Is there a business case for differential pricing within IMS and are there lessons to be learnt from Japan and Korea?

As discussed in my last blog on this theme .. Person to Person IMS applications – will they take off or will there be only Web applications

I explore the question here: Is there a business case for differential pricing with IMS?

And the related questions:

a) Do we see any instances of differential pricing in mature markets like Japan and Korea and

b) Do users adopt differential priced services in Japan and Korea?

c) How is that differential pricing implemented? I.e. on the network, in the device, as a service level agreement in advance etc etc?

My proposition is:

If we don’t see customer adoption of differentially priced services in Japan and Korea, why do we expect that we will see them in the West? And the counter argument – if we do see such services, what can we learn from them?

To give some context to this discussion,

One of the key IMS motivations for many Operators is the ability to price a service differently .

On one hand, we have the principles of net neutrality (all packets are created equal). On the other hand, we have a situation where closed/private networks do not follow the principles of net neutrality.

Tim Wu explains this best(and I do follow Tim’s thinking) .. When he says explores the idea of what is neutral in context of net neutrality

I think the best, although still not ideal way to think about this problem is with the help of a private/public distinction. Private networks in this sense of the word are networks that aren’t interconnected with others. The cable TV network, described above, is a good example. On a private network, discrimination part of what gives the network its utility. By definition it is closed to outsiders, and that’s what makes it useful. The main point is that discrimination on a private network does have effects on the broader network – it doesn’t spill over.

So, there are instances of private networks which are exempt from the ideas of net neutrality. We see this on the fixed network as well with VPNs

Question is:

a) Does this idea(private networks) flow through to mobile operators? Note that if it did – it would coexist with the ideas of net neutrality

b) How will it be implemented?

c) Is there a precedence in Japan and Korea for such a service(a mobile private network or a mobile network with a guaranteed QOS and differentially charged)

d) If so, how is it implemented in Japan and Korea?

Note that I am speaking of mobile private business networks (not consumer scenarios).

If indeed such scenarios could be identified in Japan and Korea – we have the precedence of similar services potentially taking up in the West.

Why?

Because consumer scenarios may differ but I expect business scenarios to be the same between Japan/Korea and Europe/North America

Hence, it is an interesting question ..

Thoughts?

On device portals – ODP, Widgets and the Phonetop: The iPhone killer, Saviour of IMS and the future of mobile apps?

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In my talk on Widgets at Mobile Web Americas , I proposed the ideas outlined in this blog. The ideas are not new – but it’s a concept whose time has come.

I am calling it ‘Phonetop’ for the lack of a better word i.e. a desktop like interface on the phone (which I will explain better below). To grasp some of these concepts (and why widgets are becoming so critical to mobile devices), we have to understand the idea of On device portals (ODPs). Like my good friend, Dr Andreas Constantinou (whose views I respect and follow), I also track On device portals.

As it’s name suggests, the ODP(On device portals) is a generic term to indicate a portal residing on the device and used to access a range of services and applications. The use of the word ‘portal’ is a bit misleading as we will see below. Also, this description hides its true significance. Hence, I have tried to collate a set of characteristics of an ODP and also contrast ODPs with it’s predecessors(WAP portals)

Characteristics of an On device portal(ODP)

a) ODPs are native to the device. The same functionality can be implemented at a number of other points in the software stack for instance through the OS(Symbian), applications(Java, Brew, flash) or browsers and so on. However, the ODP is device native and hence different from all the other higher level implementations of the same type

b) The ODP is an access point(a portal)

c) The significance of ODPs lie in being as close to the first screen as possible (or in being the first screen itself)

d) ODPs are client side but need good server side integration to be really useful. Hence, by definition, they are far more complex than their predecessors like WAP portals which were client only with little or no device and network integration.

e) ODPs could have additional features such as content discovery mechanisms, click to buy, content previews, local caching, dynamic management and configuration and so on

Having now agreed on a basic definition of an ODP, here are some more thoughts

ODPs are a manifestation of the Widgets vision

I have long been talking of Mobile Widgets being an evolution path from Mobile Ajax. The next logical step is for the Mobile Widgets to be accessed from the ODP. This is the holy grail because it brings all the ODP features to the Widget(for instance access from the first screen, network integration etc) complementing the Web widget’s existing strengths(following web standards, access to web content via RSS, long tail applications etc)

Notwithstanding the above, widgets can be implemented using other means (such as Java and Flash) as long as they are integrated in the device. However, for me, the conformance to the Web standards and the ethos of the Web is critical. Vendors like Opera have shown that you can follow Web standards, facilitate communication and still differentiate your service from others. For instance, in case of Opera, it is the experience and ability to run on multiple devices and platforms(including the Nintendo Wii for instance)

Saviour of IMS and a boon for Network Operators:

Network integration is an important element of the ODP vision. ODP is a client side technology. To be useful, it must have a server side component. The server side component could be in the Operator network(but not necessarily so). If it is in the Operator network, then ODP complements IMS very well because IMS could facilitate the network abstraction and the services so exposed could be accessed on the client via the ODP and integrated into specific applications i.e. the Widget. At the moment, IMS is a technology looking for applications and ODP + Widgets could be the way to go.

ODP for device manufacturers:

I mentioned above that the client side(ODP) needs a server side(network) technology. This server side component could be in the Operator network – but need not be so. For instance, once a device can access other networks like WiFi and Wimax, coupled with other elements like on device GPS; the server element need not be a carrier network. Thus, device manufacturers have a lot to gain because devices are the closest to the customer and are the brand that the customer most identifies with.

