Inside Orange's innovation process

Yves Tyrode, head of Orange's Technocentre projects, talked to ZDNet UK and other journalists at the Orange Partner Camp in Cape Canaveral on Tuesday about how to link innovation and commerce in the modern technology market. He also touched on cloud computing, the politics of making researchers and marketing people work together, the importance of openness, and why selling broadband services in the UK is "a nightmare".

"Three years ago, our chairman changed innovation in Orange. We had R&D working a lot, marketing a lot, but without a lot of synergies. We decided to create Technocentre as a link between R&D and marketing to accelerate and facilitate innovation and new technology.

We put people from implementation, R&D and marketing in the same building – created a concept called 3 Partners, teams to take on business opportunities for new products or usage. These work as a start-up in the entrepreneurial spirit. This could be in TV, portals, APIs, or whatever. I'm leading all the teams – it's very pragmatic. A 3P is created, a business plan created, and along the way we decide whether to continue or not.

We created another Technocentre in Amman, Jordan for emerging countries a year ago. Last week, we created another in the UK, in Bristol. Each has specific skills. Bristol is mobile multimedia and TV, for example.

For example, last month we launched Orange Money, the ability to pay and do international money transfer using mobile phones, from Amman. We're always looking at new ideas – for example, there's a big demand for social networking in Africa, but no PCs. Could we do something that was SIM card based? Just an idea.

This is making us more and more international, and makes the link between R&D and the marketplace better.

We think that we have to be open to innovate. This isn't obvious to operators, but that's how we see it – although we have rules of course. We're also trying to leverage the Orange partner organisation. The benefits of the organisation to our partners is that it's very international, very open to the States and so on.

We also have some pure R&D centres still – the biggest are in France – but also one in the UK at Chiswick, one in San Francisco, one in Beijing, one in Tokyo. These are smaller teams in charge of identifying and detecting new technologies which may come to market. San Francisco is working on Web 2.0, Beijing on disruptive tech like IPTV. We're working a lot with our partners in China.

[ZDNet asked: How have you coped with the friction that traditionally comes when you bring marketing and research teams together?]

Friction is caused by having a lot of bosses! We make sure that all of the budgets are driven by the Technocentre. That's important. Each has a business plan, 3P means you have a team – at first, R&D is very R&D, Marketing is very marketing. They begin working together. I force them to be very customer-centric. First question: what is the benefit for the customer? Do testing. Show your mother. Does this work? Then create a business plan. Since they have to work all together, the politics go away very quickly.

Some things are absolutely mandatory. We have one unique and single process to launch all the offers across Orange, called Time To Market – TTM. Everyone follows the process. There's more research and development at first, we check how it's going. At the roll-out phase, there's more marketing. Projects continue after the launch, we need the feedback from the market to improve the products. For examples, the 3Ps for mobile broadband have existed for three years, and are now managing all the releases of the software. If a project stops, it stops. We have a process to do so. We try to stop it, if we need to, the sooner the better. It's very dodgy if you do so at implementation or roll-out.

All the enterprise products, mobile TV, broadband, and so on go through the Technocentre. A few things don't – legacy such as PSTN, and single country projects. But there's not a lot that's not multi-country. Each product has to be fully integrated into the roadmap, so there are tradeoffs – my job is negotiating this. Other benefits of working like that are by being multicultural and multi-country – we have 28 countries -- when we want to launch something we can find one or two countries that take it. Also, it's good for people, it used to be that if someone in broadband wanted to move into mobile, they had to leave the company. That's not true any more. They can join a new team.

[What about business services? Are they developed in the Technocentre?]

Orange business services are split into categories, so we have Orange Business Solutions for tailor-made things, and they're outside the Technocentre. But we also industrialise products for the SME. So we have a specific portal, a specific Livebox [broadband router], specific multimedia. We find synergies between the SME and consumer in many countries.

[How about in the UK?]

It's very difficult to launch broadband services in the UK. It's a nightmare. We have two different situations. In some countries we are the incumbent, in others the attacker. We need to deal with the authorities from both positions. It's very positive to the customer to bundle multiple services, for that you need value. And a good price.

In the UK, it's difficult to make a bundle available because of IPTV. You need 4Mbps, and the availability of that is quite low in the UK. We need enough bandwidth to provide what we know is key – if you split TV and VoIP into two proposition, it's very poor. But IPTV is very attractive, if you do it right - you can have multi-screen TV, electronic programme guides and so on. Iin France, we have the Orange Cinema channels, available on your laptop and on your TV

In France, if you've got good DSL and fibre, you can do IPTV. Eligibility is very low in the UK We have created something called the non-eligible zone, which uses satellite for video on demand, but it's sold in the same way as the wired version under the Multiplay name.

We need access to the infrastructure and flexibility from the incumbent to let us bundle and create our offers.

[How about the cloud?]

You get volume from consumer and the margin from enterprise – you need both.

We're working on cloud computing, as is everybody. But for what services? We'll need storage. The beauty of cloud computing is that you store your data but you don't know where. We need to have in mind that this is really good if the uplink is good. If the uplink is bad, it makes the promise less. We are working on that, it's an issue if you don't have any fibre then the issue is unsolved. "