Guest
Paco Ramirez Neira
Head of COO, GMB Technology
Episode description
In this episode of the Data for Subscriptions podcast, we explore how mediation technology is transforming subscription businesses with Paco Ramírez Neira, COO of GMB Technology. We discuss how mediation enables real-time data flow across millions of devices in industries like telecoms, utilities, and automotive. The conversation also covers the growing trends of servitization and networkization, highlighting use cases in the energy and EV sectors. The episode concludes with insights on how a strong mediation layer helps companies scale efficiently and reduce costs.
Highlights
The Role of Mediation in Servitization and Networkization
We discuss two transformative trends: servitization and networkization. Paco explains how companies are increasingly moving towards selling products as services—whether it’s agriculture equipment, tires, or even large-screen TVs—on a subscription or pay-per-use model. These new business models require sophisticated mediation to connect millions of devices to backend systems, allowing real-time monitoring and decision-making. By embracing this approach, companies can capture valuable usage data, optimize services, and offer new revenue streams, further enhancing customer experience and operational resilience.
Transforming the Energy and Automotive Industries with Mediation
The conversation shifts to use cases in the energy and electric vehicle (EV) sectors. Paco explains how mediation helps utilities manage data from millions of smart meters and EVs, enabling efficient energy distribution and real-time pricing. By mediating between systems, utilities can balance supply and demand, offer tailored pricing, and optimize green energy usage. Mediation also supports seamless EV charging across countries and operators, ensuring consistent service and transparent costs, similar to mobile phone roaming.
Building Scalable, Resilient Systems with Mediation
The episode concludes with practical advice for businesses aiming to scale their subscription models effectively. Paco emphasizes the importance of implementing mediation from the start to manage millions of users and devices without compromising system performance. He shares lessons learned from real-world deployments, highlighting how the right mediation setup can save significant time and operational costs. As companies continue to expand their connected ecosystems, mediation will be a vital tool to ensure that their systems remain scalable, resilient, and ready for future growth.
Transcript
Behdad:
Hello and welcome to the Data for Subscriptions podcast, where we learn and explore how to run better subscription businesses. I’m your host, Behdadard Banian, and today I have the pleasure of welcoming Paco Ramírez Neira to the show. Welcome, Paco.
Paco:
Hello. Nice to meet you.
Behdad:
We’re going to talk everything around mediation and it’s going to be fun because typically mediation is known as something that’s used for billing cases. But today you’re going to share with us so many more cases with regards to mediation. But before we get to the really fun stuff with that, please tell us a little bit more about yourself and what led you to where you are now at GMB Technology.
Paco:
OK, thank you very much for the invitation. uh my name is paco ramirez nega I am from spain I have plenty years working in the telecommunications media high tech companies and um in the last ten years okay have been implemented quote to cash solution and basically doing business based on the rest of the technologies like digital route mediation and others Okay, since we’re going to be resting a lot on the term mediation and we’re going to refer to it over and over, so why don’t we start by level setting everybody and define what is mediation? Okay, I like to keep it simple because, you know, sometimes when we talk about mediation, people say, oh, wow, this is something super complex, okay, that is only used in telecommunications. And it is not right. We need to kill the phantom, okay? A mediation is an outstanding solution that we have to mediate between different components. In which situations? In situations that you have maybe thousand, why not millions of different end users connected to different service platforms and those service platforms need to be connected to billing system, core systems, backends, CRMs or whatever that need to be fit with that information. Again, let me highlight a couple of concepts. It’s not an integration tool, it’s a mediation tool, is to mediate between multiple service platform, multiple services in multiple format with multiple protocols but driving Why not billions of records? Okay. And this is one of the key things that people need to understand. Okay. Billions of records. Okay. Because in a lot of cases, you know that people confuse a mediation with an ETL. Okay. That is a tool just prepared to extract, transform and load information. Typically what you use when you have to replicate a product catalog when you have to replicate a customer DBE or when you have to capture transactions in one CRM and you need to send those transactions into backend. But here we are talking about resilient operations between millions conceptually of endpoints. Why millions? Just consider a telecommunications company. Maybe you have some core systems, but those core systems need to be connected with several different services, voice, mobile data, messaging, whatever, etc. Today we have several value-added services. However, beyond those, uh service platforms you have millions of subscribers that are connected generating consumption usage information and why not monitoring information that is key for your decision making, your real-time decision making, then a mediation is prepared for those kind of situations where you have to mediate between several different core systems driving billions of records on a daily basis.
