At the Orange Business Services Analyst Days 2020, Orange unveiled its Engage 2025 growth strategy, and the company has been leveraging this growth lever since then. A successful B2B ecosystem cannot sustain without an efficient value chain, and Orange established several new partnerships and reinforced the existing ones.
ISG analysts attended the Orange Business Services Analyst Days 2021 and found the company has been living up to the Engage 2025 strategy by investing in customer trust, resources and operational sustainability, which has resulted in overall growth, scalability and transformation.
Retaining core strengths and reinventing itself
As global economies shift their focus from globalization to digitalization, the notion of trust has become critical for enterprises. Orange has been successfully gaining the trust of enterprise customers with several customer-centric activities, such as its recent sovereign cloud endeavor. Furthermore, the pandemic highlighted Orange’s service delivery proficiency, which has translated into trust for customers. Its end-to-end engagements have been testimony to the company’s value proposition with respect to its trusted infrastructure and digital services. Its infrastructure has been the result of significant and continuous investments, including more than 450,000 kms (around 280,000 miles) of subsea cables. As a result, Orange’s net promoter score in H2 2020 was up by 7.5 and 8 for French and international customers, respectively, from H2 2019.
Instead of rebadging itself as a system integrator (a strategic step often taken by telcos), Orange has leveraged its telecom DNA to offer digital solutions that require its unique amalgamation of the network native component (the trusted infrastructure) and core services. The company has identified four key areas of focus, namely, cloud, cybersecurity, digital and data, in addition to smart mobility services in anticipation of 5G. It’s this telecom DNA that has enabled Orange to contribute to the fundamental transformation of legacy systems. As fiber gets deployed worldwide, companies are looking for new technologies such as software-defined architectures and orchestration in the form of SD-WAN and SD-LAN. Orange has leveraged this trend to give momentum to its SD-WAN rollout, globally, from LATAM to Japan and Russia, at scale.
Absorbing the pandemic aftershocks with system integration
Due to the pandemic, Orange’s core telecom business saw a growth deceleration by 3.6%, with roaming – a significant contributor to the profitability of the mobile services business – taking a major hit. At the same time, its IT integration business grew by 2.3% due to the COVID-19-related restrictions, and triggered relevant offerings, with a focus on innovation in its new developments in digital services. These offerings have, in turn, bolstered the IT and integration services business revenue, which reached US$7.8 billion, representing 40% of Orange’s overall revenue. This proportion jumped from 27% in 2016 to a 41% in Q1 2021.
Orange has crafted specific business strategies to take its hyperscaler partnerships to the next level. Some of these initiatives are detailed below.
- Bolstering hyperscaler partnerships: The company became a Google MSP partner as a part of its global strategy to integrate data-driven intelligence and AI into its telecom operations. Most of the upskilling and reskilling activities in the last year have been around creating a standalone hyperscaler practice that cuts across all the digital service domains, namely, cloud, digital and data. In the cloud arena, Orange has initiated a project to improve its cloud-based collaborations. This is essentially directed towards maintaining sovereignty of data in all possible ways for any entity i.e., a country, region, enterprise, or government. Consistently, this new area demands data intelligence capabilities as well as a robust infrastructure, and Orange ensures that the relevant skills are integrated within the functional service lines. This helps it scale its cloud offerings to drive its growth trajectory. The company embarked on the digital services learning curve more than six years ago. It has also been working with hyperscalers, such as AWS, and has been one of the first few worldwide Re:Stack partners. The company has been a part of several alliances such as Future4Care, AGDatahub and Bleu. Future4Care is focused on creating an e-health services platform in France and Europe, and also involves Capgemini, Sanofi and Generali as partners; Agricultural data hub (AGDatahub) is a blockchain-based cloud platform for agricultural data and supply chain monitoring ― from crop to the end product; Bleu is a partnership between Orange Business Services and Capgemini that uses the Office 365 and Azure stacks from Microsoft.
- Trailblazing with a sovereign setup in Europe: With Bleu, Orange has established the first-of-its-kind sovereign cloud setup outside the U.S. ― a cloud infrastructure owned, run and operated by two France-based companies. In this alliance, Orange is an integrator of Bleu solutions. However, offerings such as Azure and O365 can also be integrated by others. Orange is working on creating a trusted cloud ― the sovereign cloud ― that will afford data security assurance from the highest authorities of the French state. This is in line with the security protocols/policies of the French government around the highly sensitive area of digital sovereignty and data sensibility. The services would be provided to the French public administration as well as to critical infrastructure such as utilities and gas companies. Furthermore, the company is a founding member of the Gaia-X cloud project, which is a part of the Belgian non-profit Gaia-X Foundation. The initiative will provide transparency to cloud service buyers, enabling them to scan the available services based on their location in Europe.
