Telecom Review secured an exclusive interview with MATRIXX Software CEO and co-founder, Dave Labuda, during his recent visit to their regional offices in Dubai. Labuda rose to prominence following the success of his company, Portal Software, in the late 90s. He later sold the company to Oracle in 2006.
The origins of MATRIXX Software can be traced to the 2007 launch of the iPhone. Labuda and fellow co-founder Jennifer Kyriakakis, herself a Portal Software veteran, both instantly recognized that the new device was a game-changer that would upend the telecoms industry. Steeped as they were in the complexities of rating, charging and billing, the two immediately recognized a gap in the market. Two years later, in 2009, MATRIXX Software hired its first employees and began its journey to reinvent global business.
The company has seen tremendous gains in the past two years, with annual contract value growing at a Compound Annual Growth Rate (CAGR) of 70 percent, spurred by new telco and IoT customers across North America, Europe, the Middle East, Asia and the Pacific Rim.
In 2018, MATRIXX launched the first full stack, digital business support systems (BSS) deployment in the public cloud working with Google Cloud Platform and a Tier-One North American operator. To support ongoing customer growth, while continuing to grow the footprint of its market-leading MATRIXX Digital Commerce Platform, the company expanded its employee base by more than 50 percent. MATRIXX operator customers cite the software company’s engineering mindset, their solution’s seamless integration with the network, application-led design for digital services, and complex out of the box monetization use cases as key to addressing and overcoming the challenges they’re encountering from a technological perspective.
In an expansive interview, Labuda highlighted how MATRIXX initially faced considerable resistance from operators in the face of digital disruption. More recently, however, the CEO noted that continued pressure on operator finances has forced an awakening amongst many and a concession that if they didn’t change, they risked irrelevance, or worse, extinction. In short, embracing digital commerce was no longer seen as an area of interest; rather, it was accepted as critical to survival.
In addition to this, Labuda outlined what differentiates MATRIXX from other solutions on the market, its strategy for the future and the vital role he believes the company plays in the overall ecosystem of the ICT industry.
What do you think is the key role MATRIXX Software plays in the global ecosystem of telecommunications?
To understand the role that MATRIXX Software plays today, you have to accept that the entire generation of technology from end-to-end, from the network to the subscriber experience back to the ERP, was all designed around a set of expectations that is now antiquated. People made 30 calls a day back when these systems were designed, but they’re probably making zero now. Fundamentally, the complexity and chaos were limited by what a human could do with a feature phone. As a result, though they were built to be very rugged and reliable, with all respect to those platforms, they solved a problem that has now changed dramatically with the introduction of the smartphone.
That dramatic change, of course, was that consumers suddenly had the power to tap their phone and have things happen instantly. The consumer may not know or care what happens behind the scenes when they tap that little icon on their phone. But, they care a lot that their car or their pizza or their whatever finds them instantly and seamlessly. This is how the on-demand economy was born.
This is exactly the opposite of the experience operators had been giving their customers. Because their technology was still grounded in the flip phone era, there was nothing instant or seamless or on-demand in the market. And for us, that was the opening. Because we saw that if we could empower operators to be more creative with their businesses, and enable them with greater creativity and control over every aspect of their operations, they could offer that same transformed experience to their customers - a win-win that leads to a much more enduring commercial model. And that, of course, would be the foundation upon which our customers could completely reinvent their businesses.
So, what we’ve done is build a platform that essentially addresses digital commerce in today’s world while laying the foundation for monetizing 5G, the Internet of Things, mass adoption of self-care through the mobile app, and a marketplace type interaction with consumers.
Who is driving digital transformation? Is it coming from C-Suite?
In all of our conversations, digital transformation is absolutely being driven by the C-Suite – oftentimes, it’s even a board-level initiative. It’s actually been very interesting for us because we started the company assuming transformation would be viewed as more of an IT or network type of a relationship. But, as more and more industries embrace transformation, what C-Suite executives understand is that this isn’t just about the hardware and software; rather, it’s about complete reinvention of the business to digital.
We see three key drivers coming out of the C-Suite. One is positioning their companies for the future of digital commerce so that they can unlock new opportunities – either through better monetization of existing products; or, more likely, positioning themselves so that they can expand into new products and services as they roll-out new 5G networks.
The second is about increasing competitiveness. Operators have seen their balance sheets under assault for some time now and CEOs are looking at their businesses and seeing that digital can be a powerful weapon to help them better compete and win in the market. Whether that’s through product innovation or greater agility or some combination of both, setting their businesses up to better respond to changing market conditions is a big driver for a lot of our customers.