Comparison to WAP portals:

If you have followed the ‘on device’ and network integration significance of ODPs, then you can see that they are actually very different from the WAP portals. Some analysts have compared ODPs to WAP portals because that’s the closest comparison within the Mobile data industry – but really – ODPs are a step evolution to the old style portals primarily due to their network and device integration

The gold rush and a cautionary tale:

For all my optimism for the idea of the ODP, there is still some way to go since the device and network integration is complex. In fact, the initial results have not been optimistic as seen from Dean Bubley’s comments on the Orange – Surfkitchen implementation. While this may be an implementation issue and may not be solely the fault of the ODP concept/ODP vendor(in this case surfkitchen), the stakes are indeed high .. i.e. once the customer is put off , they are not likely to come back. Hence, the winners in this game are those who can manage the complex integration at the device and network level. Not for the faint hearted!

Not Yet for the end user :

At the moment, this technology is still being worked through the devices and the networks. Hence, not an area the marketing and PR folk can get too carried away with since its true impact will be felt only later in 2008(in my view) especially considering that devices will need some time (considering upgrade cycles) to filter through to the public.

Déjà vu?

Have we not seen this before? For example: Technologies like Motorola’s Screen 3 technology has been around for a while. Is that not ODP? . While some features of the ODP have been around, the full implementation of an ODP is a much more complex process. Also, the networks, devices etc have evolved in a big way – so we are on the verge of implementing a much more complex, integrated service.

At the RFP stage:

According to visionmobile, There are now more than 20 vendors in the ODP space, including Abaxia, Action Engine, Celltick, Cibenix, Communology, Crisp Wireless, Handmark (Pocket Express), Geniem, Macromedia (FlashCast), MSX, Nellymoser, Onskreen, Openwave, Opera Platform, Qualcomm (uiOne), RefreshMobile, Silk, Streamezzo, SurfKitchen, U-Turn and Volantis. There are now more than one RFP for ODP products being announced each month globally. So, these concepts are definitely not at the customer phase(and we don’t want ignorant marketing people hyping this up like they did for WAP!!)

The iPhone killer

The iPhone has raised the bar. ODPs are the way to implement iPhone like features without being an iPhone itself(the iPhone, for all it’s hype, has some distinct disadvantages such as price and the walled garden approach). They are also a more generic way to implement the same features and cool user interfaces(see my blog The iPhone is extraordinary not for it’s user interface – but because it is the tail wagging the dog .. and the real question is – how many dogs can the tail wag). Hence, the ODP concept could be viewed as an iPhone killer and will be likely to be accelerated within the non iPhone commumnity .. but the flip side is – the there is little room for error because the customers have a much better device to compare with

Is it a portal?

Well, not really.

The portal strategy is dying on the Web – as AOL found out much to it’s dismay

>>>

The company’s challenges highlight one of the quirks of today’s Internet market. As advertising is moving from offline media to the Internet at a rapid clip, portals, which command some of the biggest audiences online, should be among the top beneficiaries. Instead, the travails of the mass market portals like AOL, as well as Yahoo and Microsoft, indicate a decline in power.

<<<

I don’t believe that people will go to a specific site. Those days are long gone with Web 1.0 i.e. people are now used to consuming content away from the source. Thus, merely replicating the Web portal through an ODP will not work just because customers are not used to being told what to do. Having said that, some (silly) Operators will try it though!

Solving the deep blue sea problem

The ODP concepts go a long way to solving the deep blue sea problem. In my keynote at Mobile Web 2.0 event in London, I spoke of the ‘Deep Blue sea’ problem – which in a nutshell is as follows

Mobile Web 2.0 extends the ideas of Web 2.0 to mobile devices. In this scenario, the Mobile Device becomes the key element to harnessing collective intelligence. The problem is – if the mobile device does not add something new .. then we end up feeding the Flickrs and the YouTubes of the world i.e. chucking all the content to the ‘Deep blue sea’ of the Web where it merges with the vast oceans of already existing content.

The paradoxical challenge is to provide something unique from a mobile angle but at the same time, maintain the ethos of the Web(open standards, no walled gardens etc). ODPs provide that unique ‘mobile only’ advantage with all the features highlighted above and yet can be integrated with the Web.

Which brings us to the final question .. Is ODP a new form of walled garden?

The answer to this question is: It depends. Depends on the implementation. I don’t mind if an Operator controls the first screen as long as they give the customer the ability to add and subtract icons(applications) from that screen. This would then look like a typical ‘desktop’ screen – cluttered with icons – which I call ‘Phonetop’. I would not call ODP a walled garden as long as the end user was not forced to use the applications pre configured on the device.(see a more complete definition of a walled garden in my view the link )

Conclusions

In my view, ODPs are a major development and certainly one to watch. They bring together many of the ideas I have been talking about for some time. However, a lot depends on the implementation. The phrase ‘On device’ offers a clue. Sensing opportunity, many vendors will enter this space and will attempt to retrofit their WAP/Symbian/Java portals around the ODP concept.

However, the ‘On device’ will be a major differentiator because very few people have the experience of deploying applications on devices. In fact, deploying on devices is the exception rather than the rule. By that, I mean, we normally try and work at higher levels of the stack and most applications(such as games) do not need the deep network and device integration that ODPs demand.

Thus the maturity, experience and device/network level integration skills are the key differentiator. This means the more familiar players like Opera, Nokia etc. It also means a host of new players. In the Mobile Web Americas audience, was a company called Ecrio

whose technology powers 10 million plus FOMA handsets. This type of experience will be essential to create optimised solutions.

I also believe that Flash Lite has a narrow window of opportunity to become a mainstream technology – mainly because I believe that the licensing model is too expensive and it is a proprietary standard. As we can see from the above, there are a number of companies whose products can do the same thing

Finally, this is an area of interest for me and also an area I am working as a consultant. So, please contact me with any questions/viewpoints which I can add to this blog at ajit.jaokar at futuretext.com

Image: Google images

Links from my Oxford courses: Web 2.0, IMS, user generated content, mobile web 2.0

Last week, I conducted two courses at Oxford University: Web 2.0 and user generated content (now conducted for the second time) and Mobile Web 2.0 and IMS (conducted jointly with Mark Searle)

These courses have an industry audience – i.e. not normally for the students of Oxford – and participants included senior strategists from Qualcomm, France Telecom, Nokia, Du, HP, Mobile Dhamal (India), Vodafone, BBC, three, Openwave, HP, Michael Page International and also a number of start-ups and communities

I always learn a lot from the participants and it was great to have so much feedback and many insights from the two courses.

