Vodafone Global Enterprise CEO looks for more from the cloud

Vodafone, VGE

Erik Brenneis needs to update his biography on Vodafone’s website.

The CEO of the UK-based operator’s Global Enterprise arm is, apparently, busy learning Italian.

Journalists tend to pick up on such details, particularly when one of Vodafone’s main rivals – BT in this case – has recently announced a massive accounting scandal at its enterprise-focused Italian opco.

Sadly, rather like BT’s corporate governance, Brenneis’ bio is behind the times.

“I’m not learning [Italian] anymore,” he says. “I was when we took over [connected car company] Cobra in 2014. But I froze it at a level where I can order a pizza in a restaurant.”

Understandably, Brenneis doesn’t want to be drawn on the debacle unfolding at BT Italia but he is happy to point out that Vodafone Global Enterprise (VGE) has a more upbeat story to tell.

As part of its announcement that a writedown of its Italian subsidiary had widened to £530 million, BT noted that its outlook for the international corporate markets had deteriorated.

But Brenneis says: “I don’t have the same view. The geographical mix and product mix [that VGE has] gives us a growing business now and I expect to have a growing business over the next few years as well.”

Results for the six months to September 2016 – when revenues at VGE grew 4.3 percent to €1.6 billion – back up this optimism.

However, the following quarter’s results, which were unveiled after this interview took place, suggest BT was not far out.

Vodafone did not break out VGE’s results for the three months to December, but did warn that the division experienced “slower growth… reflecting increased competition in India and customer losses in UK fixed.”

The UK, where Vodafone is partly reliant on a public sector customer base that is cutting back amid continued austerity and the uncertainty surrounding Brexit, is clearly a concern moving forward.

Understandably, Brenneis is keen to point out the performance of Vodafone’s IoT division, which is part of VGE.

Given he moved into the VGE hotseat in July 2016 after leading the IoT business for more than six years, this is perhaps understandable.

The challenge at VGE – a “bigger” job with “huge potential”, according to Brenneis – is evolutionary.

“There’s no need for a revolution,” says the CEO. “We will build on our strengths. Our heritage is mobile but… my mission is to transform the organisation into one that is known for any communication need – mobile, fixed, IoT and cloud.”

Is the emerging cloud business VGE’s weak link?

“From a perception point of view some people might think that but it is because they compare apples with pears sometimes,” says the CEO, referring to the fact that VGE does not compete in the public cloud space.

While rivals including Deutsche Telekom have made a play in this most competitive area, VGE is focused on selling private clouds and bundling in public cloud services from the likes of Amazon as part of a hybrid cloud solution.

Brenneis admits that there is “work to be done”.

He says: “I agree, we’re not viewed as major cloud player and we need to do more.”

The opportunity seems clear, at least according to analyst reports.

Research house IDC, for example, predicted spending on private cloud infrastructure was set to grow 11 percent to $13.9 billion in 2016.

Nokia, meanwhile, published a report in January this year that found that “most” large enterprises can save a minimum of 25 percent on their IT costs over five years by moving to a private cloud.

Amid such positives, Brenneis is confident cloud can become a substantial part of VGE’s business.

He says: “Customer surveys show that over half want to buy a cloud service with connectivity. We need to be in it – it’s all about execution.”

As part of this, Brenneis is targeting his commercial team. He says: “I’ve started a massive training programme for our 1,000-strong sales team with a special focus on selling other things than mobile.”

Channelling UK cycling supremo Dave Brailsford, Brenneis adds: “There are lots of incremental steps… it’s about continually getting stronger.”

This is an extract from an interview that is published in the Q1 issue of European Communications magazine. You can pick up your copy at Mobile World Congress on 27 February.

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