Non-traditional competitors may pose a threat to investor-owned utilities. New research shows that real competition is coming from brick-and-mortar retailers, cable and phone companies, and online...
The Next Convergence: Energy, Telecommunications and Internal Infrastructure
feat to any extent. Armed with a set of appliances (e.g., radio, TV, compact disk player, telephone, pager and PC) plugged into the electromagnetic spectrum, media and entertainment are trying hard to create a new personal environment to mold consumer buying decisions.
Analog interfaces (hard copy material including invoices, and order forms) and portals are being replaced by digital ones. The struggle to win the consumer dollar spent on flowing content is intensifying. The pressure on the energy, telecom and IRI industries to converge will grow irresistible. The need for successful content merchants to gather around the Strategic BCCS System will expand into the inescapable.
The emerging energy value chain will be distinct from telecom, water and IRI the further an element of this chain falls from the consumer portal. For example, at the energy production end, GEMCOs will evolve (see Exhibit 2). In the high voltage, high-pressure Big Wires and Big Pipes segment an energy/telecom Network Delivery business will likely manifest itself. As the final physical conduits end, hundreds of limited-geography energy LDCs may be replaced by a few new, multistate entities called RLPs (Retail Logistical Platforms).
Finally, in true retailing, there will be extensive integration of the gas, electric, telecom and other flowing-content industries. This integration of retail value chains will stimulate the rise of continental merchants. These merchants will seek to control the portals of millions of consumers via the Strategic BCCS System, offering endless combinations of features stapled to a few electron, molecule, bandwidth commodities and conduits and branded interfaces. These new merchants surely will try to position themselves on top of the trillion-dollar convergent value chain by controlling the consumer portal.
Energy Marketing (em Five Pillars
With the new value chain will come a new marketing. The new marketing seeks to deliver mass customized results, not push products as traditionally understood. Companies who compete on the value proposition of customized results will embrace the new marketing. These companies will invest the substantial intellectual and financial capital to construct the five pillars essential for retail success in the convergent market.
1. Enabling Platforms: A combination of a functional capability and a web of competence;
2. Features Engine: Creates myriad applications using the enabling platform as the foundation. A features engine encompasses customer collaboration; proprietary and third-party-created features library; and a combinatorial tool for bundling features in particular ways most satisfactory to a given customer (hence the importance of customer collaboration);
3. A Strategic BCCS System: Integrates knowledge, delivery, price/performance options of various features bundles atop an enabling platform, payment method (e.g., stored value cards, cash, credit card), an information warehouse, a help center and a secure private network for cyberspace financial transactions. A gift of the Strategic BCCS System will be the capacity to provide integrated billing for any conceivable combination of services, pricing permutations and payment variables (something no energy company can even hope to do today and telecom companies can do on a rather limited basis). The integrated bill, a minor aspect of the Strategic BCCS System, alone will confer 3 marketing advantages:
(i) Enhance customer