Many thanks to Peter Holland for some great promotion of these courses and they seem to have become a permanent fixture of Oxford now.

Here are some of the links I used in this course

And also links from my blogs

Crossing the chasm with the Long Tail

Salt, Pepper and Social networking

The mathematics of Web 2.0

SEO – how to use blogs for social networking

Feedback on the book Cult of the Amateur

Communities are not web 2.0 because talk is cheap

I am not a Tag, I am a number

Mobile web 2.0: AJAX for mobile devices – why mobile AJAX will replace both J2ME and XHTML as the preferred platform for mobile applications development

The Mobile Ajax FAQ

Dick Hardt’s Identity 2.0 presentation

Finally, my book is at Mobile Web 2.0 and forumoxford is at forumoxford(free to join) – chaired by Ajit and Tomi

Of OpenGardens, Walled Gardens, Tim Wu, Net Neutrality, Carterfone and IMS

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Probably my longest article on this blog. I am preparing a pdf version as well!

Introduction

As many of you know Columbia University Professor Tim Wu has written a fascinating article called: Wireless Net Neutrality: Cellular Carterfone on Mobile Networks . If you have not read it already, I very much recommend that you do!

With a blog called ‘OpenGardens’, this topic is clearly of deep interest to me.

However, after reading the article, I have mixed views. The paper does a great job of highlighting the issues we face today, but I also believe that it mistaken on many other issues – and I find my selves taking a stance which is much more neutral.

This article outlines my thoughts on this document.

All comments welcome to ajit.jaokar at futuretext.com.

Particularly, I welcome feedback from Operators – since many in Europe I know are thinking of Opening up the network in some way.

Synopsis of my thinking• Tim Wu’s document does a great job of highlighting the issues. It does an excellent job about raising consumer awareness and I truly hope it drives some thinking at Government and at Operator levels.

• The USA is clearly losing out due to the practises highlighted in the document. However, these practises are not a global trend. Even within the USA, there is a range of behaviour exhibited by Operators. Legislation may not be the only option here – and indeed may not be the best option.

• The whole document is primarily based on the application of Carterfone principle to the Mobile Operators. I believe that the Carterphone principle can be applied to voice but not to data unless certain other conditions are fulfilled first – which I explain below. Thus, it is not a simple case of applying the Carterphone principle to the Mobile Network Operator as is implied

• Oddly enough, the document does not talk of IMS . IMS is a huge buzzword in the industry and addresses the very same issues that are outlined here. I discuss some implications of IMS below.

• In fact, if IMS were to be considered, Skype would be one of the ‘walled gardens’ (since it does not use the SIP protocol – which means it is not Open).

• It is ironic that the Carterphone principle (opening up the Mobile network as envisaged in the document), would benefit the two closest walled gardens – Skype and iPhone. (My previous caveats about applying the Carterphone principle to voice apply in this case)

• The issues highlighted are not ONLY due to the Operator in all cases. For instance, for Mobile Video, the government is an important player(and cause) of the delay in deployment.

• The document does not address net neutrality as I understand it. Thus, net neutrality seems to be a keyword designed to gain some emotional currency

• I totally agree on the discussions about Disclosure. There may be a case for legislation in this sector only i.e. enforcing greater disclosure

• Cooperation and not competition is the key!! In that sense, unless America does some fundamental rethink, it may well lose out in the end because of it’s culture of competing vs. collaborating

My core belief (and potential solution to the issues outlined by Tim) is :

In a consumption driven world, competition is the driving force. In a creation driven world(User generated content, Web 2.0, Mobile Web 2.0 etc), cooperation is the driving force. For reasons I explain below, we have no choice but to accept a diverse ecosystem in the West and legislation is not a good option. Instead, we should look at cooperation and try to identify the dimensions of the stack where we can get critical mass.

Analysis

Verizon: Firstly, let us acknowledge that Verizon is an exception. Much of what they do will be severely limiting in a Web 2.0/Social networking world – simply because Version customers will want to interact with other people (and not just other Verizon customers). Like AOL, Verizon will find out that it can’t maintain a walled garden for ever. Now, having got the issue of Verizon out of the way, let us look at a wider picture

Skype and iPhone: The irony here is – Opening up the network in this way, would benefit two of the closest gardens : i.e. Skype and iPhone

No IMS?: Surprisingly, Tim Wu’s document does not mention IMS at all. This is strange, since IMS is such a huge buzzword in the industry today. IMS also plays directly on the net neutrality issue in the sense either you can view it as a walled garden (at the packet level) or you can consider the disruptive potential of naked SIP (SIP sans IMS). Or, like I do, think that IMS has some unique and powerful features and depending on how IMS is implemented – this can be truly beneficial to the industry.

In any case, what you can’t do is – ignore IMS!

SIP and Skype : If IMS were to be included, Skype does not look that good – because it does not follow an open protocol(SIP).

The Carterfone principle: The whole document is primarily based on the application of Carterfone principle to the Mobile Operators. In my view, The Carterphone principle can be applied to voice but not to data unless the Operator creates APIs (Application Programming Interfaces) first. Carterfone without APIs is practically useless.

We can illustrate this by considering the example of Visual voicemail in iPhones. As a consumer, I love the idea of Visual voicemail. That’s EXACTLY what I want .. I hate trawling through old voicemail(and worse still – remembering keys to go next voicemail etc etc!). So, it’s fantastic to have visual voicemail .. BUT guess what? Supporting visual voicemail implies that the two (device and Carrier) are intimately in bed! Else, it is not possible to provide such a service(because the voicemail is stored on the network and not the device) .

Thus, in a Voice scenario, Carterfone may work – but in a data scenario it will not because to make a useful service(like Visual voicemail), the device needs the network to be abstracted(i.e. API enabled).

