platform-driven to bring the level of customer focus and breadth of capabilities for partners to jointly co-create and co-innovate solutions that CSP will orchestrate. We see CSPs follow different telco-to-techco paths. Some start with connectivity in pathway 1 and incrementally step out from their core. Others set themselves up as “IT factories” building any number of platforms and solutions. Another model is to focus on two to three  industry verticals. Some CSPs see themselves as a venture fund acquiring software, while others create a ‘Division X’ to define new ways of working with partners and customers—a winning strategy may be a combination. What is clear, though, is that all models will require CSPs to move to selling online like the hyperscalers, moving from projects to selling sophisticated digital products. These will be discoverable, consumable, and configurable online with assisted sales journeys and ruthlessly automation of every step from shopping cart to ecosystem orchestration and monetization.

B2B customers are tech-savvy digital natives that not only want solutions to solve business problems, but also want strong guarantees of the successful business outcomes that a solution will deliver. It’s less “trust me” and more “prove it to me.” Through multi-sided or platform business models, hyperscalers have been successful in the B2B space. For CSPs to make a successful transition to techco, the next step will involve their willingness to adapt and mirror the success of the hyperscalers, selling and globalizing by building an operating model which enables rapid scaling of their own and partner solutions.

Restructuring as a platform-based organization

There are several broad themes that encompass the journey CSPs are on as they rebuild around platforms to become techcos, emulating the success of the hyperscalers. The first is the move to embracing platform-based “sell with and sell through” multi-sided business models. Traditional linear CSP business models centralize power and decision-making; it’s a push sale mechanic whereby the organization sells standard products to the customer using commission sales and paid marketing or wholesale.

Platform-based business models are very different. From a business perspective, a platform has a multi-sided business model able to generate powerful network effects (think Amazon “fly-wheel”). This is where volume generates economies of scale and an expanding partner ecosystem delivers more choices for customers, attracting more customers into an online community and driving further volume and scale gains. As the hyperscalers have found, these models significantly reduce the cost of selling, creating huge value economics.

Multi-sided business models are also great for digital solutions—a sweet spot for B2B as discovered by the hyperscalers and digital startups. Digital services always start with a customer problem and work back from there. For that solution to offer a holistic view, or be ‘perfect’, it will require a much broader set of capabilities than any CSP can muster. Invariably this means co-creating solutions with specialist ecosystem technology partners. Not only does this shared specialism build knowledge of new markets and geographies for the techco but it is also more profitable to co-create than to sell another company’s products.

How does techco change the role of the CSP?

There are four roles within a platform-based business model: a platform-owner (who orchestrates the value needed to perfectly solve the customer problem), who brings together producers (partners-owning capabilities), providers (partners owning customer relationships), and customers themselves. The role played by each actor may be one or many and will change from solution to solution. So, a platform owner may be a producer and a provider; or purely orchestrating the ecosystem to perfectly solve the customer problem. Overlaying the marketplace with this model is really about selling highly repeatable solutions online. This requires self-service, building volume,