CIO Interview: Gary Steen, CTO, TalkTalk

Gary Steen, CTO at ISP TalkTalk, says transforming internal IT will help him meet growing demands for superfast data connectivity

Taking an IT leadership role in any enterprise means that your technology decisions, policies and practices will be laid bare for everyone in your business – and plenty outside it – to see.

It could be argued that taking such a post in an enterprise that happens also to be a major network firm and one of the UK’s largest ISPs leaves you open to much greater scrutiny.

For Gary Steen, who did just that when he accepted the post of CTO at TalkTalk, the challenge – a good challenge, he says – comes from his four million-strong customer base.

TalkTalk was launched by Carphone Warehouse in 2003 as a provider of landline and broadband services. A scrappy upstart at first, it repeatedly challenged the likes of BT with promotions such as its ‘Free Broadband Forever’ offer in 2006, which landed it in hot water when too many people signed up for the plan, and chairman Charles Dunstone was forced to appear on the BBC’s Watchdog to apologise.

Humbled, TalkTalk spent the next few years gaining scale by acquiring the customer bases of now long-forgotten ISPs such as One.Tel and Tiscali, and the UK ops of US internet pioneer AOL.

It is now beginning to move into a major transformation phase as it develops new products and services.

In the last 18 months, the firm has introduced mobile and TV services, becoming a true quad-play operator, and with over four million customers now relying on its services. Steen says his biggest day-to-day challenge is addressing the needs not just of his colleagues, but of millions of outside users.

“For example, lots of enterprise IT departments deliver email to maybe a couple of thousand, maybe 10,000 or 20,000 if you’re a big corporate,” he says. “We’ve got four million mailboxes. Everything is on a bigger scale, and it means that when we’re looking at technology solutions, we have to look at how they work from an ISP perspective, rather than just an enterprises.

“We receive literally 100 million-plus emails a day, and sticking them through an enterprise-grade spam filter, well, it would basically fall apart.”

TalkTalk’s customer spectrum also varies wildly, from pensioners getting online for the first time to connected millennials who grew up with the internet, and on the business side, tiny SMEs through to large corporates, including retailers Iceland and Next.

This means that expectations of what constitutes good service also differ, and so a big part of Steen’s role is to develop the right solutions and services to meet those changing expectations in the future.

Transforming for future growth

“We want to call ourselves a Great British technology company,” says Steen. “And if I’m going to call us that, I have to ask how do I create a Great British technology team that fits into that? There is now a big emphasis on how we shape our organisation over the next three years to get ourselves in the best shape for these new products and services.”

TalkTalk has already begun a recruitment drive, working with universities and grass-roots investment bodies to help attract new talent.

It is also pruning its internal IT estate, which, thanks to its acquisitive past, is much larger than it needs to be. As part of his three-year plan, Steen is consolidating a 4,000-plus unit server estate to about 400 virtualised servers, and is rationalising other systems by at least half. There are currently 50 projects under way internally, he says – a mix of decommissioning defunct systems and upgrading those that have life left in them.

“We’re leaving no stone unturned,” he says. “We’re starting off at the bottom, looking at our datacentre strategy, and above that, we’re dealing with our OSS layer, our switching and provisioning. We’re also working on a BYOD capability and we’re making a huge investment this year in collaboration tools across the group.”

An evolution in customer-facing applications is also on the cards. “We believe there is a huge opportunity to empower the customer to self-serve more,” says Steen. “I don’t just mean going online to view and pay the bill, but really to do the vast majority of your interactions with us as a company online.”

Steen agrees with the now-prevalent view that broadband connectivity is a utility, but says comparisons with traditional utility suppliers are perhaps a little unfair.

“Water pipes, 50 years ago, predominantly piped water,” he says. “Today, they pipe water. In 20 years, they will pipe water. It’s the same service and how you bill for it is the same. Our service is a pipe that is exponentially increasing in volume and how people use it is changing. No other utilities have that level of change. We just don’t know, in three to four years’ time, what people will do over their internet pipe. But what I do know is the more capacity we put in, the more they consume it.”