Tim Wu’s document misses this critical point.

An API enabled Mobile Operator actually is a very powerful proposition – something which I have been speaking of for some time as in Mobile web 20: Re-engineering the digital ecosystem with converged digital processes in a Post IMS/Quad play world and in The Long tail and Mobile Web 2.0

Thus, it’s certainly not a case of directly applying the Carterfone principle (i.e. Plug and Play) to Mobile Data scenarios.

Carterfone, APIs and Pipes: Note that in the above API enabled scenario, the Operator is still the hub(and not the dumb pipe). The Operator still retains leverage in this situation by managing the APIs

The iPhone : Tim says: >>> Most importantly, to the surprise of many, the iPhone only works on the network of a single carrier, AT&T Wireless. The hundreds of millions of consumers who are not AT&T Wireless customers cannot make use of the iPhone unless they become AT&T customers. The question is, why? Why can’t you just buy a cell phone and use it on any network, like a normal phone? <<<

No No No .. I was not surprised. See my longish post saying ..

The iPhone is extraordinary not because of it’s UI but because it’s the tail wagging the dog ..( But the real question is: How many dogs can it wag?)

In fact, as I said before, the iPhone CANNOT work with multiple Operators with ease because it needs to be in bed with the Operator to give that unique user experience. The client alone cannot deliver that user experience and I use the case of Visual voicemail to indicate why

Locked phones? In light of the above, locked phones are not such a big issue.

Qualcomm/ BREW : One must also not ignore the role of Qualcomm/BREW in this – i.e. Qualcomm by definition leads to a certain ecosystem biased towards a walled garden at all levels(network, apps and so on). Outside that scenario, the Mobile world is a lot more open place.

Mobile TV and Video: Mobile TV and Video is hobbled not by the Operators – but due to a range of other factors(including broadcast spectrum allocations in Europe). Thus, it’s a much more complex issue – with standards wars at technology/broadcast level – not a pure Operator scenario

Developers: When the article talks of developers, the implicit assumption in the document is : you need to be on the carrier portal/deck. However, Operators were never good at marketing mobile applications. In other words, even if you did end up on the deck, it may not translate to sales(excluding simple content such as games etc).

The Operator Portal also degrades the brand of the content/application owner. They are not the destination site. If they were strong or innovative enough, they would not want to be eclipsed by the Operator’s brand and instead would want to promote their own brand. Clearly, the off portal market in the USA is not mature (and this is the real problem i.e. short codes need to be viable and interoperable). In the UK, companies like Yell Mobile , which have good content, are primarily taking the off portal route rather than the Operator route.

Thus, if the service is compelling enough, I would not recommend the Portal route. As a corollary, I think the off portal market in the US needs to improve. That’s a real issue

WAP vs. Full browsers : Yes, WAP was a crippled version of the Web. That’s true. But, in the early days (low bandwidth, low CPU etc), was there an option? i.e. could we have really been able to run full web browsers on mobile devices? Today, as we increasingly see the uptake of full web browsers on Mobile devices from companies such as Nokia and Opera, these vendors are redefining the landscape(and I include Widgets amongst browser technology). This will lead to applications that span the Web and the Mobile Web using technologies like Mobile Ajax, Mobile Widgets and WICD () – making long tail applications possible.

Openmoko : Openmoko has been on my radar. It is interesting. Time will tell. It still needs a network though and I am not sure how that works.

Net neutrality: Defining net neutrality primarily in terms of terms of the Carterphone principle sounds limiting to me?

The mobile network is different and the Mobile network operator is not anonymous : Mobile network operator is not anonymous. In fact they are a (longish!) phone call away. But accessible none the less. Which means – they can be sued. I don’t think this fact can be ignored. For instance, if you get Spam on the Web, there is not a lot you can do. However, if you get Spam on the Mobile web – who do you call? Your Operator. In practise, this fact cant be ignored.

The security risks are also higher due to the personal nature of the device. For example, a child may be using a PC(which may be also be used by an adult). But in case of the child’s phone, it is always being used by the child – hence more risk.

The point of these arguments is: there are genuine reasons to be cautious.

Why change and why now?

In the last few years since I have been tracking this space, why is the idea of opening up Telecoms networks suddenly of interest?

Here is the reason in my view.

Telecoms is a mature industry. Voice revenues still drive a lot of the business. Data revenues are small, indeed non existent. However, Voice revenues are under threat from VOIP – and that’s a universal phenomenon – on both fixed and mobile networks. (albeit on mobile networks today, it is still mainly voice over WiFi).

Also, in most places in the West, the markets are saturated. Thus, growth prospects for voice alone are limited. In contrast to the Web companies, especially with the uptake of Web 2.0, Telecoms is not an attractive investment proposition in light of the (lack of) future growth.

Hence, witness the interest in Fixed to Mobile convergence (fixed operators trying to poach customers from mobile operators and vice versa) and acquisitions in fast growing markets like India. And also an interest in Mobile data for the same reason.

Hence, market forces will drive the change in many part of the world. Other factors also help. Better devices, mature networks, better browser technology etc.

Case for Government intervention?

Tim Wu’s article concludes: “At some point, I think Americans are going to put their foot down and say, ‘We won’t tolerate this anymore.’”

That’s true

The real question is: What could be done and should the government intervene?

In fact, a government mandated environment leading to fantastic rates of growth and innovation does exist today. It’s in South Korea where the Ministry of Information and Communication (South Korea) or MIC Korea plays the overseer role.

But is that the best way? Is that the optimal path in the West?

Think about this, Korea and Japan have made great strides internally but have struggled (and will continue to struggle in my view) to export their Mobile/communications services globally. That’s the dark side of government mandated standards – high internal growth – low global growth.

Thus, excessive government intervention is the wrong thing in my view.

See my blog Should you be thinking of Vegas on your next flight to Tokyo or Seoul? .

