By injecting considerable humor into his responses, Matt Bross technology officer for the BT Group, stole the show Tuesday when the industry’s leading chief technology officers gather for the annual ATIS TechThink CTO panel.

But he also repeatedly stressed the need for large service providers to be more open to innovation, to work harder to find it wherever it exists, bring it into their organizations and get it in front of their customers—sooner rather than later.

Decrying the distraction of being too tightly focused on profit and loss, Bross said service providers need to “change our mindsets and focus on how we can enhance the quality of people’s lives and how they do business.” As services move into software, service providers can move more quickly to create new things, he said, “to innovate at the speed of life.”

Bross said finding innovation and being able to bring it into a large organization with its own legacy and culture is the biggest challenge he faces as a CTO.

Integrating Web 2.0 capabilities into IP multimedia subsystems (IMS) is another considerable challenge, said Mark Wegleitner, senior vice president of technology and CTO for Verizon. “Web 2.0 is an unbelievable enabler, and IMS won’t realize its total vision until it finds a better way to incorporate Web 2.0,” he said.

Pieter Poll, CTO of Qwest, sees scaling the global Internet as the next big issue as Internet traffic grows at a pace faster than Moore’s Law, pushing service providers and their equipment vendors to seek other solutions than faster processing power.

While AT&T is happy with how its U-verse product is being adopted and received by consumers, Chris Rice, CTO for the company, sees home networking as “the final frontier” and believes service providers should work harder to take the complexity out of new services.