Is the future bright for Orange Business Services?
Earlier this week, at Le Carrousel conference venue situated deep underneath La Louvre, customers, partners and employees of Orange Business Services (OBS) gathered in Paris for its first physical strategy summit since the Covid-19 pandemic.
And certainly, a lot has changed at the French telco’s business service arm since March 2020.
While the lion’s share of OBS’s revenue used to comprise of connectivity, fixed voice and mobile lines, today it accounts for 57% of its business – a figure the firm acknowledges is rapidly dwindling as clients and their remote/hybrid working employees continue to migrate to lower cost IP-based video conferencing tools such Zoom, Teams and WebEx.
There have also been two key leadership changes at France’s state telco: Christel Heydemann replaced outgoing president and CEO Stéphane Richard as Orange’s new CEO in January, while in May OBS’s VP of customer services and operations Aliette Mousnier-Lompré stepped up to become its new CEO.
At Tuesday’s conference Mousnier-Lompré announced that OBS was in the process of changing its operating model, making a pivot from a connectivity services provider to a digital services firm that will support customers as they undergo digital transformation in the areas where connectivity meets data, cloud and cyber security.
“We’re in the process of discussing the details with our unions and social bodies to change the operating structure of OBS to pilot our model from a ‘telco like’ model towards a digital services company model,” Mousnier-Lompré confirmed.
“In the future I want the company to be driven from a financial perspective through our geographies in a customer-centric way rather than having it monitored, as it is today, by business lines that are operating in silos,” she added.
“I’m also working on unifying our marketing teams so that we have a proper value proposition and reshuffling the executive management team to have different profiles – more IT-driven profiles and more international profiles.”
Pivot towards IT
A former semi-professional football player for Paris Saint Germain, the Macroeconomics and Geopolitics graduate is clearly used to making pivots and claims that the move to transform OBS’s core business makes sense.
“We are in a paradox: OBS is both an operator and an integrator. We have part of our business in IT, which is sky-rocketing, and other areas of business that have been hurt by change of usage and the dynamic of what happened to the market after Covid,” she explained.
“So, we are transforming this core business to provide a new generation of connectivity which finds itself at a crossroads between connectivity, cloud and cyber security. As one of the largest B2B telcos in the world and having large capacities in cyber defence we are very well placed to do this.”
According to the exec, OBS’s IT activities (which include its professional services around cloud, cyber, data and AI) have growth rates “above 10%” which, she added, was “in line with the market”. She stated that further growth “organic and inorganic” was in the pipeline.
Acquisitions are likely soon, she said, and would come in the areas of cyber, cloud and data services – especially in the European countries where OBS wants to be strong, as it seeks to build up its IT prowess.
And while Orange has pulled back from investing further in cloud infrastructure following the dominance of the US hyperscalers, it claims there’s plenty of scope to help customers make the transition to cloud, if they haven’t already done so, and to navigate the sometimes complex multi cloud and hybrid cloud environments that many firms find themselves operating in.
“We have lots of experts today who are able to work on Azure, AWS and Google – and I think that’s a good illustration of what we want to do overall: we see ourselves as a kind of end-to-end orchestrator in a world which is open with lots of different technological innovations,” said Mousnier-Lompré.
She added: “We want to work with many partners. We don’t think this will come solely from what we do, although we will have products of our own, but we really want to be a kind of modular platform that will bring together connectivity to the cloud with solutions from partners and a layer of integration that we can offer.
However, the elephant in the room, or, as the French say, “le secret de Polichinelle”, is that OBS is moving into territory currently occupied by dozens of established players – all fighting for talent and clients.
What sets OBS apart from an Accenture, IBM’s business services division, or Capgemini?
“There are some similarities. but there are some differences,” said Mousnier-Lompré, who stressed: “We are not a vanilla flavour digital services company.
Rather than plain, she outlined the company’s orange-flavoured USP: “We are among the top three experienced players in this new generation of connectivity around virtualised networks. So, this ability and this expertise to be able to orchestrate projects from end-to-end – including the network (local and global) – that’s a differentiation from us among traditional integrators,” she added.