Speaking of Governments, ours(UK) did intervene in the dot com boom and reaped a windfall through the 3G spectrum auctions . By saddling the Operators with debt, I believe the British government squashed a golden opportunity for British companies to take a lead in the Wireless space. We definitely don’t want more of that – Thank You!

The Web itself is not exactly free of monopolies. Take the case of Microsoft. However, with my Randian / free market view, I would oppose any regulation on a company like Microsoft. After all, if customers truly hated it, they could change(nothing prevents them from making that choice – much as the same with leaving a specific Operator). With Google applications , that may well happen – but the changes will be market driven and not regulatory.

The search for disruptive elements

The problem with the Mobile industry is: It’s still very arrogant. We talk of concepts like Mobile Youth – but the IPTV industry does not talk of ‘IPTV Youth’ or the fixed line industry of ‘Fixed line youth’.

Once we accept that there are only ‘people’ and they want to communicate irrespective of transport mechanisms – then we have to ask ourselves the question : Where can we get critical mass?

In my view, no single Operator can gain critical mass because the Operator’s subscriber base is fragmented along many dimensions, for instance devices, Pre pay-Post Pay etc.

So, disruptive elements can arise if we unify the stack across Operators along some dimension

At the application level, I believe that Web technologies will do this (especially full web browsers, widgets etc). At a network level, the combination of devices and WiFi/WiMax is the key.

These will happen organically – and we will always have to get used to working in a diverse ecosystem.

Co-operation as a solution

To recap, I believe that :

In a consumption driven world, competition is the driving force. In a creation driven world(User generated content, Web 2.0, Mobile Web 2.0 ), cooperation is the driving force. For reasons I explain previously, we have no choice but to accept a diverse ecosystem in the West and sweeping legislation is not a good option.

In that sense, unless America does some fundamental rethink, it may well lose out in the end because of it’s culture of competing vs. collaborating. In contrast, the European / GSM approach is more collaborative and suited for future growth

To conclude

1) We will continue to live in a diverse ecosystem and that is good

2) Operators will end up with Open APIs and that’s not a Pipe.

3) As we go from a consumption driven ecosystem to a creation driven ecosystem, cooperation will be a driving force and not competition. The need to communicate will overcome outdated business models.

4) Market forces are the main drivers to opening up in Europe(the need to show growth to the investment community for example)

5) In my view, government regulation is the wrong step(except in cases like Disclosure). A combination of Web enabled devices, devices supporting WiFi etc will drive disruptive applications.

PS: In an ironic twist, the March 26 issue of Business week’s best performers – has Google in the top spot. But guess who is on No 7? Yes, Verizon communications!. It indicates to me, that if customers want to leave a service, they will – but they don’t at the moment because they are primarily consuming content.

However, I believe that the future will belong to those Operators who open up because the creation driven ecosystem will demand that (in contrast to the current consumption driven ecosystem)

Image source: Image shack

http://img145.imageshack.us/img145/5388/internet3yc.gif

A note on comments:

I have been having a lot of problems with Spam. Hence, comments are disabled. Please email me at ajit.jaokar at futuretext.com and I shall be happy to post your comments

Mobile web 20: Re-engineering the digital ecosystem with converged digital processes in a Post IMS/Quad play world

Synopsis

In this article, I discuss the impact of changing digital ecosystems and the need to re-think processes from the ground up – especially in the context Quad play convergence post IMS deployments.

Introduction

In the next few weeks, I have two major talks coming up – both in the United States.

One is O Reilly web20expo in San Francisco and the other is my talk at MIT Sloan in Boston .

I always refine my thoughts through discussions either on this blog, or on forumoxford or with the number of people I actually meet as a part of my speaking globally. Hence, I seek your feedback to these ideas. They also give a flavour of my talks at Web 2.0 expo and MIT. Note that, although this article refers to meetings and discussions I have had with a number of companies, the analysis is mine and I have also used insights from other sources and previous blogs.

The central theme of this blog (and also my two talks in the US) pertains to the ‘shifting of digital tectonic plates‘.

Processes change when you are working in a converged world. More importantly, your leverages of power change and consequently the ways you can leverage your assets in a converged digital world also change.

What that means is: We will have to re-engineer/re think our processes to win in this world.

In this article, I focus on Mobile Web 2.0 and the Web, but I will extend this to Quad play in general in future .

It is a recurring theme I encountered last week in three separate meetings – SK Telecom, Infosys and Swisscom.

I spent last Friday as an invitee of Swisscom innovation in Berne (many thanks to Julie Stewart and Dubravka Widmer of Swisscom innovation for hosting me for the day). In an effort to get feedback on my thoughts at Web2expo and MIT, I introduced some of these concepts in my talk at Swisscom on Friday.

If you don’t know already, in general, Swisscom is perceived to be an innovator in the Operator community – in the sense of introducing new concepts to the market. (But NOT according to Mr Schmidt at the reception desk of my hotel in Zurich. When I told him that Swisscom is perceived to be an innovative operator – he went: ‘Innovatif! Swisskom? – nein, nein – ze charge too much .. Wayyy too much’ …)!!

However, leaving aside the objections of Herr Schmidt in Zurich :) .. this was indeed a fascinating day for me. Our meeting room had a wonderful view of the Alps. In typical Swiss fashion, five minutes before the starting time, there was no one in the room and at the exact starting time, the room was full!

Converged Digital processes and a shifting of power structures

It is not every day that you get to interact with most of the major departments of a major European mobile Operator(and uniquely with Swisscom, there is a component of fixed line business as well through Bluewin who were also present).

The talk was broadly about Mobile Web 2.0 but also extending more to ideas of Convergence (a theme more related to my talk at MIT/Sloan). Specifically I was working with ideas which typically span the Web and the Mobile Web domains and the consequent shift in dynamics between the players in such a scenario (we did not have enough time to cover Convergence in it’s fullest sense i.e. Quad play – so this discussion was only about Web and the Mobile Web – but the same principles can be extrapolated to Quad play)

What do I mean by converged business processes and a shifting of power structure?

