Episode 3

Speaker 1: Accelerators from Beyond Now. Hello and welcome to Accelerators by Beyond Now. Join us as we speak with industry leaders and explore the big opportunities ahead in 5G, IoT, AI, and cloud, and the role of the ecosystem. We discuss how to stay ahead and what technologies, innovation and business models are driving the industry to accelerate.

Michal Harris: Hi, I'm Michal Harris, head of marketing at Beyond Now, and I'm here with our host, Jeremy Cowan, co-founder of IoT Now and VanillaPlus. And today we are here with Danny Kelly, the head of innovation at Vodafone Business UK. Danny is a member of Vodafone's UK senior leadership team. And he's responsible for emerging technologies considerations and incubation, including 5G and IoT.

Jeremy, did you know that Danny has flown to London and Ireland every week for the last 10 years, but apparently he has spent every single week of the pandemic in the same room, proving he doesn't need to leave the room to be productive?

Jeremy Cowan: This is so true, isn't it? We've all learnt that our lives can be very different over the last year. Danny, welcome to our room. And it's lovely to have you here.

Danny Kelly: Thanks very much, Jeremy. Yeah, no, absolutely. I actually think what we've learned from the pandemic is probably that we're all working virtually anyway, and it had creeped into our lives. And we have to really ask ourselves, how much business are we actually doing, in a face-to-face versus virtual environment anyway? So it creeped up upon us, and I think we were well-prepared. Certainly some companies were well prepared for it when it arrived.

Jeremy Cowan: Absolutely true. I think a lot of us are experiencing a new way of working, but that's sometimes more innovative, and I really want to understand what your innovation team is doing to deliver new and better services to customers.

So welcome to the Accelerators podcast. Danny, what led Vodafone to introduce an innovations team and how has that innovation helped during the pandemic?

Danny Kelly: I suppose, Jeremy, we've always been quite proud of our innovation at Vodafone, our initiative firsts. And we have a history of firsts within the company. But over the past number of years, we have begun to transition as a company from a telecoms company, to a tech comms company. And that's pretty important actually, because the technology is advancing in a way that actually we're seeing a massive shift, in terms of what we can deliver by way of outcomes to customers. And therefore actually, the opportunity is now for us to begin that journey as a tech comms company. And we've said that from our senior leadership team, right the way down, and it's very relevant. And actually, it has stood by us well as we moved into a situation around the pandemic. Simply because the pandemic, as we've all seen, has created an acceleration of change, and has sped forward the clock, I would say a number of years, probably two, three, four years, if not more, in every industry. So having an innovation team happen to focus on businesses and business outcomes during that period has been an ideal position to be in for us.

Jeremy Cowan: So what exactly has the role of the innovation team been, in defining Vodafone's 5G strategy? And looking out further, what opportunities do you see for players like Vodafone in this context?

Danny Kelly: So the role of the innovation team, we play a key role in determining how we stitch together the innovation portfolio. So we've got 5G, IoT, edge computing, all of these things hang together, but ultimately they're technology names. And actually customers don't necessarily understand that, and nor should they, Jeremy. They should understand their industries and they should understand how we can bring solutions to those.

So I see innovation in two fronts. I see the innovation within the industry and within our own company and the creation of the innovation around our portfolio. So, the race for edge computing or 5G or IoT solutions, or whatever it may be. And we can wrap those up and talk about the innovation that we're creating at a network level, which is great. But actually what's more interesting for me, is the innovation that we can now create in customers' businesses, in each of the industry verticals, whether that's manufacturing, healthcare, transport, logistics, it doesn't matter, we now are enabled through that technology to begin to create those industry firsts, and the innovation through industry verticals. And that's the role that I'm playing within my team and in my business, is the diffusion of that innovation of our own innovation, but leveraging that to diffuse that innovation into industry verticals and create those new business outcomes. Quite exciting stuff.

