TechCo DNA and approach
I want to further augment what Linda wrote in her article and why we in Rakuten Symphony are doing what we are doing.
Thank you Linda Hardesty for your patience in waiting for the necessary interviews. Sometimes getting internal people to speak about what we are doing is hard, their preference to prioritize customers is really irritating to us marketeers...
Rakuten is a techco doing telco rather than a telco doing techco, which is why it is interesting. It takes a different approach and we in the telecom industry should learn from their approach as an example. This is the purpose of this newsletter.
First we speak to Linda's article then we speak to a session from 2022 where we spoke to what it meant to be an techco. We have been speaking about the changed mindset for some time.
Rakuten Symphony doesn't care about a 5G ‘killer app’
Do we speak about a Wi-Fi killer app? A bluetooth killer app? An ethernet killer app? Why would we speak about a 5G killer app; the brutal truth is that 5G is "yet another network", that is more advanced than 4G, and excels at outdoor mobility. It is most suited to provide wide area coverage with high population densities, to maximize the economic return from the large expense involved in planning, building and deploying.
But it is only "another network", it is not the answer that solves all answers. We do not live in that world, we live in a world of many technologies that all contribute to a final experience in their own way. The only time there will be ubiquitous coverage is with a dedicated private 5G deployment, in this situation the advanced features can become a valuable resource.
Rakuten Symphony is looking at future trends and serving enterprise demand
Rakuten is not looking for reasons to use technology. The cheapest API ever used is the one that is not called, not needed. What is more interesting is to discover unmet market trends and customer needs. This leads to the potential for new solutions and new revenue.
For example Rakuten Neo focuses on the aging population currently appearing in many societies, both from an available workforce and a personal safety at home perspective.
“By 2025, the founders of 1.3 million currently profitable businesses in Japan will reach the age of 70 without any successors. These businesses may be forced to close. Technologies to automate and reduce the need for manpower will trend in Japan,” Son said.
The unmanned space automation and monitoring solutions allow fewer people to manage larger numbers of disparate spaces. A previous post of mine focused on the potential of computer vision and Rakuten Neo uses cameras to detect any violence in the workplace, unwarranted access, "tailgating" and others. If self-implementing or sourcing from others, knowing the complexity of implementation allows for intelligent negotiation rather than smoke and mirrors pricing.
We always ask - can the network add value?
We are continuously looking for opportunities for the network to add more value via APIs and we believe by using this approach we have a larger chance of finding true value in all segments we have businesses in.
For example
When you know the business it is easier to discover true value and test cost of implementation versus value generated.
“Now is the perfect time for telecom to start building more than connectivity solutions.”
If no network APIs are needed this does not stop us from doing the business, it is irrelevant!
If the business makes sense we do the business. It is not our job to justify the use of the network as a gating function on what makes a good business or not - what a bizarre thought!
How a techco thinks!
A techco thinks completely differently from a traditional telco. A techco asks what customers need and what businesses they can discover, enable and grow. It starts with the customer and uses the most appropriate technology to deliver on that need and opportunity. Telecom starts with the technology and looks for a use...
The mindset of a techco explained
All the way back on Sunday May 15 2022 at the Intel Network Builders event I presented the unique approach of Rakuten doing telecom. Courtesy of 英特尔 you can watch the recording here:
For those who prefer reading I have paraphrased the transcript below...
Paraphrased Transcript
I work for Rakuten, a company with over 70 online businesses. For those unfamiliar, Rakuten is essentially the Amazon of Japan. Rakuten is the first company I've worked with that moves faster than the PowerPoint decks we create.
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In 2018, Rakuten announced plans to build a fully cloud-native, virtualized, software-defined network. There was significant skepticism at the time. Interestingly, in 2018, our industry was discussing remote surgery, which seemed acceptable.
We talked about massive opportunities for transforming manufacturing, automotive, financial, and healthcare sectors, yet we were skeptical about our ability to transform our own industry.
This calls for some introspection.
Rakuten's biggest threat to success isn't competition; it's a lack of courage in the industry to change.
Four years later, we've achieved 97% coverage of the Japanese population with a completely virtualized, end-to-end, software-defined network. Importantly, 94% of our data traffic is on-network, a key metric for us as it reduces costs paid to roaming partners.
Some key statistics: We have over 50,000 macro cells and over 270,000 active cell sectors in this network. Remarkably, only 250 people operate this entire network - a metric comparable to hyperscalers. Management believes we perform best under constraint, so there's currently a hiring freeze. As we expand our base stations, capacity, and services, we can't exceed 250 people. Clearly, we run our network not through manpower, but through software and automation, minimizing human intervention.
This four-year journey has been incredibly challenging, but never impossible. We weren't doing anything that hadn't been done before by someone else.
This is just the foundation of our industry's health and fitness.
The broader business impact has been significant.
Within our ecosystem, Rakuten Mobile customers
At the core of our ecosystem is customer experience, management, and loyalty, facilitated by our points and rewards programs. Unlike most telecom loyalty plans, we're redefining what it means to be a telecom customer.
Hands up here, who is a member of a loyalty program for an airline? Keep your hands up if that changes your behavior. Okay, hands down.
Hands up. Who's a member of a hotel loyalty program? Keep your hands up if that changes your behavior. Cliff at the Marriot every time, if any other Nokia people in the room is not getting the cheapest room, he's going to the Marriott. Sorry about that.
Hands up. Who's a member of a telecom loyalty plan? Does it change your behavior? Put your hands up a little bit higher just so that we can see that someone actually put their hands up. In Rakuten Mobile, we are redefining what it means to be a customer of telecom.
It requires you to be able to react to the customer's needs, which requires you to have a modern infrastructure that's programmable and automated, but that's not the end result. The goal of this industry is not open ram Open RAN is an enabler that allows us to get results through a goal of the industry, which is to participate in a digital ecosystem and add value. That is the opportunity.
Our approach involves digitalizing the entire operational process of telecom. Everything above our software platform is an application that addresses a specific telecom operation task: planning, building, and operating the network, as well as managing the digital customer experience.
We run this network with those 250 people primarily through chat groups. During a recent earthquake in Japan, our system automatically detected the event via a government tweet, triggering a ticket that alerted all support groups to assess potential outages.
Our primary indicator of problems is customer satisfaction, which is particularly crucial given Japanese customers' high expectations for quality.
Underneath our operational layer, we have the network functions - the Open RAN software. When we bring a base station online, it's a zero-touch provisioning process. Initially, we couldn't even automatically allocate IPs or name nodes.
In a cloud-native world, these processes must be automatic. You need a dynamic inventory to manage both digital and physical assets.
Regarding cloud infrastructure, we've found that both public and private clouds have their place. While most applications can run on any cloud, edge computing for radio loads required three years of hardening, including real-time kernel modifications.
In our customer engagements, we always have three conversations:
Success in transformation requires addressing all three aspects.
We're proud of our innovations, such as our DU appliance with no active cooling, developed in collaboration with Intel. We've also worked with Juniper to virtualize the edge router. Interestingly, some of our most engaging discussions now revolve around offering these solutions as a service, with continuous lifecycle management over extended periods.
Looking ahead, we're not satisfied with the current speed of introducing and upgrading software components in our network. While we've shifted our operational focus from hardware to software, the industry standard of 9-12 months for software deployment is unacceptable. We're actively working to implement a marketplace or app store concept to streamline this process, aiming to reduce deployment times to weeks or even days.
Our goal is to accelerate iteration speeds dramatically because in our industry.
Time truly is money!