In a nutshell:

Currently, an Operator’s core asset is voice. I believe that VOIP and other technologies will cannibalise the Voice revenue. This is already happening. Hence, the core assets of a Telco will shift from Voice(current) to others like Identity, Location(which will power location based advertising), customer history(datamining complex customer segmentation) , billing etc. All of these new assets will be ‘sold’ to third parties i.e. independent applications developers through APIs(Application programming Interfaces). Services themselves will be ‘Plug and Play’ and the Operator will be the orchestrator of services(and not a pipe).

Motivations

Of course, this vision is not new. I have spoken about this before such as the Long tail and Mobile Web 2.0 applications, as have others.

When you introduce ideas like VOIP cannibalising Voice revenue in an Operator setting, the audience smiles cynically at you. Of course, they have heard it all before and there are valid counter arguments to say that it not happening in a hurry. Take Fixed VOIP vs. Fixed line revenue. If Chickens little were to be believed, we would ALL be using VOIP ONLY by now. True Skype has had a phenomenal uptake – but the fixed line business has not capitulated as some would have us believe.

So, Operators may not face a near death experience as Kodak faced when the world switched to Digital vision but Kodak continued to see the world with analogue eyes.

Hence, the cynicism to VOIP cannibalisation.

However, the next concept I speak of is definitely a concern in boardrooms across Operators in the West. The slide I use is as below.

city1.JPG

The left hand side shows stock prices of Google, Microsoft and Yahoo. The right hand side shows a ‘City type’ guy with a bowler hat who represents the investment community. The point is: the Web guys have high market valuations because they can demonstrate growth. Yes, Telecoms is a mature business with assured revenues through Voice – but the City/investment community does not see growth – hence poorly performing stock prices and this leads to an investment community sceptical about the potential of the Telecoms industry as it is today.

This is a much more difficult argument to refute. If you still doubt this, think about the acquisition mindsets of Operators from countries with saturated markets who are buying into Operators in less saturated, high growth economies.

That’s buying future growth.

The same logic underpins the interest in FMC(Fixed to Mobile Convergence) in more mature markets – because Mobile Operators hope to get customers from fixed line networks through FMC (and Vice versa). Again a quest for that elusive growth. See my blog about a gedankenexperiment when a fixed to mobile salesman would come calling at your door - (Interesting to talk of Gedankenexperiments in Berne – a town associated with Einstein )

A new ecosystem and a process led approach

Everyone agrees that the current ecosystem is changing. In general, everyone loves ecosystems because they conjure up images of lush green trees. A more worrying image is that of whales and planktons i.e. where in the ecosystem/food chain do you fit(Plankton being the lowest in the food chain)

In previous blogs like the Long tail and Mobile Web 2.0 applications, which I have spoken before and also this one, I outlined a vision of a API(service layer based) ecosystem where the Operator will be the orchestrator of services(and not a pipe).

However, before we get to that, we need to rethink processes. The Web (specifically Web 2.0) has taken the first step in the form of Mashups . The equivalent of Mashups for Operators(both fixed and mobile) implies creating and exposing a service layer with the possibility of creating a digital ecosystem around those APIs.

This is a two step process :

a) First there is the step of dis-aggregation (call it mashups/APIs/service layer etc)

b) Then there is the step of orchestrazition (i.e. creating a new, service led organization from the granular services)

This requires different mindsets and skillsets – for instance domain expertise spanning current silos.

The first steps in this transformation is the deployment of IMS(IP Multimedia Systems) . For most organizations, IMS is about OPEX reduction. Hence, just because you are undertaking an IMS implementation, does not mean that you can win in a fixed to mobile strategy – let alone master Quad play).

The real fun starts AFTER the IMS installation.

For instance, most organizations when asked, ‘What IMS services are they exploring?’ – will mention ‘Video calling’ or ‘Push to talk’. While there is nothing wrong about such applications, they lean towards Henry Ford’s famous horseless carriage analogy i.e. If you think of a new concept in terms of the existing knowledge base, you come up with the ‘faster horse’ instead of the automobile.

In contrast, I think a process driven approach is necessary where processes span the Web and the Mobile Web. For instance, my course at Oxford University on Mobile Web 2.0 and IMS , takes a process driven approach.

The steps involved in this approach are:

a) Understand Business / consumer process i.e. what people or businesses are trying to do

b) Identify the components inovolved

c) Identify the organizations affected

d) Then drill down to the network layer – which may be IMS or other equivalent networking technologies.

e) In it’s widest incarnation, processes are Quad Play, cover both consumer and entreprise and span geographies.

There could be other terminology for the same ideas. For instance, the discussions with SK Telecom about Digital Home, Infosys about ‘making convergece less abstract’ and with Swisscom about Digital ecosystems – all lead to the same process driven priciples spanning existing silos.

The ideas of process re-engineering are also not new. What is new here is – their application to a converged scenario – components of which span companies, technologies and even countries through a service oriented architecture.

In fact, in my previous life prior to 1999, I worked with the professional services division of PeopleSoft(now Oracle). Rethinking your existing processes during an ERP implementation is the norm rather than the exception. For instance, you don’t think of ‘Procurement’ or ‘Payment’ – but rather you think of the whole process from requisition, purchasing, receiving goods and then paying (called Procure to Pay) for example this link on procure to pay (pdf)

I am simply applying the same logic to a Digitally converged ecosystem but across network types and organizations.

Why the ecosystem approach cannot be ignored

This vision is ‘access mechanism agnostic’( i.e. does not matter what network you use – Cellular, Fixed, Wifi or even IPTV, DMB/DVB-H etc).

This is not a comforting thought for organizations whose core asset is their network itself.

For instance, I am not optimistic about Mobile devices in themselves, transforming the world because I believe that convergence will be driven by the Web and not the Mobile Web. Yes, there are billions of devices globally – but the only two things they have in common are Voice and SMS. For most part, neither of these are programmable and that’s the real problem.. The third (in addition to voice and SMS) component that could span mobile devices is the Web. Globally, the Web unites us all and an extension of the Web to the Mobile Web seems logical, inclusive, global and holistic. That’s why I speak so much about Open standards, Web standards etc. I believe that convergence is not an option – it is already happening all around us.