Behdad:
Right. And I think it’s good that you went down the telco track because as you mentioned early on, mediation originated from the telco landscape. And some of us who’ve been in the telco industry, we’d like to say that that’s because telecoms was perhaps the first subscription model that matured at least. So that’s why we talk about CDRs or the call data records that stands for what you and me used in simple language when we make phone calls, how long, who we called, roaming fees, all of the things that we all recognize, all of us. That data, when you refer to the millions, the millions of us subscribers, and then you have multiple systems in the back end, and you need to mediate that data that comes in. But this is a good parallel to when we speak about businesses that are not telecoms, because you can draw a direct parallel to let’s just call them businesses in various industries, be it media and entertainment or being, for example, in the utility sector now with electric vehicles. There’s a lot of conversation around EV charging. In fact, this is one of the cases that we’re going to get to. I’m prepared to ask you, who has this longstanding experience, that the same scenario that you painted up in telecoms is now happening in other industries we have millions of subscribers and you have multiple systems at the back end and this data needs to communicate with each other oftentimes also real time
Paco:
Yes and this is I I will try to summarize what you’re saying with two words servitization and networkization let me drill down into each terminology servitization or everything as a service what means that that you know today A lot of companies, manufacturers, one time materials sellers are taking the business model of telecommunications and selling that on a subscription basis, on a consumption basis, on a pay as you go basis. Then, for example, a major part of agriculture machinery manufacturers are not selling anymore their tractors. They are selling you a subscription plus some consumptions based on the hours that you are using the tractor. Okay, I know one very big manufacturer of tires. Okay, probably one of the most important worldwide. Okay, that they don’t like to sell anymore to your tires. What they are looking is to sell you a subscription that will give you the possibility to have a set of tires and all the services related with your tires. Okay, for some dollars, euros, okay, on a monthly basis. Plus maybe if you have an accident, maybe some additional charges, okay, that could apply according with the agreement that you’re going to sign. Then the servitization is basically to sell everything as a service, okay? Is to bundle maybe a laptop, with the software license, maybe with some hours on a virtual machine, whatever, and sell you that service for some dollars, some euros, whatever, okay? Then everyone, What saw in the telecommunication industry attractive is to have recurrent revenues. Then everyone like to have recurrent revenues, not just to sell you a car. Okay. You know, car manufacturers are looking, okay, to basically to continue having continuous incomes. Okay. And this is what is pushing the civilization. But The servitization also pulls another thing that I personally call networkization. What means that? means that maybe if an appliance manufacturer is producing smart fridges or air conditioners or whatever maybe through IoT capabilities the fridge of your house maybe is connected to the service platform of that appliance manufacturer and they have to take decisions about if they have to sell, to send to your house a field engineering, okay, if the bridge is not working, or they have to take a decision to tune your fridge, okay, in a remote way, then you need to monitor, you have to collect usage, okay. We are discussing, for example, a project with a TV manufacturer that is looking to sell their biggest TVs. Okay. Eighty five or more. Okay. On a subscription and usage base because they have time counters internally and reporting that information okay they are going to charge you based on the usage of your tv okay then this could be a super attractive model maybe especially for super expensive tvs okay in the biggest sizes okay then Networkization means that when a telecommunications company used to have a million end users behind the service platforms, now appliance manufacturers have maybe thousands of end users with their fridges or appliances or whatever. car manufacturers are having millions of different appliances behind that, or we are working also with a medical equipment company, they like to sell to the hospital, not to sell, really to subscribe the equipment to hospitals, then they are going to have maybe millions of medical equipment that are measuring drugs, that are measuring hours of use or whatever that need to be reported, not only for their billing, also to know if the equipment is up and running because you cannot charge to that hospital if the equipment is not up and running. Then monitoring is critical. Okay, it’s not just a nice to have, okay? That means that now a medical equipment is going to have some kind of private network of their medical equipment, okay? Or this tire manufacturer is going to have millions, okay, of users using their tires, okay? That is the networkization.