Video streaming, internet of things, set to change ISP business

There is no doubt that the challenges thrown up by TalkTalk’s diverse customers help make the job a bit more interesting, and anticipating how they are going to use the network is a key part of modelling for the future.

Video content is, naturally, a major growth area, helped along by TalkTalk’s own TV service, but services such as 4K ultra-HD TV are yet to make much of an impact on TalkTalk’s network – and for good reason, says Steen.

The accidental networker

Steen got his break in communications almost by accident, by his own admission “slipping into” a job with network services provider Martin Dawes Telecommunications in 1989.

“That was back in the day when we had the brick mobile phones and there was massive growth in this new industry,” he says. “The market has gone through a revolution and I never felt the need to move out of telecoms because there are so many things happening in the space.”

Indeed, Steen spent the next 23 years at Martin Dawes in a number of roles, eventually rising to CTO, where he owned product architecture, technology and design teams, and delivered a number of strategic projects working for comms firms such as AOL, BT, O2 and Vodafone.

He moved to TalkTalk in 2012, relishing the opportunity to work nearer the customer. He was BSS director, then chief development and delivery officer, before becoming CTO, will full responsibility for technology delivery, operation and strategy, following the retirement of his predecessor, Clive Dorsman, in July 2014.

With TalkTalk positioning itself as a kind of ‘people’s ISP’ in opposition to more premium services, such as Sky and Virgin Media, many of its customers coming online now are not early adopters of HDTV, or streaming content from Netflix, but are instead Freeview users experiencing IPTV for the first time.

“We see more people just dipping into that content, buying their first movie, downloading their first programme off BBC iPlayer,” says Steen. “That’s where our growth is at the moment – around digital enablement.

“There are a huge number of people in the UK who have still never had that and now that we’ve shipped a million or more boxes to the market, they have the ability to pause live TV, record it, series link it, which to a degree has been available before, but we’ve come at it from a different price point, bringing it to people who literally can’t afford a premium service.”

Another area of interest is the internet of things (IoT). Although the IoT is not yet causing TalkTalk’s network real pain, it is already beginning to affect it as customers acquire more and more devices. Steen says an average TalkTalk home has about 12 devices, and that this will grow, at first in areas around home automation – heat, light and domestic security.

“I don’t see that driving huge amounts of data, per se, because the IoT is a lot of devices doing short chatty bursts of data,” says Steen. “We see the bandwidth impact around video and 4K. But where it does get interesting is, although we’re not worried about the bandwidth your fridge will be using, if it doesn’t receive a recipe because it’s dropped its connection, then maybe the pipe isn’t working, so we’re challenged around assuring the customer experience in the home.”

The future headache for TalkTalk’s customer service agents will be the changing nature of the conversation, which has already gone from ‘PC or Mac?’ to ‘iOS, Android or Windows Mobile?’ and could in future be something along the lines of ‘microwave, central heating, vacuum cleaner or sprinkler system?’.

“People will say, right, I’ve just bought a connected microwave and it’s not getting an IP address,” says Steen. “We can’t just back the customer off to whoever built the microwave – we’re going to be required to assist the customer with it.

“We are already thinking of how we can build our next generation of routers and devices to help give the customer more control and more diagnostic capabilities at home; otherwise, they just sit on the phone trying to call customer services. If we empower them, it’s better for both of us.”

The promise of fibre

With help from joint-venture partners Sky and CityFibre, TalkTalk is currently building out an FTTP network in York, with the aim of bringing gigabit speeds to the city. Steen, a believer in the promise of FTTP as a better overall solution than FTTC, says going all the way to the premises “gives so much more to the customer, and the demand is there, so that’s why I’m happy to make the investment”.

But bringing fibre all the way to the home is an expensive business, and regulation around wholesale pricing continues to hurt many operators, TalkTalk included.

“The prices we get from wholesale don’t allow us to offer the competitively priced fibre products we would like to,” says Steen. “We bring people online who can’t afford to spend vast amounts and I’m concerned we will end up with a wider digital divide.

“We have some ongoing work with Ofcom in terms of pricing. Fibre is, for sure, part of our growth strategy, but we’d love the pricing to be more acceptable. We would pass that saving on, without a doubt.”

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