The risk lies in becoming ‘Kodak’ – being caught in rapid digitization driven by players not currently in the value chain

Further, we are not likely to see an emergence of a single entity – like Microsoft – in this new world. So, by definition, this will be working with a complex ecosystem with many players sometimes co-operating, sometimes competing in a global setting.

Conclusions

This is an ongoing discussion and I will continue blogging about it based on feedback. There are no ‘conclusions’ as such and I will evolve these ideas as we go along.

A more pertinent question is: how can an organization win in this ecosystem?

I believe that the answer lies not in a killer application but in a ‘killer ecosystem’ – if that phrase can be used. If we take this line of thinking to it’s logical conclusion, we are talking of a global, flat, process driven organization(or a federation of collaborating organizations) – interlinked at the service layer.

Please contact me at ajit.jaokar at futuretext.com with feedback/questions and / or if you are attending web20 expo

See my book at Mobile Web 2.0

A case for phone book 2.0? Part Two : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

Part One for this article is

A case for phone book 2.0? Part One : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

To recap, the question was

a) Whats the value proposition of FMC(fixed to mobile convergence)

b) Hypothetically, If I get a call from my Operator(O2/Vodafone/T-mobile) etc .. trying to ‘sell’ me FMC – what would it sound like? What exactly are they selling and why? Whats in it for me? cost reduction?

Please read Part One to get a big picture view. Here are my thoughts

a) FMC cannot live by ‘cost savings’ alone! – see what happened to 3G – A network alone cannot make money – you need services

b) Cost savings(or free) is not a business model for Opertors – The city will not accept it, the customers will not trust it and its financially not viable

c) Most Operators are driven to FMC only because they have little choice. The City wants them to increase subscriber numbers. Local markets are saturated. Overseas expansions have not proved profitable or manageable. This is a good reason for the Operator to adopt FMC- but not a compelling enough reason for the customer(yet!)

d) FMC itself is a very limited term. ‘Fixed’ and ‘Mobile’ are not the only two entities(other two being broadband and TV). In fact, Operators promote FMC only because thats the only element that they CAN do so far(for instance my real driver for an upgrade is to get the Discovery Channel – which no Operator really knows!)

e) It also leads to more questions in my mind: i.e. who will win in this game?

f) If you discount price cutting(no pun intended!), then customers need unified services.

g) The phone book discussions here are, to me, an indicator of a simple service which would be useful to me. Shane’s examples of fring show a potentially useful service(to me) – although I dont see the business model for fring

h) If you then extend that idea of a unified phone book, by Jag’s thoughts l(i.e. it is more than a buddy list i.e. should include the Pizza guy, local Chinese takeway etc etc), you have the makings of a potentially useful service.

i) If you extend that idea furthur to the other elements of quadplay, then you need maybe TV listings, song preferences, community to share your media preferences etc. In other words, once you have a list of contacts – and that list spans all networks – then you can build a whole community around that ‘Phone book’ – ofcourse it no longer remains a phone book as such

j) Finally, if you consider what we talk of in Mobile Web 2.0, i.e. the ‘six screens’ – (TV, PC, Cinema, mobile,portable screens such as in cars and planes, information screens like iPod and the ‘mobile phone’) – THEN the same phone book (now holding more than phone numbers) must be accessible from all these screens.

k) The next logical question is – what technology will be used to access this hypothetical phone book at a service level? To me, it is some form of browser – but then I am biased!!

l) Finally, the winner is likely to be the one who can ‘sell’ this phone book to the customer and NOT the one who builds the network. The one who builds the network only sans services risks being Pipe 2.0 smile The entity who builds the phone book will be the commercial winner.

Thoughts?

I have learnt a lot from this thread. Thanks espeicallty to Jag, Shane, Colin, Tomi, Dean, Jim, Peter, David and Kevin

kind rgds

Ajit

A case for phone book 2.0? Part One : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

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A case for phone book 2.0?: FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

This blog comprises a series of two blogs. (If you want to see Part two it is

A case for phone book 2.0? Part Two : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!)

It started off by one of my usual Gedankenexperiment :

If I salesman from my Telecoms Operator(O2/Vodafone/T-mobile) knocks at my door .. trying to ‘sell’ me FMC – what would it sound like? What exactly are they selling and why? What’s in it for me? cost reduction?

Ofcourse, they will not say FMC – not withstanding that Operators tried to sell me WAP :) – so I can’t be too sure of that! (sorry I could not resist that! )

But question remains – as a customer – what exactly am I being sold by the FMC(Fixed to mobile convergence salesman? and what are its benefits?

The first part of this blog relates to the many answers I received at forumoxford alongwith people who contributed. The second part of this blog/article gives my analysis after understanding from these ideas

Here are some insights to the question(What is the value proposition of FMC (fixed to mobile convergence) to the customer?

a) Device convergence – Colin Campbell

It’s not to replace the landline; it’s to converge the device (as I understand it!). I.e. one device for mobile and fixed line use.

There are a number of advantages to having one device:-

The users data i.e. contacts/phone book are always available regardless of which type of communications you are using. (Landline or cellular)

End user experience is much more consistent.

The service provider/device manufacturer potentially gets more opportunity to control a bigger chunk of the end user experience. I.e. home and mobile.

The mobile operator is seeing a revenue stream from the home which they didn’t have before.

Also the device manufacturers can build in a wider range of subsidiary capabilities i.e. a set of applications targetted at the home environment, and some targetted at the roaming cellular environment. So they get two chances to up sell the device. egg. you could put applications on your mobile phone which integrate with your games console or set top box.

b) FMC is not necessarily about “converged devices”, nor is necessarily about dual-mode WiFi/cellular phones. It is a catch-all term, the definition of which depends on who is speaking.