Jeremy Cowan: It is exciting. You've mentioned a number of industry verticals there. There's a growing feeling in some quarters that 5G will best be achieved in verticals such as industrial or automotive. Do you agree with that? And if so, can you share your thoughts and experience?

Danny Kelly: Yeah, absolutely. So 5G brings with it standard attributes, speed, latency, bandwidth, all of these core capabilities. As a network, it offers customers benefits that are horizontal. So security and [inaudible] service, and guaranteed capability of speeds, all of these things that come with 5G inherent in it. But actually, it is about vertical outcomes, Jeremy, and therefore the realization of the benefit of 5G will be delivered through those business outcomes, into each of those industry verticals.

I think there's a lot of textbook work leading up to the launch of 5G, around where will we see the demand? Which industry verticals will grab a hold of it first? Is it government smart cities? Is it healthcare? And actually, it's been quite interesting, the reality versus the textbook, as always is the case. We largely expected to see most of the early adoption happened in major MNCs, in that multinational corporate space. And really what we've seen is that the SMEs and the top end of SMEs are super keen to adopt 5G, innovate, try new ways of doing things, adopt the technology, and that has meant that we've been quite surprised by the types of customers who have reached out to have innovation conversations or transformation conversations, at the bleeding-edge, leveraging that new technology. So that's been the surprise.

So no one industry vertical more so than any other, but actually it's the type of customer that we're seeing. So it's not the multi-billion pound corporations, but maybe our local university or a port or a council. And that's what's been quite interesting, and these are great projects to be involved in.

Jeremy Cowan: So you're seeing SMEs as much in healthcare as in say transport and logistics, automotive, they're all buzzing as areas. They're all showing similar degrees of development.

Danny Kelly: They are. And I suppose they operate in competitive environments anyway, so I suppose the opportunity is there for them, but also the challenge, the risk. So if they don't adopt these new technologies, can the competition get a hold of it before the market can develop? So yeah, it is the SMEs.

But also, it's smaller public sector as well, Jeremy. Public sector have been quite active in this space. Local councils, local government, local ports. There's been a great area of innovation. How do we address rural Britain, for example? How do we not leave anybody behind? And that's core to Vodafone's values. How do we use connect technology for good? How do we make sure there's no digital divide? And that focus we're glad to see. It's happening all across the UK.

So we're involved in projects in the rural communities, in ports, and therefore technology is being ridiculously spread across the country, and adopted in different shapes and forms. And it's great for us to be a part of those projects.

Jeremy Cowan: I wanted to ask you about those vertical solutions. Because traditionally, communication service providers haven't always been particularly strong in building vertical solutions in the 3G and 4G era. How are you overcoming this? And how does Vodafone utilize the ecosystem in this process?

Danny Kelly: I think before... And you're obviously true, Jeremy, it's correct when you say that. I think telcos globally have been very guilty of creating products and then selling those products. And they're mode of operandi is, we build it and sell it, then run it. And typically those products would be horizontal in nature, mobility, or fixed connectivity or internet access. and that was fine actually, it served its purpose, but we've got to a stage of innovation now, where it enables us to bring a very many different outcomes. So when we deliver 5G, and 5G can deliver technology speeds faster than the human nervous system, I mean, that in itself is a fascinating statement. What does that mean then? That means that we can deliver lots of different transformational outcomes that hang off the back of that technology. Therefore, when we engage with customers and whether that customer is in one of the industry verticals, or a public sector, it doesn't matter, they're quite interested in the role that we play in helping them deliver those outcomes.

So what is it? They're very interested. What is the outcome that I can achieve? And for me, customers typically fall into two camps. We fall into the camp of, camp A, customers are waiting for the technology to come along. They've got eyes on the technology, they've got eyes on the application that they want to use, and they've been waiting for edge computing to come along with 5G and all the latency benefits do that. Or customers that are super aware that they can now begin to think about they can transform, but they want us to guide and support them on those applications. And therefore it's incumbent upon the operators to change the way we do business. So we've got to focus on what is our customer's problem statements? What is our customer's outcomes? What are they trying to achieve? And then, harder we partner and play a leading role in that, and there's an expectation from customers now, that the telco operator will play that leading role in helping them pool together the ecosystem.

