Ad hoc

An interview with Luis Alvarez, CEO BT Global Services

Will the 4th industrial revolution rather destroy jobs or create new ones?

The Fourth Industrial Revolution will both create and change jobs. It will most probably make jobs obsolete in certain areas, as always happens when major innovations break through. In particular it will automate the repetitive, painful tasks that don’t contribute to our development as humans.

As a result, we will have more time to learn new things, and collaborate better with others. Certainly, digitalisation will create new jobs that require new skills, not only in the IT industry but because new business models will emerge that wouldn’t have been possible a few years ago. And I think there will be a significant amount of new jobs that are more people-related – health, entertainment, creativity, art. This will also encourage young people to get creative with technology.

But I believe it’s not just about the amount of jobs – it’s about reshaping the way we work, specifically the amount of time we dedicate to work. If you look at how much time we waste today on commuting, or doing tasks that add little value – the Fourth Industrial Revolution will help us to generate the same value, and achieve the same outcome, in less time.

What do you think about this question, looking at your own company?

BT is the world’s oldest communications company, yet we are known as a major technology innovator who pioneers the digital advances that shape and drive the information age. We have been evolving to support customers in a very different way – now it is all about new applications and services, new ways of communicating. In our industry, we have the luxury of helping the world to be transformed by creating new opportunities for people to communicate.

Within our own company, there are roles that have changed beyond all recognition over the years, and there are new skills that we require all the time. We have created an environment where people can flourish and learn together, so we can be successful now and in the future. We will keep reinventing how to support the flow of information around the globe, and what we can do with that information – which gives us new opportunities to create new jobs.

What could be the biggest growth opportunities?

I often talk to our customers about how they can operate in a digital economy that is rapidly changing, and many talk about the cloud. The cloud is creating choices and opportunities that never existed before. From this comes the confidence and the ability to harness change and do things that matter: get to market and innovate faster, keep costs down, and keep customers happy.

Within our industry, and for any company, the growth opportunity is leveraging the value of our intellectual capabilities. The Fourth Industrial Revolution will enable us to do this in a more collaborative world – sharing more content, information, ideas, and creating things together. We will invent new ways of working, driving greater productivity – the opportunities are endless.

But this collaborative environment will need to be reliable and secure, and this security component is a significant opportunity for us as our customers look to change how they protect themselves and their customers. We are, for example, helping the automotive industry to make the connected car more secure with our “Ethical Hacking” expertise.

Our vision is to help customers move confidently and successfully along their cloud journey whilst minimising the complexity, risk and cost. No matter whether they are exploring connected cars, the internet of things, big data or telehealth solutions, we help people create, collaborate and communicate better than ever before.

We are already involved in a number of projects in this area – we are part of a “Smart City” project in Milton Keynes, for example; we are running Telehealth projects; and we are about to change the retail industry with new solutions that will bring together the online shopping experience with the in-store experience. We have just this week launched a global alliance called “Acuitas Digital” together with Intel and other technology leaders to drive that change. And we are working with Rajant, a pioneer and leader in wireless mesh networking, to enable industrial companies to connect and gather data from thousands of devices such as sensors, autonomous vehicles, industrial machinery, high-definition cameras, VoIP systems and so on.

Do you expect completely new competitors for your business? What could they be like?

The traditional communications market is becoming commoditised and IT services highly fragmented. We operate in a competitive market, and see new entrants into the market who we would never have considered a competitor in the past. I cannot see this changing – and as we ourselves evolve to meet the ever adapting needs of our customers, our competitor base will also evolve.

One of the beauties of digitalisation is that it is allowing new companies to be created at a much faster speed. Their objectives are to create services which are convenient, and which transform the way people interact – for example, new ways of booking taxis, booking hotels, and navigating cities. In our industry we will need to continue to understand this speed, as it will require us to continue to reinvent ourselves to support our customers.

The range of services that are available for customers will force companies to differentiate, and better demonstrate the value they add. They will have to understand how they are helping their customers, in order to thrill or to navigate in this digital transformation. And they need to continue to reinvent how they are using technology and how they are building their services.

New competitors are benefitting from lower barrier entries, which will allow them to start providing services very quickly. But the global services that customers demand requires you to be in almost every corner of the world, the availability of the services that corporate customers require, the security component that is associated to those services – it will be difficult for companies to make a new service to provide all that in just a few days. So we still have an opportunity to keep doing our best. Sometimes I think our strongest competitor is ourselves: We need to work hard to make sure we keep the ability to transform at the speed our customers are demanding.

