Hyperscalers and micro-scalers: how BT is reinventing partnerships large and small
Telecommunication leader BT’s partners include Alphabet, Amazon and Microsoft plus smaller companies and start-ups working in areas such as drone technology and the health sector. Here BDO partner Jonathan Rowan discusses BT’s partnership strategy with Meg Blight, Start-up Partnerships Director, and Stephen Hall, Director of Strategic Partnerships.
What’s the value of BT’s approach to partnerships, and why are they superior, or complementary, to either build or buy?
They’re complementary. It’s not cut and dry though, there are many shades of grey. For example, partnering to licence a specific IP which we can then repackage, build on top of and take to market is build, buy AND partner. Some of the most interesting deals are in the subtleties. Our approach is to play to the strengths of both BT and the partner. We're looking to take better products to market and get the best deal for customers.
Increasingly, much of the opportunity is global but it also requires local variation.
That’s one of BT’s strengths. Across all our geographies, we’re deeply connected to our millions of customers. The value to partners, big and small, is that we work in a way that's beneficial to all. There’s an amazing constellation of innovations out there. Take AI [artificial intelligence] solutions such as computer vision, for example. Often the most innovative solutions solve a very specialist problem that is vital to a subset of our customers but not relevant to others. That might have a big global market but is a relatively niche opportunity when considered across our total customer base. It might not make sense for us to build it ourselves when there’s a global innovator we can partner with and scale their solution with our global go to market reach.
We can’t do it all ourselves. We’ve got to bring the best partners into the BT ecosystem to develop and test out new propositions and bring new opportunities. One of the elements of our Digital strategy is great partnerships. Talking to businesses gives us a spectrum to cover a whole range of possible futures.
Describe your Hyperscaler relationships, how they’re set up and your goals.
We look at how we use technology from partners such as Amazon, Google and Microsoft and how it can make us more efficient and productive. Google is a strategic partner, thanks to a recent Google Cloud Platform [GCP] deal. With Amazon, it's moving our IT workloads to the AWS [Amazon Web Services] public cloud. Then with Amazon, Google, Microsoft and Apple, it’s us buying from and selling to, whether it's our connectivity, voice services or other solutions.
Then we’re exploring possibilities to extend our partnership into new previously untapped areas, utilising the partners’ cloud technologies and BT’s infrastructure.
Have these relationships been a long time in development?
The BT, Google and EE relationship goes back many years in the consumer space but they're also trading partners because we would resell the mobile and Android devices. We started working with GCP three years ago. With AWS, we produce Amazon Prime sports; we started working with Amazon Web Services on public cloud 2018, and a recently announced five-year update on that deal which is enabling us to accelerate the modernisation of our application estate
Last July, we announced the Microsoft strategic partnership, which is a multi-year commitment.
I appreciate that BT is a lot more than just an incubator, but could you describe your approach with start-ups and explain what differentiates your approach from others?
The first thing I do is start with a brief from my internal stakeholders and end customers. We start with big problems or opportunities we can solve (with start-ups). This might be something for our own use; something we might be building for our customers that could be accelerated; or an area where we are looking for partner products to take to market. Either way, it’s centred in a real need.
That's different from a lot of other programmes that may start with a broad brief to find what is cool without line of sight to customer demand.
Time is vital for startups and they can potentially waste a lot of it on dead-end conversations with corporates who haven’t already done the work that we start our process with. Of course, we still do some horizon scanning but generally my team works on things that are already a strategic priority.
Using this process, we can be faster and more targeted. We might find 100 companies that fit the brief, and then we can whittle it down to find the best fit. It's not just about what we need at BT, EE, Plusnet or even Openreach, it's also about what the startup needs. The partnership needs to have synergy in terms of missions and ways we can help each other. Once we think there’s something there, which we try to do very quickly, we arrange a pitch day between the startup and relevant BT decision makers. Our goal is to leave with a fast no or yes.
If it’s a yes that’s when the real work starts to build the partnership. It's very much a relationship. That's why we talk about amplifying startups. It’s not one size fits all. This is about finding the right partners and our process and approach puts that at the very heart of it, so it’s a better experience for the startup and us.
Are you able to put any numbers on this for us?
The current team got going last summer and we’ve signed six deals since then. Four of those are reseller partnerships that may grow into other things in the health area, one was an asset acquisition and one was a bigger sweat equity investment with a start-up called Distributed.
We have many more companies coming down the line. In the next year, I’d expect us to do far more. However, for a project we might start with a list of 100 companies but only do one deal. In terms of the engagement reach, the number of events and conferences we attend or host, it's a wide funnel. This isn't scattergun though. We have strong relationship with all the companies we invest and partner with.
It’s quality over quantity.