Lastly, it’s about efficiency of operations. That can mean moving IT to the cloud, for example. Or, just running an optimized hardware stack. But efficiency also means improving customer experience as a way of eliminating customer complaints. Which, I always like to remind people, is the best way to reduce the cost of running a call center. All of which, CEOs understand, is much more than just an IT issue.
What do you think it is that differentiates MATRIXX Software from its competitors?
I think there are three real differences that define how we are different, and, to my mind, explain the success we’ve been able to enjoy.
First, from a technology standpoint, we stepped back and we recognized that where the industry was going with the smartphone and that the entire approach with existing BSS solutions just wasn’t going to work. So rather than building on something that was fundamentally unable to perform to new standards, we designed the MATRIXX Digital Commerce Platform entirely from scratch, and we’re the only vendor that has done that. It’s been a huge investment for us, and we spent almost five years building the first version of the product to bring to the market. That was a big risk to start from scratch, but with 5G and the push to cloud-native deployments and so many other technological innovations, our customers are consistently telling us that we are the only solution that can meet their performance specs at scale.
The second thing we do very differently is our business model. The industry has faded into a business model where there are a lot of change requests and a lot of project-orientated development, but that runs directly contrary to business agility. If I want to attack the market, and my marketing person wakes up one morning with this brilliant idea, then I want to be in the market two days later and be ready to go. If it takes six months to program it, then you’re done. You can’t respond to competitors, you can’t do things that are orientated around a World Cup or an Olympic Games for example, so you really need that business agility. We’ve built a model around having a powerful, highly-configurable product rather than trying to force you to hire us to keep programming for you all the time. In a market dominated by heavy customization, this is just fundamentally a different approach to business.
The third thing is our people. We have been so fortunate to build an amazing team that really cares about the success of our customers. As a CEO I cannot tell you how humbling it is to hear our customers talk about why they love our company and hear them mention the integrity of our people as a key reason we are so successful. For us, across the entire organization, there’s a belief that if our customers don’t succeed, we don’t succeed. I know our people all believe it, and our customers can feel it.
Do you think 5G is driving a new urgency for transformation?
Absolutely. It’s been fascinating to see how attitudes towards transformation have evolved and I think that’s really been driven by operators feeling like they need to move now. Which, if you think about it, is really true. You’ve got all this investment being poured into 5G network capabilities on the one hand, and a connected devices market that is growing at exponential rates. Operators are looking at both of these and they’re urgently trying to sort out their monetization capabilities now or risk being caught flat-footed. Learning from previous technology leaps, where telcos unfortunately viewed monetization capabilities as something to be figured out later, has resulted in this incredible sense of urgency to establish those capabilities now, so that they can be ready to fully compete in the fast-approaching future.
The cloud is growing in importance across industries. Is the telecoms industry finally going to embrace it as well?
Of course, telcos have been operating in private clouds for years. What we’re really seeing change now is that operators are following other industries to embrace public clouds. The appeal of public clouds is that they offer operators much greater flexibility in terms of scaling their operations. We actually have several public cloud deployments right now. One is in the US where Verizon has launched its Visible brand on the Google Cloud Platform. The other is an operator in APAC who will be launching a new digital brand later in the spring. And, for IoT, it makes a lot of sense to go public cloud given the elasticity of resources required. Increasingly, as operators become more comfortable with the cloud, we see this trend accelerating, especially with 5G and its emphasis on edge computing.
How important is the Middle East market for you?
The Middle East has driven tremendous growth for us. We have a regional office now in Dubai, and we’ve more than tripled the number of employees we have working in the region. I think it’s a very young population in the Middle East. I’ve got kids from 18-26 years old, and if I tried to force them to use the old school Telco experience, they would laugh at me. They would never imagine paying $80 per month for a bundle and things like that. So, I think anywhere that has a high population of youth is going to push the market quicker. Which makes the market very exciting for us. Across the region, there are numerous innovation initiatives that are sponsored by the governments themselves. These are driving investment, of course, but they’re also stoking an appetite for digital disruption by creating a mindset of change and modernization. As a result, we’re seeing operators across the region really pushing themselves and each other to become digital leaders. We’ve certainly seen this within the Ooredoo Group where we announced, just recently, some really compelling digital initiatives in Oman and Kuwait. Where, again, the goal is to establish digital leadership today as a way of positioning for 5G and beyond tomorrow.
Of course, we’re seeing disruption in other parts of the world, but I think the Middle East region has some very visionary CEOs who are at the forefront of digital, globally. It’s a very exciting market and we have a lot of very exciting announcements in the region coming up!
You mentioned a couple of customers in Asia-Pacific?