Behdad:
Right, I think the term that has been used on the table for the last, I would say, fifteen years is typically referred to as IoT. And IoT is basically all of the devices that once upon a time we referred to as us as human beings. As subscribers now, basically, in theory, any device can be a subscriber on its own, seen as a source of data. But perhaps the most important point you wanted to make is also that at this time, A lot of companies have been capturing data, have been testing how to kind of capture IoT data, but now we’re moving more into kind of shifting the business model and start monetizing based on this data. And this is the core that’s going to be connected to some of the use cases. But before we go to the use case, Paco, I wanted to ask you something that you touched on that’s very important because you did make a distinction between mediation and integration, and you said that it is not the same thing. Mm-hmm. Let’s make it very practical and pragmatic for anybody listening, because there are a whole lot of companies out there that have either built some form of a, let’s call it mediation systems themselves. They are using perhaps different type of middleware, like an ETL or an iPass or whatever else that could exist. Sometimes we know that you also use just human labor and Excel just to kind of manage this data. My question is, if you’re listening to this and you’re wondering, what is the upside for me to use a specific mediation tool if I already have some form of a tool that to some extent manages the mediation?
Paco:
Mm-hmm. Mm-hmm. The problem that you have here is that, according with what I was explaining a minute ago, is that some companies think that, hey, if we are going to connect my fridges through an IoT device with my core systems, it’s going to be a simple integration. Maybe when you have two fridges, when you have ten fridges, when you have a hundred fridges, when you have a million fridges, it’s not the same. Okay, then, it’s not just a discussion about how you have to extract some information, transform some information, and load some information. No. In some cases, because the evolution of the technology, okay, you have different components, different IoTs, different cores, different backends, different CRMs, et cetera. Okay, and you have to live with all these components all together. Then it’s not just an integration between two APIs that you have in both ends. Okay, you have to collect information, you have to reformat information, you have to aggregate information, you have to correlate information, you have to enrich the information, and sometimes Okay, if you like to minimize customization on your core systems, okay, maybe you will need some recycling facilities because you have to Push all that information into a workflow and say, hey, now we need to reach or we need to go into a manual review or we need to do something else. OK, then you are keeping all the problems of mediating between two different core systems. OK, you are. let me say, limiting all these situations inside mediation, then you are going to have more standard core systems and all the mediation problems are going to be focused on the mediation, not everywhere. In a telecommunications company or in a large company, I used to see a hundred different systems with maybe dozens of ETLs, IPaaS, or different integration tools. However, okay, who can maintain that? Who can give consistency to multiple replications? Where is the master data? The consistency, sometimes that push, you know, data cleansing activities, et cetera, et cetera, revenue, leakages okay because all that inconsistencies then the mediation is giving the consistency is giving you compliance and is giving you resilience okay to Think big and build small. What means that maybe when you’re implementing your subscription and consumption based model, maybe in the ramp up you think that you’re going to have a couple of thousand customers. But if in five years you’re going to have a medium or two millions or ideally ten million customers, you’re going to have ten million end users interacting with your core systems. And you’re going to need a mediation, not an integration. This is not just to move data from A to B.
Behdad:
This is actually an interesting question that you evoked me to ask because it’s a popular strategy to have to kind of start small. And let’s just build something. And then when the growth comes, we’ll make sure that we set our capabilities up right. Do I understand you correctly with what you just said is that that is actually a mistake? Meaning, let me not leave it half clear. What I mean is this, what you say is you need to think down the road what your business will be three years, five years down the road and set up the right capabilities from the outset, from the beginning. Can I just straight out ask you that? Do you think it’s a mistake when companies start to think that, well, why don’t we just get started? Maybe we can just have some workarounds, just see if it’s tested and see if it works. And then down the road, we make the additional investments. In your experience, is that a mistake?
Paco:
No. What is a mistake is to think that… an ETL, an IPaaS or a limited integration solution is going to be capable to do the job of mediation. Because if you’re going to have millions of users behind your systems, you cannot drive that kind of information with an ETL or an IPaaS or an in-house solution. You need a resilient solution capable to manage that complexity, okay? And when I talk about complexity, I’m not talking about the complexity of the mediation. I’m talking about the complexity of having millions of users with millions of IoT components with maybe dozens of systems, okay, front ends, portals, okay, and so on, you know.