But that's new for a lot of telco providers. They probably didn't do that before, but a tech comms company, they would do that. And we absolutely fit ourselves into that space. So we play a leading role, and we're happy to do. And the reality is, as marvelous as the technology is around edge and 5G, the real interest and stuff is the applications through those third parties that we can hang on to it.

Jeremy Cowan: This is really a transformation, where the partner ecosystem's coming in. Michal, what are your thoughts on how to make the best use of the ecosystem?

Michal Harris: First, Danny, thank you very much for sharing. It's fascinating. And it's great, really great to hear that Vodafone is taking the lead on this and working with the broader ecosystem.

It also reflects very well, work that we've done and research that we've done. Recently, we talked to enterprises and SMEs all over the world, and it was clear, they are very excited about 5G, as Danny said; but it is more important to come together to build an ecosystem that delivers a solution that better fits their needs than any 5G technology as a standalone.

So, Danny, maybe I'll ask you another question in that context. We talked to many communications service providers, and they talk about, of course we've been always working with ecosystem, but now we need a different type of ecosystem. Ecosystem that is co-create solution. Can you share your thoughts on that and your experience?

Danny Kelly: Yeah. I think it's true. And I think, we probably would have said the same. We've always operated with an ecosystem. We have lots of products in the portfolio that we didn't build ourselves, that we've taken from third parties, whether they're large SMEs or multinationals, and we bring to market, as a wrapped proposition, or wrapped product. And I suppose that's the traditional telcoms approach.

But actually, in this new world, if you can imagine a Venn diagram, where we have 5G and IoT on one side, we have the edge computer on the other, and we overlay on top of that, the applications. Where these three meet, that is where the next wave of innovation will occur. When the application can take advantage of the network capability and the edge computer. Whether that's on the device or in the premises or in the cloud, at the edge of our network, it doesn't matter.

But what does that mean? It means that there's exponential growth now, in terms of the true innovation that we can deliver. So the way in which we partner with an ecosystem has to fundamentally change. We have to move at a different pace, and therefore it's not about productizing our onboarding, it's about selling with partners and co-creating. And that's a lovely concept that it's about co-creation. And our customers are very, very keen to understand, how can we co-create? Because what does that say to your customer? We're not going to serve you up a standard product that's off the shelf, that might solve some of your problem statement. It said, what's your specific problem statement? What's the opportunity that we can address? And let's bring together the partners who can co-create that. And of course, all of the technology now exists through 5G and edge computing, these applications, they'll enable those conversations to happen.

So it's a shift in the way in which the service providers have to operate. There is a shift in terms of the way in which we onboard or adopt. And it can't be the cumbersome privatization approach, it has to be a much more agile, feel fast, a co-creation, collaboration approach. And that's key.

No one provider has all of the answers. And I think that's the honest truth. And when we all face up to that, that we don't have the answer, it's a combination of partners who can bring true innovation. And that's the answer itself. So that co-creation piece is key.

Jeremy Cowan: As Michal says, this co-creation phase is such an exciting new development. But how can Vodafone help the small startup partners to not only thrive, but even survive in the early phases of development?

It's such a changed environment. I guess you're needing to take a slightly different role with some members of the partnership.

Danny Kelly: Absolutely. There's some very practical ways in which we can do it. Certainly, we can support them, and we do, in terms of helping small partners test their applications on the network, around the edge. So we've got edge innovation programs, where we can bring them in and let them understand what's the benefits that I can get from moving from a second to 10 milliseconds, in terms of latency? What does that mean by way of the offering that I can bring to market?

So, there's ways in which we can allow our network to be tested. And we're building those facilities across the UK. We've got one at our Newbury headquarters, where partners can come along and they can plug into the 5G network, they can plug into our edge compute capabilities and test their applications. That's quite practical.

