I was today reminded of the tale of the ‘Emperor’s New Clothes.’ You surely remember it? A vain Emperor who cares for nothing but his appearance and attire hires two tailors who are really swindlers that promise him the finest, best suit of clothes from a fabric invisible to anyone who is unfit for his position or “just hopelessly stupid”.

The Emperor cannot see the clothes himself, but pretends that he can for fear of appearing unfit for his position; his ministers do the same. When the swindlers report that the suit is finished, they mime dressing him and the Emperor then marches in procession before his subjects, who play along with the pretense. Suddenly, a child in the crowd, too young to understand the desirability of keeping up the pretense, blurts out that the Emperor is wearing nothing at all and the cry is taken up by others.

Talking around the traps at Management World 2012 in Dublin, I was taken aback by the number of vendors and operators already purporting to have in position technology that has only previously been talked about. The whole theme of the event was centered around the new digital services – anything that can be digital will be – and it was amazing how many M2M, e-Health and m-payments solutions were already on offer.

Whether they are real or vaporware is not really relevant, the fact is that the market is embracing ‘digitality’ in all its forms, but like the Emperor, we need to be sure the ‘clothes’ exist before we start parading in public.

Discussing this very point with Prof. George Huitema from TNO in the Netherlands, he raised and even more interesting analogy – The Naked Operator. This is much more palatable than being called a ‘dumb pipe’ and implies that an operator could strip away lots of outer layers exposing its key assets for all to see (and use).

Removing complexity and getting down to core offerings doesn’t mean becoming a pure wholesaler, it means streamlining part of an operation to become a virtual network enabler (VNE) for any other party that wants to offer digital services direct to a market sector.

The naked operator could be selective about who it allows to become a virtual network operator (VNO) or retail service provider (RSP) to avoid direct competition with its own retail activities, or it might decide to set up its own VNOs appealing to selected market sectors that it does not currently address or do not fit the main brand demographic.

We are going to see the ‘digital tornado’ that Keith Willetts has forecast, but it may be very selective where it strikes. The agility needed to address particular market sectors will call for a naked operator with easy API accessibility and a simple range of core features to help a VNO/RSP get up and running. The rest is up to them, whether building their own business systems or utilizing third-party cloud services (that could also be supplied by the naked operator).

The choice of being the ‘Emperor’ or becoming a ‘Naked Operator’ is notional, but one certainly seems to be more logical than the other.

First published at TM Forum as The Insider, 24 May 2012