Simple Solutions to Complex Problems
6 April 2006 Berndt Baumgartl
New Siemens Communications Inc CEO Berndt Baumgartl is excited at his company's simple yet powerful proposition: bringing together all its expertise to provide enterprises, private individuals and network operators with solutions that bring simplicity and efficiency to communications infrastructure. Jim Banks reports.
With a new CEO in place, a new structure and innovative solutions on the market, Siemens Communications Inc (the North American section of Siemens Communications) has its sights firmly set on retaining its leading position in both new and established communications markets.
Siemens Communications Inc combines wireless, wire-line and enterprise infrastructure and services, devices and Internet Protocol (IP) convergence solutions within its portfolio.
Globally, Siemens Communications currently serves the largest installed base of wireless and wire-line carrier and enterprise customers in the world. Recently, it named former COO Berndt Baumgartl as its new president and CEO to carry forward the firm's vision of an integrated communications landscape for public and corporate users.
With his long history within the company, (he joined its defence electronics group in 1986 and then progressed through its mobile networks business) Baumgartl has extensive experience in the telecommunications sector. Having previously led the firm's wireless infrastructure, mobile phone and wireless modules business in North America, he takes over the role of CEO at an exciting time for Siemens Communications Inc, as the company looks to leverage its expertise in voice and data networks with the Siemens Group's wider presence in numerous industry verticals, to deliver a comprehensive, integrated communications solution that brings simplicity to a complex market.
A CRAZY WORLD
'The industry is always changing. I came to this industry in 1993 and I have seen many evolutions, some radical, some less so,' says Baumgartl. 'Each day is different, and each day new players enter the telecommunications market. We now serve ASPs, ISPs and cable operators as well as traditional telecom companies. It is a very open, slightly crazy world, but our goal is to position ourselves in global growth markets so that we can target innovative areas.' To this end, Siemens Communications operates eight research and development centres in the US.
As well as leveraging its mature solutions to provide comprehensive functionality for its customers, Siemens Communications is also developing new technologies and innovative solutions, with a view to making appropriate acquisitions to extend its portfolio. 'To be an innovator, we need to harvest from mature markets to fund the growth markets in which we want to establish a leading position,' he adds.
Globally last year, Siemens Communications contributed some €13bn to the Siemens Group's total turnover of €75bn. 'The US is the largest communications market in the world, so we get the scale and the opportunities to develop solutions for a key market,' notes Baumgartl. 'This is crucial for the global communications business. It is a large market, but also one of the most innovative, where there are many early adapters.'
One example of an early adapter in the US paving the way for broader rollout of a communications solution is CableVision, which operates a cable television network serving three million customers in the New York metropolitan area. It recently implemented a Voice-over-IP (VoIP) service, which has amassed over 500,000 subscribers. This solution has now spilled over into other markets like Canada, Belgium and Sweden.
'As you can see,' notes Baumgartl, 'the US is important to the global roadmap. Siemens Communications Inc. has integrated fixed and mobile networks into one single division. We have put our wire-line, wireless and enterprise networks and solutions together to offer a unified communications concept, called LifeWorks.'
TARGETING KEY TECHNOLOGIES
Siemens Communications is focusing on a wide variety of established and emerging technologies. In addition to VoIP, other technologies are coming to the fore, most notably wireless broadband access solutions such as WiFi and 'worldwide interoperability for microwave access', known as WiMAX. WiFi, or Wireless Local Area Networks (WLANs) are becoming more common outside the workplace, with hotspots allowing users to connect to the Internet while in public places. Siemens is keeping a close eye on WiMAX, a standards-based wireless technology, which offers higher data rates than WiFi and can be used as a wireless Metropolitan Area Network (MAN) technology that can connect WiFi hotspots.
The firm is also focused on a growing array of solutions for enterprises, including security, real-time IP telephony systems that control features, access, configuration and call processing functions, and professional, lifecycle and managed services.
Siemens is developing and deploying next-generation networking solutions, starting with such promising technologies as Broadband Passive Optical Network (BPON) products in the access area, Dense Wavelength Division Multiplexing (DWDM) in the transport area, and Next Generation Exchange (NGE) offerings, designed for service providers who want to deliver unified data, video and VoIP services without costly infrastructure changes to legacy network environments.
