Telecom Italia Comes Out with Total ICT Packages for SMEs to Challenge Alternative Operators

| Apr 23, 2009 | Business Telecom Services - Europe | Competitive Intelligence Report

| Analyst: Joel Stradling

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: High

Event Summary

April 21, 2009 -- Telecom Italia announces ‘Impresa Semplice’ targeting Italian SMEs. Customized and modular offerings can include multiple ICT elements, from Internet access, mobility, voice /data, messaging and collaboration, LAN and workstation services, security, and business applications. The carrier is delivering Software as a Service (SaaS) leveraging its data centres to remotely host applications and assisting customers with on-demand fixed monthly spend.

Analytical Summary

• Current Perspective: Positive on Telecom Italia’s Impresa Semplice initiative, because the portfolio takes advantage of the carrier’s existing network assets, including data centre facilities, to introduce a modern and compelling concept to SME prospects. The fact that the customized and modular off-the-shelf blocks of products leverage Telecom Italia’s capabilities in broadband access, fixed-line voice and data networking, business mobility, IT expertise, hosting facilities, and purchasing power for LAN and PC equipment, makes the overall Impresa Semplice offering difficult to match by competitors.

• Vendor Importance: Moderate to Telecom Italia, because the carrier needs to respond to aggressive activity by Italian alternative providers to protect its market share. The SME market is diverse and difficult to address, and therefore Telecom Italia needed to come up with a flexible and modular offering that covers several bases and leverages Group synergies in order to gain differentiation.

• Market Impact: High on the Italian SME market, because Telecom Italia is the largest player in terms of infrastructure assets, market share, and operations. The challenge facing competitors is not due to single elements of Impresa Semplice taken individually because these can be replicated by rivals, but rather being able to respond to the entire strategy of combining IT with fixed/mobile telephony and applications, broadband assets, and SaaS running out of an extensive data centre footprint.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommeneded Vendor Actions

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Recommended Competitor Actions

• FASTWEB should be aggressive in matching Impresa Semplice on every point by presenting its mature corporate portfolio and FMC capabilities in partnership with 3 Italy. The company should have a roadmap in place for offering SaaS to SME customers, and can consider negotiations with Microsoft to deliver MS Office services fully hosted off the customer premise and available for a fixed monthly spend per-user, as Orange Business Services has done locally in France.

• COLT and BT Italy can focus on the higher end of the SME segment, and in particular seek out prospects within this segment that might demand cross-border, pan-European and indeed international services. These competitors can present compelling business cases to such specific prospects due to proven experience in managed IP solutions including all the bells and whistles, such as hosting, IP VPN, security and so on, backed by far more comprehensive support country-by-country in Europe compared with the Italian incumbent operator.

• Tiscali and Wind need to expand their service portfolios beyond basic Internet access and VoIP, and mobility in the case of Wind, to cover more areas of the ICT needs of SME prospects. The companies can meanwhile tell customers that a multi-vendor approach might be more desirable than placing all the eggs in one basket with Telecom Italia.

Recommended End User / Customer Actions

• Italian SME customers should certainly explore all the elements in Telecom Italia’s new SME proposal Impresa Semplice, because the carrier has come up with a well thought out range to meet typical SME needs, such as manageable spend and outsourcing IT functions on-demand to a third party. Furthermore the carrier is one of the only players, perhaps with the exception of FASTWEB, to offer so many fixed/wireless communications, IT and data network pillars under one roof.

• Several other vendor proposals should be considered by Italian SMEs, including for example offers made available by Wind, Tiscali, BT, COLT and FASTWEB, because more attractive offers are possible in terms of price and performance on certain product combinations. Moreover such alternative operators might be able to provide a more flexible ear to the needs of individual prospects and adapt solution designs and pricing accordingly.

• SaaS and virtualization of hardware and software resources clearly hold attractive options for SME customers for lower investment risks, meeting legal obligations, and lower pressure for internal systems administration. Therefore customers should question existing vendors on the available options, and contact Telecom Italia to see what benefits can be directly gained by taking the carrier’s new on-demand and flat-rate SaaS proposals.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommeneded Vendor Actions

| Client access - Full report in Business Telecom Services - Europe | More information

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