Leveraging ICT for a Better Future

After years of R&D, ZTE’s technological capabilities are no longer limited to serving telecom operators. Cloud computing and green technology solutions have opened the door to new business opportunities and have given ZTE a chance to differentiate itself from traditional telecom vendors. To gain a deeper understanding of how these trends may affect ZTE, reporter John Sunde interviewed Brian Cotton, vice president of information and communication technologies at Frost & Sullivan.

JS: Please tell us a little bit about your background and areas of expertise.

BC: Recently, I’ve been focused on pushing ICT into vertical industries and have been really centering on cities―smart cities and everything that goes on around them, from transportation to energy and economic pillars. All of this relates back to what I was doing earlier with green technology and before that with collaboration. It’s kind of been a progression, but it all fits together around ICT.

JS: How can ZTE use its ICT capabilities to create more value?

BC: The place for ICT these days is solving big problems; it’s not just about helping telcos generate better average revenue per user. ZTE can start looking at big industries such as electricity, oil, transportation, and government and start solving some of the big problems.

Take the oil industry for example. We’ve got alternative sources of energy, but fossil fuels are still going to be around for a long time. The demand for oil is still strong, and the ability to extract it is crucial because all the easy oil is gone. It’s harder to get, and it’s getting more expensive and more dangerous to extract. For oil companies to continue providing energy to a hungry world, they’ve got to get better. Technology can help them in areas such as asset management or using a cloud to coordinate their globally far-flung operations. 

That’s just oil. Government is another huge opportunity, particularly in cities. More of us are living in cities than in the countryside, and in densely populated places such as Hong Kong or Shenzhen, there are a lot of things going on―social services, public safety, education, health ―and a lot of these things converge. ZTE, as a technology vendor and developer, has a good opportunity to get away from telcos and really get in where the problems are.

JS: In our industry, there are a lot of barriers to working with governments because of security concerns. How can we overcome those barriers?

BC: It’s the elephant in the room that nobody has talked about until recently, but it can be managed.

In the United States, I hear a lot about the idea that Chinese gear in networks opens the door for economic espionage, but I don’t think the same is said about Cisco routers in China. A lot of the problem is politics being entangled with the economic and commercial arenas. 

In the short term, I think partnerships with some strong (maybe U.S.-based) companies can help ZTE get over that hurdle. It could be a real win-win situation because China is still a difficult market to crack for companies such as Microsoft and IBM. If ZTE finds the right partner, it could work.

JS: When we look at creating smarter cities, which technologies are the most promising?

BC: There are certainly many technologies being developed, but cloud technology is a good place to focus right now. Part of the problem with technology is that cycles are so fast, and by the time you’ve fully realized the potential of a technology, it has often been bypassed by something new. It’s the hype cycle.

The cloud, I think, is something that should be given a lot of time to develop. It can be really useful for allowing shared services and greater collaboration. Cloud computing is also very good at leveraging economics. On a shared services platform, you can tap into different budgets, and if something demands more resources, those resources can be dynamically shifted around.

We can also look at where the border of a city stops. It doesn’t stop where its jurisdiction is. A city pulls in the suburbs, and things like public transportation and safety transcend those borders. A shared service or collaborative platform helps serve the real population that goes beyond the city limits. I would say stop for a minute and just focus on the cloud.

JS: How can we turn cloud computing solutions into a more profitable business?

BC: That’s the key question. How do you keep adding value to something you tend to build once? Do you manage the cloud? There’s incremental revenue there. Do you upgrade the infrastructure supporting the cloud? There’s incremental revenue there too.

Designing clouds for specific purposes has potential. For example, a healthcare cloud has some specific things that are different than a banking or government cloud. Designing specific solutions can add value. 

I know ZTE has been one of the first companies to successfully implement healthcare cloud technology. For ZTE to be successful, it should go after some other specialized applications. If you can do that in China, you can say, “Look, we did it here, now give us a chance to do it over here.” Then that’s your global business; that’s your success. 

JS: Where do you see ZTE going in the future?

BC: If we look at the world that ZTE plays in with the vendors like Alcatel Lucent, Siemens, Ericsson, and Cisco, we can see that many of the traditional companies seem to be having problems. They focused on certain markets―generally developed ones―and they’ve fallen on hard times. The momentum seems to be behind Chinese companies at the moment.

Of course, telecommunications is an extremely regulated industry. In the near term, there could be great potential in industries that are less regulated. I would say, don’t be so quick to shift all your focus away from developing markets, because there’s a lot of money there right now. ZTE’s success in Asia is going to play really well in the next big frontier, which is Africa.

There’s been talk about what the next global trend will be, and it is making Africa light. If you look at a satellite picture of Earth at night, you see that all the developed markets are illuminated. If you look at Africa, there are some spots in South Africa and Egypt and a couple of other places, but everywhere else is dark. The next big thing is modernizing Africa, and that’s going to need infrastructure like you wouldn’t believe. ZTE is experienced in building infrastructure and can help these places leapfrog into the near future rather than go through lengthy development phases. Opportunities in the developing markets shouldn’t be tossed aside for the developed markets.