A TIP-ping point for network infrastructure? BT’s new startup accelerator kicks off

Regular readers of CWJ will already be familiar with TIP, an initiative started by Deutsche Telekom, Facebook, Intel, Nokia and SK Telecom in 2016. TIP seeks to change the way that networking infrastructure technology is developed and deployed with the ultimate goal of making it much cheaper and better, much sooner. This is naturally an idea which telcos are enthusiastic about, and BT is a keen TIP member. 

"The telecoms infrastructure market is dominated by a few big players, explains Darren Lewis, principal innovation consultant at BT. We’re trying to get a few new people in."

Specifically, BT and TIP are seeking to increase the pace of innovation by getting more startup companies involved through mentorship in incubation spaces called TIP Ecosystem Accelerator Centres (TEACs). Currently, there are TEACs in Paris and Seoul, under the sponsorship of Orange and SK Telecom, and a newly announced TEAC opening in Berlin hosted by DT. Now there’s one in the UK as well, under the aegis of BT, and CWJ attended its launch at the BT Tower. 

The Big Beast is changing its spots

"Cultural change is absolutely critical," explains Mansoor Hanif, director of the Converged Networks Research Lab at BT. "BT is a big hairy beast. There has always been a will to innovate here, but movement has been a little bit slower than it should be. Telcos haven’t always been the friendliest organisations to startups: but now we are coming together."

Mansoor Hanif

BT is a hairy big beast, says Mansoor Hanif: but it is changing.

Startups in the new UK TEAC will have access to more than £125m of funding from various British-based investors. Traditionally, tech VCs would be reluctant to back startups in the telecoms infrastructure space: the length of time it has generally taken to deploy new technologies meant a long wait for returns, and the large size of most telcos leads to a perception that it’s difficult for small companies to do business with them. A lack of VC investment means that startups don’t start up in the first place. 

"We need to reverse that spiral," says Yael Maguire, director of hardware engineering for Facebook’s connectivity efforts. "That’s why in establishing each TEAC we’ve engaged the local VC community from the very start."

Yael Maguire

Reversing the VC startup death spiral is critical to bootstrap innovation, argues Facebook's Yael Maguire.

Some of the new funding will come from Downing Ventures, which has been involved in the UK TEAC funding process from the outset. Downing is headed up by Matt Penneycard, who was also at the launch. 

"Hardly any VCs are electrical engineering graduates, says Matt. Telecoms infrastructure is a new area for us, and IP-rich activity like this is difficult for VCs. It’s always easier to invest in another dating app. But this feels like a moment in time when there is a genuine investment opportunity. 
VCs often overestimate their own importance," he adds. "If our ego tells us we can run companies we generally screw it up. Really our job is just to write a cheque. The UK TEAC could be super exciting if we leave our egos at the door."

The centrepiece of the launch event was the selection by the TIP judging panel of three startups from the shortlist of six to join the UK TEAC. To make the shortlist, these six startups had already been selected from an initial list of more than 40. On the panel were Yael Maguire, Mansoor Hanif, Dr Tim Whitley (MD of BT’s Adastral Park research campus in Suffolk), Josie Smith (BT’s chief IT architect), Adrian Smith (BT network architect), Axel Clauberg (acting chairman of TIP) and Leland Lai (executive director of TIP). 

The six contenders were Aparna Systems, developing converged cloud hardware; KETS Quantum, specialising in quantum-secured communications; Apstra, with its intent-based infrastructure operating system; imVision, using AI for telecoms anomaly detection; Zeetta Networks, focused on software-defined networking; and Unmanned Life, aiming to deliver autonomy-as-a-service to drone fleets. Each company delivered a ten-minute pitch before keynote speeches from Yael Maguire and Howard Watson, BT CEO of Technology, Services, and Operations. 

Watson focused on his company’s reasons for getting behind TIP and the UK TEAC. 

"The pace of change is accelerating all the time, he told the assembled TIP members. The amount of data moving over our networks is up 50 per cent just in the last year. It has never been more important to deliver programmes at scale, and history shows that those who only look inward miss out on the real game changers. We truly believe that the best innovation happens as part of an open ecosystem."

VC's often overestimate their own importance. Really our job is just to write a cheque. 

- Matt Penneycard, Downing Ventures

BT Labs will provide the framework for the UK TEAC, both in London’s Tech City and at the Adastral Park research campus, where there is already a research cluster of more than 100 companies. 

"The real value of TIP and TEAC will be to produce positive outcomes for everyone, says Watson. This is a non-zero-sum game."

This comment was echoed by Axel Clauberg, TIP board chairman and VP at Deutsche Telekom, who formerly worked at Cisco. 

"Having worked for 13 years on the supplier side, I believe that traditional large networking vendors will still have a major role, he said. But this industry needs more radical approaches to achieve the capital efficiency we need. In the 1980s, telcos got the talent. In the 1990s, innovation was driven by the vendors. Nowadays it’s sexy to work at an internet company like Facebook."

"The idea behind TIP is to bring them all together."

The event culminated with the announcement of the winning startups, made by London’s Chief Digital Officer, Theo Blackwell. The three chosen to be the first entrants into the UK TEAC were KETS Quantum, Unmanned Life and Zeetta Networks. Further selection rounds will be held on a regular basis, as the UK TEAC expands over the coming year. 

A TIPping point for network infrastructure

It seems clear from the calibre of the attendees at the launch and the sentiments expressed that these companies and others like them will now have the access and visibility at the telco level which startups have found hard to achieve in the past. This, according to the many VC representatives present, makes the prospect of investment much more attractive. Startups with serious backing and access to telcos who are keen to “evaluate ideas at scale”, as BT’s Watson put it, could indeed deliver more rapid innovation and faster, cheaper infrastructure sooner. 

Meanwhile the drive to connect the world’s remaining unconnected billions also means a bigger market overall, which ought to bring some cheer to the boardrooms of traditional networking vendors. 

So it is, indeed, a non-zero-sum game: everybody wins. 

BT Tower: The BT Tower was the tallest building in the UK from 1965-80, but it was left off Ordnance Survey maps for security’s sake until 1990. Nowadays it’s a switching hub for broadcast, and touches 95 per cent of TV traffic. 

This article was originally published in the CW Journal: Volume One, Issue Two.

If you would like to receive a free copy of the CW Journal, please submit your details here. The CW Journal Editorial Board welcomes comment from those of you who would like to submit an article - simply email your synopsis to the team.

^{Pg 8-9}