More importantly actually, it's how do we take those out to market? So how can we support the ecosystem going to market? So we've got innovation labs, I've got one in Manchester, we're building one in rural Dorset, with the rural Dorset council. And these are popping up all over the country. How can this new technology be used to deliver those outcomes? And nobody has all of the outcomes yet, so it's great to be a part of these innovation accelerators, these innovation facilities.

So we can support small businesses through that, or SMEs in that journey. And then of course, is our brand part. So when we go to market, then Vodafone is saying, we know of three or four great solutions that do this. But for us, we've worked with this partner and it's a great solution.

And whether that's using mixed reality, or augmented reality for surgery, or it's using a IoT solution that can be plugged into the 5G network to do something in a smart city environment. So there's the part of the ecosystem and the part of the brand. So Vodafone can leverage it's brand, but also can support the technology adoption through those innovation facilities. And we have lots of those who have invested heavily in that.

Jeremy Cowan: As you've faced those opportunities and created new solutions, what are the challenges that you've faced in delivering not just 5G, but other applications, in meeting end user expectations? What challenges do you find?

Danny Kelly: I think it's an opportunity for us. It's a learning journey. So every partner is different, then it's about understanding the scale and breadth and depth of the support in the relationships you can build. Actually, the single biggest challenge is that the technology has probably arrived before the developers have the ability to build. So we're now at the stage where we've got, well what is edge compute capabilities at the edge of the network? Well, it's great. But actually, okay, but give me an example of an application [inaudible]. I can't do that. We've got great applications that we're bringing to market on that.

But as a consumer, we've all felt it. We've got a 5G phone and that's great. Okay, what can I do with my 5G phone? Well I can't watch Netflix any faster and I can't listen to Spotify any faster. So what does 5G do for me? Well, the word of 5G on your phone as a consumer, it will only evolve when effectively the developers begin to leverage those network assets. And the biggest challenge that we have, is attracting the developers now, to really take advantage of the network asset, build those applications, host them on the edge of the network, take advantage of the 5G speeds. And that is when we'll see true use cases really glow.

So the business market has started first. They are the early adopters. We're seeing lots of innovation in their space. Actually for the consumer market, it's much slower. So the use cases are less. So we're really keen to see more development from the developer community onto our network architecture, and our capabilities. And that's when we'll see this growth. It probably continues to be the one challenge, and by the way, simultaneously the biggest opportunity.

Jeremy Cowan: Have you ever experienced what I've seen occasionally in the industry, where the technology gets ahead of the business case? I mean, you get a great technology and you know that you can roll out something, but the business case is still yet to be proven.

Danny Kelly: Yeah. And actually, that is often the case. Proof of concepts, were a term that we used quite a bit in the past. So actually, let's trial proof of concepts and see if it works. I think within 5G, we've done a great job at doing proof of concepts now. To say, okay, let's go out and create industry first, build a proof of concept. Let's understand what is the dynamic and the dimensions of this look like, and partner with customers. And then let that fulfill, let that feed the business case.

So we're doing that in the reverse. Because typically, your business case, then your CapEx invest, then you build a product, and then we all hope it sells on the market. Actually with 5G and this ecosystem are partners. What we've been able to do is say, okay, we know we're going to make the network investment, so let's make that now. And then let's go into the market and co-create solutions. What does that tell us about a business case and be realistic about it? So we've turned it on its head, and we're finding that that is really useful, because like I said at the start, Jeremy, we're finding actually that the pockets of demand are very different. So any business case at the start, probably would have said, it's all an MNC, let's focus our efforts here. But actually what we're finding from this proof of concept approach to the business case, is that demand can be anywhere and it's very different. So we've reversed it and it's worked well for us in terms of understanding that.

Jeremy Cowan: Co-creating isn't just for partners, I guess, it's presumably also for technologies and in the innovations unit, I'm guessing that that must be a daily brief. How do 5G and IoT get to interconnect? And where do you see these requiring a different approach?

