lot of data centers, but that's running boxes. We're running applications, making information secure, and that means designing and engineering to suit a particular environment."
Another key element of BT's growth strategy has been acquiring companies that address specific aspects of its New Wave businesses. "Each individual asset brought capabilities we need," Boustridge says. These include the 2004 purchase of Infonet, which provides global networking capacity, for $965 million; the $175 million acquisition of Radianz from Reuters in 2005, which strengthened BT's position in the financial industry; the 2006 addition of privately held Counterpane (for an undisclosed price), which brings security capabilities; and the $196 million purchase of INS in 2007, which adds consulting services to BT's arsenal. "Wrap them all together with the 21CN investment, and the acquisitions make sense," Boustridge says.
Consumers, not just large businesses, also figure in BT's plans. "Say you are sitting on a beach in a remote place, and your friend texts to say you need to watch yesterday's episode of Heroes, Rangaswami says. "You've got your Mac and Slingbox, but you find the bandwidth on the beach is not enough. You have the capacity to serve yourself to get the bandwidth you want."
To do that, separate disciplines within BT, including operational support and billing, have to come together. And it can be done without BT owning every mile of the network. "It's the wrong century to make network delivery an arms race," Rangaswami says. "There has to be a level of partnering to do this." In many places, including China, India and Africa, the network will include wireless components. The 21CN platform is meant to accommodate all these realities and to allow users to do what they want without seeing the complexity behind it. "The customer wants to buy the car," Rangaswami says, "not the parts."