Behdad:
Paco, let’s talk about some of the use cases. And I want to come back to after that to talk about the business case and some of the basically quantifiable benefits as well that we can see with using a specific software tool as opposed to the wrong. So why don’t we start with smart meters and how we can leverage smart meters because I know that this is a space you have vast experience in and to kind of take it back to originally we said so mediation has been used for billing and it comes from telco but as you’ve explained now there’s a whole host of use cases that we are that you are deploying the same capabilities of so take us through what are we doing in this one or what are you doing in this space.
Paco:
You know that utilities okay are using smart meters for some years okay however they’re just installing a smart meter in your house they’re collecting the usage on a monthly basis or any other way okay and that’s all but You know that efficiency and the use of green energy is something that, especially in Europe, everyone is looking for. Then due to that, maybe You bought maybe a new appliance, an A++ appliance, super efficient, okay? And the to be or not to be question is the utility or the government of your country, okay? in the intention of them okay is to promote the use of super efficient appliance and a plus plus or or not because if your government or your utility is promoting that okay how you can differentiate that your appliance is a plus and might not because you have only one smart meter in your house then how I can differentiate the consumption of the whole house with the consumption of your new A++ appliance. That A++ appliance normally are connected appliances. Could have an IoT device that can report some specific information about the usage in terms of hours, in terms of the timeframe of the day that we are using the appliance. obviously the kilobytes okay that you’re using could report that okay but how you can net okay the smart meter of your house with the small smart meter that you are going to have associated with your new A++ appliance? Could mediation Okay, balance that and create a net measure of your usage for the rest of the house for your inefficient appliances and split the bill for your A++ appliance? And could your utility or your government give you an incentive, okay, giving you a discount of ten percent or whatever, okay, because for each of your A++ appliances? Then, which is the only way that That is doable with some of the agent. Right. Okay. It’s not just an integration between A and B. Okay. Or between two public cloud solutions. Okay. What you can do with an iPad solution. Okay. You need a mediation. You need a lot of intelligence. You need a lot of transformation. You need a lot of inputs. You need to identify house by house, appliance by appliance. Think in your utility and think how much How many houses or households they have? Maybe a million. And how many appliances do you have in your house? Then conceptually, your utility is managing maybe four or five million devices in the limit.
Behdad:
I’m tempted to go into the technical details of how that’s done, but I think that we risk running over severely. So we may save that for a follow-up session, Paco. I think this is very interesting, this case. But a close case to this, because we’re still in the space of, let’s say, energy and utilities, is with all of the electric vehicles that have been deployed. So, of course, a hot topic today now is the whole EV charging infrastructure. and the EV charging network. And then it kind of sets you off on that use cases. For those of us who are old enough to remember how mobile telephony was in the beginning versus what it is nowadays, where it’s very easy to use, well, most of the places of the world, you travel everywhere, you can keep control of the cost. You don’t have to wake up to a nasty surprises or nasty surprises in terms of bill shocks or whatnot might be. And you can basically use your phone in different countries. The vision here is that if you’re traveling, for example, with your electric vehicle, you should be able to move from one country to the next, such as you do with your mobile phone. You should be able to fuel your car. Tell us a little bit what, so again we speak mediation, so what is the use of mediation in this context?
Paco:
Well, actually you have two use cases. One is related with your comment, okay, where you’re moving in all Europe maybe or in all USA, okay, in big countries or big continents, okay, where People is going from one side to the other. And you need to charge your electric vehicle. Then you need a super efficient system to mediate between the different operators and to create a virtual hub of all the usage that is going to be collected from different countries or from different operators. By the way, think that, you know, the electric car charging business is driven by all gas stations, is driven by utilities, and is driven by supermarkets and shoppings, okay, that we are installing, okay, charging stations, okay, to promote purchase on their shops. Yes. Okay, then… the clearing okay between all these entities okay added to the dimension of countries okay is super complex then how you’re going to collect real time that information. And what happens if you also have a prepaid model, where you prepaid some kilobytes on a monthly basis, and you need to adjust the credit real time, internationally, like happened in roaming, for example. You need a mediation. This is not just to send information through a normal interface. It’s not enough. But let me go a bit more about this. What happened if in your neighborhood, okay, everyone buy an electric car and everyone arrives so maybe five PM, six PM, according with the country, okay? And everyone like to plug their cars, their electric cars. What is going to happen? Nothing, because you are not going to have enough energy. You are going to destroy the energy grid. Then what happens if with a mediation you are monitoring real-time generation, transmission, distribution and your households? And why your household? Because maybe you have higher three kilowatts, and I have higher only two kilowatts, then maybe if you create a virtual model from the generation, transmission, distribution, and household, okay, considering also the higher capacity, you are going to be capable to offer tailor-made rates for each customer for each household and you can recommend through a message or through whoever which is the best moment okay to charge your electric car.