Danny Kelly: Jeremy, honestly it's fascinating when we have customer conversations around, we're super excited about 5G. What can 5G do for us? Let's have a conversation around 5G. And we want to have that conversation, because we're well equipped to. We've got lots of reference ability, especially Vodafone, globally was deployed lots of 5G solutions now. UK, we've been super successful in terms of creating lots of industry firsts, some world firsts in there as well, in the UK, which we're quite proud of. But actually, when we sit down with a customer and say, "We've got all of this that we can talk about 5G. Tell me your problem statement." And then they articulate quite clearly, a problem statement that's been a problem for quite some time. And you say, "Ah. Okay, I can start with IoT today." We don't need 5G. And actually I could have done that with maybe narrowband IoT or RFID.

So when we talk about things like digital campus or digital buildings, I want to connect all of my bit people, in places and things that I want to. And they describe a great use case for us that challenges us, actually it's in our core DNA today, and it's something that we can deliver without 5G. So we're not about reinventing the wheel. It's not about taking 5G and using it to sledgehammer to crack a nut. We use 5G in the right way, for the right solutions. Actually IoT is very complimentary conversation. And as a result internally within our business, what I say is that 5G is a great umbrella technology. And under the conversation of 5G, you end up having a conversation around connectivity or IoT, because more often than not, you can find a lot of the problem statements we can begin to fix with that alone.

Jeremy Cowan: It's fascinating to hear the way you're fixing with existing technologies that have been in your armory for years. So where are the challenges that you've come across lately, as you develop your solutions in IoT?

Danny Kelly: In IoT or 5G, it's a similar challenge, Jeremy, for us, in that when you create a great horizontal platform, which has the ability to deliver lots of vertical use cases into its different industries, it becomes a challenge for our salespeople even to understand. But what is the product that we want to take to market? They change their mentality in the way we talk to customers. Because before, we would have took a product to market, we would have talked to customers about a product, and the outcomes of that product, but now when I'm starting with a product, and we have to retrain our salespeople to think differently. Let's not think about a product, we've got an inherent capability, which is broadest at first, and we can create lots of different outcomes, which are effectively infinite almost when we put together 5G and IoT.

So, it's reversing the conversations and saying, let's start with the customer. Which always should have been the case, but now we're saying to the customer, "Please tell me about your problem statement within a particular industry vertical, and we will work backwards from that." Now, that's a mindset change. That's definitely something that we can do. And we see pockets of strength across that, but this is an industry-wide challenge. And the industry has to get to terms with the technology is now there, we need to begin to have a different conversation with our customers about the outcomes that we can deliver, Jeremy.

So the challenge is definitely an internal challenge to the telecoms industry, not a challenge of a tech comms industry. A tech comms where we'd understand, that's where we start, and we work our way back. Of course, you've got to have that inherent capability across the IoT, the MPN, the edge compute capability, and of core connectivity that wraps around that. Once you've got all of that, the possibilities are endless.

Of course, I'm not being complacent when I say that, because I bring it back to the one point I made at the start, the real secret is not in the network technology. It's vitally important. But the real secret is in those great applications that we can hang on that. Now we build some of those applications ourselves, but we have to partner in the ecosystem for a lot of those applications. And when we do that, and we do that right, and we do it well, we can deliver massive benefits to our customers, true innovation into the industry, and we can really take industry forward. It's the industry 4.0. We're leading that industry revolution, and it's happening today.

Jeremy Cowan: The name of this podcast, as you were aware, is the Accelerators Series. So I'm interested to know how important is speed in capturing this 5G and IoT opportunity.

Danny Kelly: I think speed is a relevant topic when we're talking about 5G. I think first mover advantage, and first to market, and all of these things is important, but actually, when we engage with customers, what we're finding actually on this journey is that customers are less interested in speed of deployment of solution, what they're wanting is tenure around their delivery and problem statement. They want you to hang in there with them. They understand, okay, if I make the investment, how else can I take our return investment around the MPN stack or the edge offering?

