Back in the late 1970s, communications provider MCI was on the verge of bankruptcy when suddenly it received a visit from Lady Luck. First, MCI won the right to provide long-distance services in opposition to AT&T and the Federal Communications Commission. In March 1980, MCI then became the first company to compete with AT&T in the residential long-distance market. By 1981, MCI had pulled a complete turnaround. Rather than teetering on the financial precipice, MCI sales approach $1 billion.
The MCI story has many components, but the company's early success went beyond litigation, legislation, and timing. Early on, MCI built a number of flexible internal systems for order entry, sales, and customer billing. As a result of these systems, the company was able to craft loads of specific marketing programs for different types of customers. Alternatively, AT&T was hamstrung by monolithic inflexible internal systems that took months to customize for each program. MCI knew it didn't have the network or resources to outdo AT&T, so it excelled in an area where it could build an advantage--customer-focused IT.
Fast-forward to today and the lessons learned in the MCI example are still applicable. Lots of services vendors understand this, but I'm impressed with the way Symantec is actually executing here. Symantec is not a new comer to software as a service (SaaS), cloud-based services, or whatever the term du jour it is that we analysts use for managed services. Symantec acquired Riptech in 2002 and has been a leader in managed security services since. This experience was crucial for Symantec as it learned how to provide integrated services management capabilities to large and discerning customers.
Symantec is in the process of extending its footprint with its Symantec Protection Network, a portfolio of services for services and storage. All new and future services are built on top of an extended integrated services platform, providing customers with a single management console for ordering, billing, monitoring, and reporting on all Symantec services. Developing this infrastructure probably delayed the introduction of individual services, but when it's completed, Symantec will have the flexibility to add services, create bundles, customize offerings, and integrate third-party services to capitalize on dynamic market opportunities. At the beginning of this month,, a leading provider of secure messaging services. Today, MessageLabs stands alone, but as Symantec integrates the MessageLabs services into its customer-centric business platform, it will be able to offer attractive new services bundles to a base of 19,000 customers at the click of a mouse. Talk about reducing your cost of sales!
To telecom veterans, discussions around billing and operational support systems are an old story dating back to the 1970s and MCI. Unfortunately, with all the tech industry ga-ga over SaaS and cloud-based services, many would-be service providers are bound to rush willy-nilly into services without the proper back-office foundation. Over the long-term, this strategy will always result in failure.
It's nice to see that some companies like Symantec have learned valuable lessons from the past.