At this week’s event there were certainly no shortage of customers willing to come forward and share how OBS has supported them in their digital transformation journeys.
La Poste outlined how OBS helped it build virtual private networks during the pandemic so that 20,000 of its postal workers could operate remotely and is also helping it to build out a platform that will enable it to compete digitally.
OBS is also helping a number of firms access their data more efficiently: contract catering company Elior’s CIO Joanne Deval, for instance, said that Orange’s AI and data expertise has allowed the firm to come up with better school dinner options, communicate with end users and to address issues such as food waste.
Giovani D Abuekki, CIO of insurance company AXA, highlighted how the telco operator was helping it to work smarter with data to offer their customers better deals.
On the cyber security side, customers such as La Mutuelle praised OBS for being a trusted partner. The insurance company’s director general Christophe Harrigan added: “We know that some criminals want to destroy our infrastructure. We need experts to protect us from the best aspects of attacks. Partners need skills and competence in IT but with one eye on the future and Orange responds to these objectives.”
OBS also appears to offer many solutions for the businesses it’s traditionally supported, such as customer service contact centres, for instance, where it is installing tracking systems, voice robotics and authenticated and automated payment systems.
The firm’s ability to provide connectivity through its 5G networks may eventually see it become a key provider for smarter factories too as they transition toward Industry 4.0.
Last year security firm Safran chose smart tracking IoT solutions for its aeronautical division to remotely locate and manage all its tools and equipment in real time.
There’s also an interesting case study from Merem, a 50-strong French SME specialising in electronic circuit boards. Its CEO Bruno Bailly told Orange stakeholders how OBS was helping small companies in France start to manufacture electronics again.
“We are the first small company to use 5G and Orange let us be pioneers in this aspect. We have 5-10 edge computing use cases in production for machines that communicate and use AI. We have these autonomous robots which monitor flows in the plant – censors that will manage the energy and collect data, we have a supervisor that manages flows. We also integrate a digital twin of the plant and plan to use the data to improve efficiency,” he explained.
“Electronics manufacturing is now 90% from Asia for the past 30 years; now it will not reverse totally but, with investment, we will become more autonomous in 10 years,” Bailly added.
While 5G could well be a key differentiator for OBS – with more projects in the pipeline for next year, Mousnier-Lompré acknowledges that “the ecosystem around industry 5G smart industry is still a growing one”.
And neither 5G nor its new business services currently make up for the losses OBS has suffered as fixed voice services drift away.
Like consumer markets, businesses may start to shop around for separate data, cyber and connectivity packages if it helps them stay on top of the cost-of-living crisis.
War on talent
The other challenge the firm faces as it moves into the digital services arena is securing the right specialists. As Mousnier-Lompré noted “there’s a war on for talent” which inflates the price of projects as the cost of training and recruitment rises.
To address this, the exec added that there’s been an aggressive training strategy internally to promote mobility, including international mobility.
Another successful program targeted former OBS employees by running a video campaign that interviewed re-joiners. There are also socially driven campaigns by the operator in territories such as Brazil and India that focus on women from underprivileged backgrounds who are trained up by OBS to work in the digital services economy.
But perhaps the strongest differentiator between OBS and its competition as it moves into IT services is its new leader, a former sportswoman who can think on her feet when the game isn’t going according to plan.
TechInformed asked Mousnier-Lompré at the event what she has learned about business from her earlier career on the football pitch. She replied that it was all about trust, teamwork and building up highly functional complimentary teams.
“In soccer you have a team focused on the same objectives – it’s the team above the individuals, so what really matters is the team results,” she said.
“And within this team what matters is the complementary skills. You can’t have 11 goalkeepers or 11 midfielders. And you also need to trust these players and their ability to make decisions – because what happens out the on the field isn’t always what you had planned. You need the players to be able to know the strategy but to pivot when they need to,” she added.
Subscribe to our Editor's weekly newsletter