So it's about proximity to customer, proximity to problem statement, proximity to the customer's life and journey. We become true strategic partners in their business. So actually speed, yep, it's important that we get a network built quickly, but actually the reality is, that it's more important for us to hang in there, stay with the customer and understand what we can deliver by way of value. And actually, Jeremy, great story. We have seen that time and time again now in the UK, where we have delivered 5G solutions. We've delivered 5G, we've stayed within the account, we're understanding, okay what else can we layer on top that offers that return on investment? And what we're seeing actually is, customers have said, "This is great. What we now need is 5G here. We need a different solution here. Can we bring IoT into this?" We begin true co-creation with the customer.

So actually, speed is only measured as a measure of how quick we can deliver our point solution. For me, it's not that relevant when we're delivering true innovation, because it's about the journey with the customer.

Jeremy Cowan: You've kind of anticipated my next question. Because I wanted to understand if you could share a personal experience, where you managed to get the job done faster or better through innovation.

Danny Kelly: Well, possibly not faster, but certainly better. Because everything that was done so far, Jeremy, in the 5G space, has effectively been either a first use case of 5G or certainly an industry first of its kind. And whether that's in education, in healthcare, in transport logistics, we're really watching for the first time, true innovation. Significant scaled innovation in each of these industry verticals. And I'm very lucky Vodafone places me in a seat to get the front of that. So it's bleeding-edge technology. we're meeting with our customers and we're getting to talk about these opportunities to truly transform.

But actually, this is not about PowerPoint presentations and decks, we know this is about delivering transformation today. Together, we can make tomorrow happen, but we can make it happen today is the interesting piece.

Jeremy Cowan: Danny, it's been fascinating, and I think we've all learned a lot. If I was to ask you to pass on one lesson that you could share with your peers about how Vodafone has grown, and developed its customers' experience through innovation, what would it be?

Danny Kelly: It's the same simple message, Jeremy, that I give to my sales teams all the time, which is please do not talk about technology. And that's hard, because I'm a product evangelist effectively. Internally, in our business, I go in and I scream from the rafters, we've got the best of this and the best network and the best capability. And it's important they understand they have that, but actually it's also important that they do not now talk about the technology to our customers. They've got to focus on our customer's ICOMMS, and that's really interesting for our customers because it's about their business. So get engaged with your customers' business, talk about their outcomes and the customer, it should be agnostic to them, in terms of the ways in which we deliver that.

There's really lots of different ways we can deliver 5G. There's lots of different ways we can deliver an IoT solution. There's lots of different ways that edge compute can be facilitated. Actually, the customer, with the greatest respect, doesn't care. What they care about is actually, how can you deliver my outcome and what's my outcome going to deliver for me? And that's a better conversation. As an industry, we have to quickly move to that point. So I think, Vodafone's done a great job of that. I think all of our peers in the industry need to start to move the conversation to that direction. SMEs will benefit, the ecosystem will benefit, industry will benefit.

So that is definitely my one piece of advice. Don't talk about the technology. But it's a strange thing to say when you're the head of innovation for Vodafone, but it is the right thing to say.

Jeremy Cowan: It makes perfect sense. Danny, that was a tour de force. Thank you so much for sharing your insights and your experience. There is such a lot for our listeners here to take in. We're all going to go away and have a little bit of a think about that. And my thanks too, to Michal for anchoring the show. Michal, back to you.

Michal Harris: Thank you, Jeremy. And wow, thank you, Danny. That was really great.

Danny Kelly: Thanks very much folks. I've been really delighted to be a part of it. Thank you.

Michal Harris: Thank you again for taking the time to join us on Accelerators. Accelerators is a podcast by Beyond Now. Hosted by Jeremy Cowan, and joined by me, Michal Harris. We hope today's topic has inspired you to accelerate further, faster and beyond. Be sure to subscribe to this podcast on iTunes, Spotify, or Apple. This podcast is published biweekly and produced by Fox Agency.

Speaker 1: Accelerators from Beyond Now.