Behdad:
And we’re seeing that specific scenario happening in more and more places, I would say, on a weekly and monthly basis. And here’s an interesting observation in some of the more forward-leaning markets where we have seen these recommendations on when to use more or less electricity because of just the energy prices being very high in the last couple of years. So it’s really pushed this development rapidly in the last couple of years. Now, one of my observations is that the electricity grid, it hasn’t necessarily been treated the same, but now this is the next wave as observation is, it’s following the same path, meaning building on what you said. We are anticipating with greater electrification. Everybody cannot be using the electricity grid at the same time. So we started off by saying, when should you use electricity at peak hours versus less just to save on, let’s say, electricity costs. But now we’re talking about the capacity of the electricity grid. So that is also one more factor that you need to capture that data and for the purpose of mediation.
Paco:
And also, excuse me, and also the generation with the green energies. You know, during nights you don’t have solar energies and sometimes during nights neither you have wind to move your wind mills. Then what are we going to do? Then the green energy has the same price, okay, or cost, I should say, okay, every day? No. Every time during the day? No. Then governments are promoting green energies, but green energy don’t have the same cost at every moment. then you have to also consider that situation.
Behdad:
I think we’ll have time to do one more use case, and then I want to make sure that we have time also for the business case discussion that I wanted to have with you. So let’s take the fourth one, I think, that I wanted to bring up with you. And this is to connect to when you talked about When you speak about complexity, you mean that there is a complex number of systems with different formats, different business rules, and then you have on the other side a lot of different customers or, let’s say, devices. Now, the question I have for you is, If we speak about mediation as an integration layer between different systems, being CPQ, CRM, billing systems, and so on, can you talk to us why mediation is important in that context and what it does?
Paco:
Mediation is important in that context where you have multiple systems, multiple protocols, multiple transformations, and millions of end users connected to your systems is critical because your operation, your complete operation is depending on that piece of technology, the mediation. Okay, then when you talk with a CIO, okay, probably your discussion is, hey, your system is fault-ordered or it’s not fault-ordered, but you don’t have too much discussions if you know who is driving, who is mediating, because all this complexity, okay, is resilient. if it has a global balance, giving you the possibility to add additional servers and in some way take, you know, peaks of consumption or whatever. Okay, you’re not going to have too much discussions about that. Then people cannot understand that the complexity of landscape is growing on a daily basis. And mediation is the only way that you have not to integrate but to keep consistency, to keep flowing your process across your landscape. Okay. Make sense?
Behdad:
Absolutely. Paco, when you look at a system infrastructure and you refer to as quote to cash, any business that does business, of course, has some form of quote to cash. What are you looking for? And what I’m looking for as an answer from you is this. For anybody who’s listening, I want you to give them something as a takeaway. Seeing from your eyes, what are you looking for, the indicators that are telling you something is not working properly here?
Paco:
Well, basically, you have two things. The first is implementation timeframe. Okay. when normally when you’re implementing a quote to cash system, normally take about eighteen months. OK, if you’re moving a lot out of those eighteen months, you have a problem and let me say, fifty or more percent of the problems or issues that I usually find is the basically integration problems. And the second problem super associated is data quality. and data quality in a lot of cases is a consequence of some not very nice integrations that create inconsistencies across the different databases that you have in the company. Then you understand what I mean then yes. First thing is time implementation time frame. And the second is, which is going to be your AMS cause to maintain your installation? Okay, your annual maintenance cost, quote okay to to maintain up and running your systems. When you have a mediation and my apologies I don’t like to talk about an integration layer I like to talk about a mediation layer, when you have a strong mediation layer you have all This integration, transformation, correlation, enrichment, you know, why not extensions, okay, to do specific things or recycling information limited to your mediation and you keep clean your core systems, okay? Think that is super important, okay, to decrease your AMS. Okay, your AMS could be, you know, you can save about thirty percent, okay, of your AMS with a mediation because basically, okay, you are going to keep clean your core systems and you are going to put all together all your integration and so on problems okay that your mediation can drive in a simple way okay.
