Tuesday, November 19, 2013

BayRICS, Motorola and Firstnet - the deal isn't quite dead yet but it should be!

Why would BayRICS fail out of the gate? It all comes down to understanding that an OEM is in the business of selling equipment, and that is where their allegiance will be when times get tough...as is always the case. The fact of the matter is you can't mix oil and water....you can make it look as though they are mixed, but, in the end it will always go back to its original form.

I am referring to a recent article Urgent communications entitled, "BayRICS, Motorola Solutions fail to reach deal with FirstNet". To summarize, when you have an OEM as your main partner, and you focus on the technicality of that OEMs solution for deployment, i.e. "push-to-talk", plus the contractual obligations of that OEM living up to the full life-cycle of the project, you will ultimately have issues. Why? Because the OEM runs on a different business model. The OEM is not a long term managed service contractor, nor a good private equity player....they sell equipment, thus the acronym OEM (Original Equipment Manufacturer). It's hard enough to convince your shareholders about your business execution on the products produced, let alone trying to convince them that you should be an operator as well. The only way BayRICS will be successful in the long-run, is by partnering with someone who doesn't sell a product (box or piece of equipment). You need a partner who will have the same aspirations of designing, deploying and maintaining that solution as you do. In short, you need create your own company that is driven towards servicing its broadband users. The OEM would love to eat its cake too, but in reality all it does is create indigestion. I know this sounds very similar to a carrier, but a carrier is purely focused on selling subscriber based services for a profit, and just like the OEM that is where their allegiance will lie as well. As I stated, they too have investors to please, and those investors are expecting payback on a business model that was sold to them, most likely that business model did not say anything about shrinking their existing ROI.

You can't call the OEM greedy, they are doing what they've always done....sell equipment and make money. What you can say though, is that your management team, who is creating your solution with the OEM, either, may not have your best interest at heart, or, they are demonstrating signs of incompetence. You can keep the focus on the belief that an OEM is your best solution, but, you have to remember, when the house of cards starts to fall...you are the ones that need to take responsibility for your own failings. As we all know though, by the time such a solution starts to show any signs of default, those responsible for getting it off the ground, and approved, will most likely be long gone. Hire a consultant who is entrepreneurial and wants to create a new broadband company, not someone that just wants to do what's best for himself based on a monetary relationship with an equipment provider.

San Francisco, and LA, both have plenty of potential users, it's hard to understand why they don't take advantage of that. For a telecom guy with 25 years, it's plain as day to me on what needs to happen, but, as I stated in the past, you can lead a horse to water, but you can't make him drink.

Just some guy and a blog....

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