The economies of the APAC region are extremely dynamic. Similar to the Middle East region, these countries have comparatively young populations that are very digitally savvy. This has driven substantial disruption across the region, and we’re seeing operators take very different approaches to how they are leveraging that change. We have customers, like Three in Hong Kong, that have taken a more traditional transformation approach with MATRIXX as a core component of their infrastructure. Then you have operators like Celcom with their Yoodo brand, which they launched on MATRIXX in under six months. I think both speak to the fact that, though our customers are taking different approaches to the market, they’re putting substantial investment into their transformation efforts.
What can we expect to see from MATRIXX Software in 2019?
I think fundamentally we’re going to keep scaling very, very aggressively. I think the domino effect is starting to occur in that we’ve stood up many successful projects across regions with a diverse set of operators. These operators have been large, small, some primarily prepaid, other postpaid and a few who have dared to blend the two. Some focused primarily on IoT and others on MVNOs. So, the track record now speaks for itself. Going forward, we’re also getting out and making sure that we’re the thought leaders for 5G and Internet of Things monetization. If you look at most of the vendors who can play in the real-time space, it’s the network equipment guys. But when they look at 5G, they’re looking at networking equipment and software worth billions. They’re not focused on the monetization side, and that’s our bread and butter; this is all we do. We’re going to continue to build out and harden our MATRIXX Digital Commerce architecture for more and more varied cloud deployments, taking advantage of our technology’s design to really leverage the cloud in new and innovative ways. We’re committed to empowering operators around the globe to realize their visions of business reinvention, and you can expect to see and hear a lot of very exciting customer announcements from us across every region over the coming year.
Ooredoo transformation success story
Ooredoo Kuwait, Ooredoo Oman
Transformation timeline: 6 months
Business Objective: Enriching customers’ digital lives
Transformation milestone: Both Ooredoo Kuwait and Ooredoo Oman are the first operators in their markets to launch such services, which provides an all-digital, individually customized mobile product that gives customers complete control of their mobile plans and digital worlds, and makes it easier to buy, use and pay for Ooredoo services directly from their mobile phones.
Innovation imperative: Driven by changing customer expectations for better and more compelling digital experiences, Ooredoo is committed to building future-ready capabilities as a way for people to enjoy the internet while enhancing their digital experience and creating new benchmarks for the digital market.
Path to market: Ooredoo Kuwait and Ooredoo Oman both launched a new MATRIXX Digital Commerce powered-stack. Building on the strength of their flagship brands, new capabilities are being launched as new digital offerings within the Ooredoo mobile app.
“Our new digital mobile services in Kuwait and Oman enrich our customers’ digital experiences with the freedom to choose and customize the digital package that fits their needs through features like eSIM, roaming and booster packs. We are proud to push the digital experience boundaries for our customers, bringing the best of Silicon Valley through our partnership with Matrixx.” - Sheikh Saud Bin Nasser Al Thani, Group Chief Executive Officer, Ooredoo.
Yoodo mini case study
Yoodo burst onto Malaysia’s well-established telco landscape in January 2018 with the business objective of disrupting the rigid market to provide users with greater control of their mobile and digital experiences.
Yoodo set out to break the mold of the conventional telco service provider by emphasizing on customizability to deliver the greatest value to customers. As such, Yoodo launched as Malaysia’s first digital mobile service offering users complete freedom to customize their mobile plan in terms of data, voice minutes and SMS on top of delivering unique product offerings and features that empowered users to live the lifestyles they want from travelling to gaming on the go.
Yoodo entered the market as the first fully digital mobile service, offering a completely digital experience to users that would allow sign-up, registration, plan customization and payments all to be done on the app and from the comfort of their own homes. Yoodo placed customer experience at the core of its business leveraging on positive user sentiment as the foundation of its initiatives. Through a simple and clear product interface, active and well-supported digital community and customer engagement sessions, Yoodo has successfully nurtured an approach that is delivering enduring and valuable brand loyalty.
In order to be the country’s first all-digital, app-based mobile service provider, Yoodo launched a new MATRIXX Digital Commerce powered-stack along with a built-to-order mobile app that was integral in powering the entirety of their vital customer experience.
Speaking on Yoodo’s path to market, Head of Yoodo, Chow Tuck Mun said, “We launched Yoodo with a clear vision for the Malaysian market – to empower customers with the freedom to control of their mobile and digital experience. We took the bold step of enabling our customers with the power to customize their mobile plans, giving them a voice in what they buy and how much they spend. Working in partnership with MATRIXX Software, we are able to offer innovative digital experiences that deliver meaningful value to those who demand it – our customers.”