Showcasing superior customer success
The message that Orange is focused on creating positive outcomes for customers has penetrated a cross section of enterprises, resulting in emblematic new wins and renewals. For instance, the company is helping personal device OEMs in Europe connect products such as laptops and tablets with 4G and 5G, delivering up-to-the-minute “PCaaS” offerings. Orange promises quantifiable business outcomes and transformation for clients. For Veolia, Orange integrated network and digital services to ensure digitization of its water monitoring services globally.
At the Orange Business Services Analyst Days 2021, Orange presented the testimony of Schneider Electric, which achieved 50% more productivity from factory workers through appropriate industrial knowledge. As explained by the CEO, the poor performance in the past was due to the time lost in identifying an issue and finding correct access to the relevant information. Orange used SD-WAN-powered 5G indoor coverage to leverage the knowledge available across the entity and on public databases to identify industrial problems faster. Orange’s ability to achieve the desired business outcome through infrastructure consolidation and innovation has been demonstrated across several accounts, including that with AkzoNobel. Apart from providing network connectivity, Orange also contributed to seamless operations and use of industrial technology.
Enhanced capabilities in machine learning enables Orange to deliver proactive and predictive maintenance based on its flexible SD-WAN; the company has been supporting several clients, such as Otis, with this. It also delivered critical infrastructure services to the China-based healthcare specialist, International SOS, while it was involved in building the Wuhan hospital when the pandemic broke out in China. It also provided associated services such as a customer experience solution for critical care services .
Overall, Orange has created optimal value across its engagements, often extending the scope of work to enhance operational proficiency for the customer. The company has successfully established a foothold in product engineering with a few customers in network-native or connectivity, engaging them in co-innovation projects. The company has been growing organically in the engineering and R&D services space and the client success stories reflect this progress.
Enabling clients to be in charge of their own growth
Orange is uniquely positioned to bring together the value proposition of a telco and a system integrator, complete with end-to-end expertise in data, network, cloud and security. This synergy is leveraged to have a positive customer impact around network native digital services. Orange is using its core competencies to evolve from being seen as a traditional networks expert to developing a system integrator persona, so much so that its robust integration business now contributes over 40% to its overall revenue. Despite not being one of the largest integrators, Orange has created a unique set of capabilities around integration of hyperscaler practices.
Instead of handholding the customers to ensure they are on track with their growth strategy, Orange focuses on empowering them to be in charge of their own growth. Accordingly, it has opened 25 APIs to its customers, with eight major service centers (including new ones in Madagascar and Morocco) and has conducted over 100 custom innovation workshops (as a part of its co-innovation strategy). The business sustainability of old customers during the pandemic is testimony to this, and new customers have benefitted by piggybacking on Orange’s roadmap to realize their digital transformation strategy. With its network-oriented foundation and associated core assets around network components, cloud and security, Orange has driven a secure digital infrastructure transformation.
The company has room for growth in developing a robust strategy to seamlessly integrate the capabilities from acquired entities, bring them together under the “Orange Business Services” umbrella, while accentuating the differentiating capabilities of the entities in targeted regions.
ISG Provider Lens has been tracking the activities of Orange Business Services in the areas of enterprise network and the company’s evolution as a network-native digital services specialist from a pureplay telecommunication service provider. ISG Provider Lens finds Orange to be ideally positioned in this dynamic arena of digitization. Orange’s promise of “global vision and local care” assure round-the-clock support, globally and locally. The company has been taking strides into cybersecurity and smart mobility services, bringing value from cloud, SDN and analytics, with a consulting wraparound to focus on business outcomes. The company is a believer of B2B as an ecosystem and is working toward establishing itself as an ecosystem innovator by way of the right partnerships.
About the authors
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.
Avimanyu is a Lead Analyst (Research) in ISG India operations, bringing over 10 years of experience in market research and consulting. At ISG, Avi’s focus is on the disruptive technologies and innovations pertaining to enterprise networks and engineering and R&D practices.