Behdad:
So you beat me to the business case question. Are you saying that in your experience, on average, you could save thirty percent of your annual maintenance cost?
Paco:
Yes. I mean, you can save six months. OK, when you do, you know, when you think your project based on a mediation and not just including several middleware, ETLs, IPaaS, or whatever that you like to use. Because some companies say, hey, no, I have a middleware. Don’t come with a mediation. Congratulations. It’s just a middleware, okay? I’m not talking about the middleware. I’m talking that you need to bring in a mediation layer to integrate and to give consistency. And if you like to save money in your AMS, if you like to save implementation timeframes, etc. We are talking about different things, but some people confuse a middleware and ETL with a mediation.
Behdad:
So on a quote to cash transmission, of course, granted company and also the system complexity that you mentioned could impact. But you said on average, eighteen months time frame. You’re saying in your experience you can cut that time and risk and cost by six months and after implementation, the annual maintenance costs by about thirty percent by figuring out your mediation layer and get it done right.
Paco:
It’s doable because we have done that.
Behdad:
It’s a very strong and good statement. Okay, so let’s talk about as a final kind of advice to everybody who has been listening to this. We’ve said a lot of things in terms of what mediation is, what the use case is beyond billing. What would you say we should think about? Anybody who’s listening to you now and listening to what you shared in terms of your knowledge, what should they be thinking tomorrow? What are the two or three steps they should take if they want to go in the direction that you’ve given some insights around to improve, for example, their operational cost and their performance when it comes to quote-to-cash?
Paco:
If I have to summarize this discussion, I’d like to share three thoughts or three opinions. The first one is that you need to think out of the box. think out of the box is related with my previous uh comment that you know don’t think that if you have a middleware of you have something to do integrations okay that is enough okay think out of the box mediation is the next generation way to mediate between different core systems okay more when you have strong volumes more when you need to be resilient more when you need to be compliance think out of the box okay second you need to add more okay your core systems okay keeping those core systems clean don’t push extensions customizations or whatever into your core systems the place to allocate all these mediation problems is the mediation. Then keep clean your landscape and use all the strong capabilities that you have in mediation to make that integration mediation in general okay there and my last is as I mentioned before please think about thinking about networkization okay your customers millions of your customers in the next three four five ten years are going to be directly or indirectly connected to your core systems okay you cannot use mickey mouse solutions okay to connect millions of of of customers okay the iot the all these things that that you know are smart smart houses domotics There’s more cities, you know, everything is connected now. Then please think big. Okay. Think that in five, four, ten years, you are going to have millions of connected devices to your core system. These are my three key recommendations, if at least are my opinion. Okay. You can think in a different way, obviously.
Behdad:
To extend a bit on your third point, my experience, Paco, was that many companies that start off and they kind of want to get going, learn, and they can equip themselves along the way, typically find themselves in a bit of a trouble, it becomes like a catch-twenty-two, meaning that once you’re up and running with some level of business, even if it’s small, if you don’t have the right, let’s call it, mediation capabilities for purposes that you explained, it’s not entirely easy to kind of interject and start making changes because there’s always risk involved when you touch your quote-to-cash system, regardless of maturity it has. So typically it becomes a blocker, ironically enough, for that growth that they wanted to set themselves up for. So a piece that I would like to throw in to build on your third advice is do it right from the start. So at least this capability doesn’t become a prohibitor for your growth. Yes. It can sound like an easy thing to fix along the way, but it typically is not. So that’s the only thing I would add.
Paco:
Absolutely. Absolutely. Absolutely.
Behdad:
Paco, thank you very much for this conversation. Greatly appreciate it. And also thank you for everybody tuning in today.
Paco:
Thank you from my side to digital route um to all the audience okay that invest some minutes okay hearing us okay on our debating sounds.
Behdad:
Great, thank you so much!