Siemens Communications serves the largest installed base of wireless and wire-line carrier and enterprise customers in the world that are growing obsolete. Furthermore, Siemens is working with Internet Protocol Television (IPTV) technology as part of its home entertainment portfolio.
LIFE AFTER LIFEWORKS
By integrating home, business and carrier networks, be they wired or wireless, LifeWorks aims to drive revenue for carriers and boost productivity for enterprises. Research conducted by Siemens among knowledge workers shows that they are often required to leave messages through many channels when trying to speak to important contacts, which is both time-consuming and frustrating if they need an immediate response.
'Recently, we have seen significant development in communications technology,' says Baumgartl, 'including improvements in mobile technology, wireless broadband data networks and VoIP, but we have also seen a dilemma. These technologies have been in different silos. People use their cellphone on the move, wire line at home and private networks in the workplace. They are all isolated services.'
'Through LifeWorks, we want to offer access to all these services, independent of the device or the network. Our solution brings all of these networks together. It offers easy access to people, seamless connectivity and is more personal. It forces us away from selling boxes to selling solutions.'
'For calls coming into a call-centre, around 40% will require an expert. Using OpenScape™, you can see which experts are online and connect the call quickly. This is important for different vertical applications, such as the insurance industry or healthcare, where calls often go beyond the capacity of the call-centre.' OpenScape is a worker communication and collaboration portal that lets workers see who is available and on which tool or device, including instant messaging, email and phone as well as filtering out unwanted communications via permission-based options.
Leveraging fixed and mobile networks within an enterprise also allows a firm far greater flexibility in its communications and facilitates the development of tailor-made solutions.
However, Baumgartl is aware of the shift in mindset that is required among enterprise customers for solutions such as LifeWorks to gain significant traction.
MAKING THE MENTAL SHIFT
The success of integrated solutions such as LifeWorks will depend very much on enterprise customers accepting an open communications architecture. Part of Baumgartl's vision, therefore, is for Siemens Communications Inc. to lead existing and potential customers through the different stages of implementation towards a plug-and-play environment, where new services and multi-vendor solutions can be easily integrated. An open communications architecture enables an enterprise to use best-of-breed applications and devices, or leverage existing communications infrastructure to deliver cost savings and efficiency, as well as drive revenue through new services.
'Enterprise communications are now seeing the convergence of voice and data, a process that is handled by the IT function within a firm,' says Baumgartl. 'Communications are based on a software-IT services model and deployed in the corporate data centre or hosted by a managed services provider, versus a site-based approach with a system for every location. This creates lower total cost of ownership. There needs to be a mindshift in the IT department and with the CEO to understand the new communications technologies and add voice to the IT network. It is not just an issue for CIOs. Everyone needs to re-evaluate how they think about communications.'
To help senior executives make this mental shift, Siemens knows it has to ease the burden of implementing a new solution, as the prospect of wholesale change to the communications architecture may cause inertia, in the face of anticipated cost and disruption.
'Integrating OpenScape and collaborative systems helps enterprises to increase productivity, accelerate their decision-making processes and improve customer satisfaction,' says Baumgartl. 'They can integrate our solution with their existing communications technology or they can install new equipment as they extend to new sites, so there is no need to rip out and replace their existing investments.'
Furthermore, Baumgartl believes that there is much to be gained from leveraging the presence of Siemens AG in many different industry sectors, including finance, healthcare, building technologies, automation, power generation, transportation and automotive, to develop communications solutions appropriate to the needs of specific vertical markets.
In many sectors, it already has an in-depth understanding of what its customers need.
'We have set clear goals, and we are targeting double-digit growth in the US for the coming year. We also want to establish a leading position in key growth markets,' he says. 'We will get there through excellent execution, which is achieved by four key elements – performance and portfolio, operational excellence, high quality people and corporate responsibility – a programme that exists throughout Siemens, Siemens is well placed in what is a highly competitive marketplace, with its eye on emerging technologies and its established presence in mature markets.