And in many cases, companies who are creating cloud services like Amazon, Microsoft and Salesforce, are not competitors for us. Our role is to enable that the services these companies provide are available for the large corporations around the globe – with the best reliability and security. That is what we call the “Cloud of Clouds”: Integrating all these services so that the users can access them whenever they need them, no matter where they are hosted.

How intensively do you deal today with questions around data security, especially when it comes to cloud computing?

Security of data, IT systems and networks is one of our core competencies. BT employs some 2000 security experts around the world who look after our own systems and provide consulting and managed security services to our customers. Many large corporations move more of their applications to the cloud these days, but they are increasingly looking for connectivity options that reduce risk and come with assured performance. That’s why we have created the “Cloud of Clouds” vision, allowing customers to connect easily and securely to the applications and data they need, regardless of where they’re hosted. For example, we are providing our customers with direct, reliable and secure access to leading cloud providers like Amazon, Salesforce, Microsoft Azure, or HP Helion, while eliminating the risks associated with traditional internet access.

Data security has become a core topic in the conversations when we discuss how the digital transformation is happening, and when it goes wrong it gets to the front page of the main newspapers, so it is a topic that is frequently discussed at the board level.

There are two elements to this. The first, data security in the obvious sense, is core to the portfolio of solutions and services that we provide, and we are continuously looking at how to evolve the protections you need to build, because it’s a very dynamic market in which new threats are coming every day, and you need to help your customers to protect themselves. The second area, slightly different, is privacy. The European Union regulations and many of the legal environments around the globe are forcing all of us to implement new solutions and services to address this issue, but at the same time, the balance between privacy and security has to be a personal choice for many customers – understanding the risks that it brings, and balancing that with how convenient it is.

Looking at the safe harbor agreement, which has failed, does it make sense to build a European or a German cloud?

Personally, I believe that this is not about Europe – to me, it is global. The value of what is happening with digitalisation is that it is global. We are global citizens in an environment in which technology is facilitating us. So I am not sure the answer resides in country borders to protect data, or in the creation of limited clouds.

But obviously, we absolutely need to comply with the laws and regulations wherever we operate. It has always been one of our top priorities to help our customers protect their data and to be compliant; and the judgement of the EU Court of Justice throws the processing and storing of data into an even harsher spotlight. One possible answer to the EU judgement is to store data inside the EU. At BT, we operate 48 data centres around the world, 19 of which are in the EU, to give our customers control and choice of the location where their data is stored.

To what extent to you think about ethical questions of digitalization? More precisely: What should algorithms be allowed to “decide”, and where are the limits?

I think that as digitalisation brings opportunities and risks, as any technology, industry or new service. When you drive a car, you need to drive it carefully to ensure you follow the rules, legislations, speed limits. The car itself isn’t good or bad, it’s the way you use it. For me it’s the same thing with digitalisation – it’s not good or bad, it’s the way you use it – how it generates the right or wrong effect.

In that sense, when you have the opportunity to use algorithms or rules, if you have a very automated system as we have seen in stock markets, this could generate the wrong consequences if they are not well limited. When you look to you your apps on your phone for example, it is very convenient, but it can intrude into your life – such as when it targets advertising based on the data you have input. We need to allow each individual to have the right to decide to which level they would like to get information, and we need to make sure we don’t have processes or algorithms deciding things we don’t want them to decide.

In the future every business, city and home will be connected. That means everything, from computers to cars, will be a ‘device’, and those devices will need to protect users and their personal information. We should be able to trust our satnav systems to deliver us safely to the destination we want to go to.

For the most part, customers trust the tech industry to do that. But for organisations and their customers to be genuinely confident about their digital future, each and every one of us in the tech industry needs to keep on earning that trust. We need to make sure the security we offer and the ethical decisions we make keep pace with ever-changing risks.

To what extent will the digitalization of the economy influence the overall economic development this year?

We have a vision for a Connected Society: using the power of communications to make a better world. It’s not just about the digitalization of the economy, it’s also about the way we live and work. Digital technologies enable incredible new opportunities, but our responses to them are analogue – I want to use and touch my 3D printing, and my 4K HD television allows me to feel the emotion of supporting my football team. Digitalisation has the potential to boost productivity, create new jobs, but most importantly to enhance people’s quality of life.

What are your expectations for 2016?

Firstly, we should take the opportunity to focus on creating a stronger peace environment around the globe, and doing what is needed to be done to live together, rather than living against each other. Secondly, we need to keep looking at how we can help people who are still in difficult conditions, how we can give them a normal standard of living, and how we can embrace them into the digital world. We should look at the risks that continue to come, and I think that the global risk report that is published by WEF every year will give us a good indication of what are some of these threats that we should address together. So I expect a year with stronger collaboration around the globe to end 2016 with a better world for us and for our kids.