Technology Value is What the User or Customer Says it Is

Customer value might be defined as “the perception of what a product or service is worth to a customer versus the possible alternatives.” When new technologies are created, developments have some idea of why they believe an innovation will provide value. 

Sometimes, customers disagree. They see value, but not where developers believed value would exist. Unintended uses, in other words, happen. Technologies and products are used in ways developers did not foresee. Using Xbox controllers to fly unmanned aerial vehicles provides one example.   

Text messaging was a byproduct of instituting Signaling System 7. TCP/IP became the global telecommunications next-generation protocol when it was originally intended to support military computer communications under conditions of uncertainty. 

Consider multi-access edge computing. The stated value is ultra-low latency performance. But connectivity service provider executives say their own belief is that MEC’s greatest value--as a means of moving workloads to the edge,  will be a reduction of bandwidth use or cost. 

But a recent survey conducted by Heavy Reading--94 percent of whom were connectivity providers--suggests the top motivator for moving workloads to the edge is to “reduce bandwidth use or cost.” “Improved application performance” was fourth on the list, ranked in terms of “top motivators.”

source: Heavy Reading 

To be sure, multiple values exist. But it is worth noting that the intended value as developed by suppliers  is not always the “perceived value” seen by end users or customers. 

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For as long as I can remember, calls have been issued that connectivity service providers are missing out on revenue opportunities from small and mid-sized businesses. 

Looking at 5G revenues, for example, BearingPoint and Omdia point out that up to 99 percent of all businesses globally are SMEs, though connectivity providers focus on enterprises. 

source: BearingPoint, Omdia 

That is an “untapped” opportunity, they argue. That is misleading. 

Omdia’s own data show that 63 percent of mobile operators believe large enterprises will generate the “most” 5G revenue. 

Omdia’s own data also suggest that 54 percent of service providers believe SMEs will generate the “most” revenue. That is hardly neglect, as 32 percent of respondents believe consumers will generate the “most” revenue from 5G. 

Keep in mind that mobility has, since the 2G era, been built on consumer revenues, not revenues from business. 

source: Omdia, BearingPoint 

But there are other reasons why smaller businesses are not specifically targeted. The cost of sales and buying behavior is virtually indistinguishable from the behavior of consumer customers. 

In the U.S. market, for example, 83 percent of all businesses are “micro” sized, having no more than nine employees. 

“Small” firms with 10 to 99 employees represent  15 percent of all businesses, while “medium” organizations with 100 to 499 employees represent just two percent of entities. 

If enterprise is targeted directly with field sales, then “micro” (83 percent of business entities) are marketed through the mass market channels. “Small and medium” organizations tend to be marketed to by partner and channel entities. Think of the role played by resellers and system integrators and distributors in the computing hardware business. 

source: CompTIA

So some of us would argue that mobile operators are not neglecting SMEs. They sell using mass market techniques tot he 83 percent of customers that behave like consumers when evaluating and buying 5G services. 

They use channel partners to sell to the mid-market. And they have dedicated field and inside sales teams to sell to enterprises. 

One can argue that more internal resources should be devoted to direct sales efforts for SMEs. But cost of sales is an issue. In many cases, the financial return from higher sales and marketing cost expended on most “small or medium” customer accounts would generate a zero to negative financial return, compared to using channel partners.

All of us have to define our terms: what is “small;” what is “medium” and what does that mean for marketing, sales and requirements? 

Also, are we talking about “new revenue sources” or “total revenue generated by segment?” It might, for example, prove to be the case that much “new use case” revenue is generated by enterprises, as they will be the entities deploying large internet of things and sensor networks. 

Those are non-phone revenues. But phone revenues might still be led by consumer users, as historically has been the case. 

The issue is “which are we talking about: new use case revenues or total or segment revenues?

Either way, though, it might be hard to make the argument that most of the return is going to come from SMEs, as compared to consumer or enterprise revenues.