Dean Bubley

It could include fixed+mobile bundling of the type done by numerous operators, perhaps including “closed user groups” of 1 fixed + 3 mobile numbers for free intrafamily calling.

It could be a mobile operator selling you a broadband connection, perhaps with a PC softphone client sharing the same number (and services, eg SMS), to your mobile, enabling you to take mobile calls via VoIP on your PC while travelling.

It could be a mobile operator providing you with a broadband-connected femtocell base station to give you better 3G coverage at home.

It could be a combined fixed & mobile operator (and these days, there are few “pure” mobile operators about) offering a way to link gamers on mobiles, PCs and consoles. Or watching a video clip on your phone, and then pushing the complete movie down to your HDTV/set-top-box server.

Some users will want one devices, others will want five. Some users will want 1 number or identity, others will want multiple. FMC is a convenient catch-all term which encompasses many of these capabilities.

So… overall “value proposition” will be a mix of:

* Cheaper calls, or at least different types of tariff structure

* Better indoor coverage (especially 3G, which is lousy at 2.1GHz)

* As much convergence or divergence of devices, numbers, bills as appropriate for your needs

* Assorted clever ideas for multi-access content / entertainment services

* Bundling and hence perhaps lower total cost to the consumer vs. less churn for the operator

c) Brand convergence: What level of convergence have they reached: Kevin Evans

Yes, it depends on who is talking and if they’re an operator to what ‘level’ of convergence they’ve reached. For example, convergence can mean:

* Brand convergence – one company offering multiple services, yet services remain more or less separate. Can be a reseller arrangement.

* Billing convergence – one bill

* Customer care convergence – one number to call

* Device convergence (or divergence – agreeing with Dean)

* Network convergence – one network (but Convergence at different OSI layers is possible further complicating things)

Convergence is an evolution and the end goal depends on the company’s strategy.

My view is, by and large, FMC in the short term and perhaps even medium term is at the first stage – brand convergence.

Voda and O2′s broadband aspirations are at this stage. Even NTL with Virgin Mobile is merely converged branding at the moment but this will change quickly when they complete the merger and integration. BT by contrast is a real leader in the FMC race. They’re at device convergence with Fusion and 21CN will take BT all the way to network convergence.

As FMC becomes vital to survival and everyone “is doing it”, I suspect the industry will split with some operators becoming converged network operators selling wholesale and retail telecoms services (this is where BT is headed) while others become more service brands.

d) Importance of presence: Shane Williamson

I concur with you on Presence as it is a key factor moving forward, but it needs to be converged with the online world too.

The problem with mobile today is it is still disconnected in a lot ways due to carrier control. So, there isn’t a huge rush by carriers to implement products and services that allow users to easily churn (particularly in Australia).

Presence is paramount as it is the key driver for services such as IM use & online gaming in the online world. People can see or be notified that the person they want to chat with is available. This needs to extend seamlessly into the mobile world too. Presence needs to bring disparate services together too, like the calendar on my business desktop synchronises with the mobiles services so when people call, my calendar shares this data with the voice-mail system and it changes the message to state I’m in a meeting. It then states I’m in the meeting until a specific time giving the caller the ability to choose how to then contact me.

Presence is also about using the right service at the right time, for instance the presence system would switch over to a cheaper RF network if it is available, automatically activating products that can now take advantage of this new connection type. Like VoIp when in a WiFi hot-spot.

I was involved with putting forward a project whilst at Hutchison here in Australia a couple of years back for centralising mobile contact details with a 3rd party company’s online service. The project was blocked as some senior managers were concerned such a service would allow customers to easily churn. They looked toward a more “stickier” solution for contact backup instead.

We are in a connected world now, so Islands of separated data and services must end. People should have 1 set of contacts, calendar, buddy lists, photo/music/video albums, personal/business files, digital rights management licences etc that are transparent across multiple devices and services.

I look forward to seamless roaming of data and services from my mobile world to my online (TV & PC) realms. Great to see we are getting there albeit slowly.

d) Enterprise segment Tomi Ahonen:

I think the most attractive proposition in FMC is the business customer (enterprise customer) segment.

I think the most attractive proposition in FMC is the business customer (enterprise customer) segment. There are a lot of workers who are explicitly “unmobile”. We want them to sit at their desks 8 hours a day (eg calling centre staff) or their work necessitates them to do most of their work at the desk (eg typical design and programming work).

For these, it makes sense to combine their computer systems with voice (typically VoIP) and then can give some gains from wirelessness (eg WiFi) and we can bundle cellular (mobile phone) benefits to it. Here is where I see the big future of FMC. In the home it is a lost cause, as nobody wants to own the home phone as we all have our mobile phones, and we know if the home phone rings, it is “not for me”.

Oh, and Ajit – in Finland already today there are more broadband connections than fixed landlines, so yes, broadband without a fixed line is a reality today already, starting with the cable modems obviously…

e) I think what the consumer wants is clarity, value and simplicity. And that means marketing the message is critical David Cushman

The services being offered become easily confused (do I want free internet calls from BT when I have skype?). Do I want ‘reduced cost’ capped broadband when you are about to offer me TV on demand?

Dean’s point about a mix is critical, and it’s not what is typically on offer.

Tomi will tell you how little people will want one converged device unless everyone in the household can have a personalised one each.

And, of course, the personalisation issue disappears in a work-at-your-desk environment.

I think what the consumer wants is clarity, value and simplicity. And that means marketing the message is critical.

e) Product bundling Jag Minhas

And herein lies some of the answer; it’s unlikely that the industry term “FMC” would ever be “sold” to you at all. Rather, you being a customer of Sky, the call centre at Sky would call you and try sell you broadband. The proposition would be something like “if you buy our XYZ package” and you contract to it for “X” months then we can give you broadband for “£Y” (or free)”

And so there are many variations on theme involving telephone, TV, Internet etc. Product bundling is a great way of increasing spend, but without necessarily corresponding to value of all the components in the mix. For example, if you buy Microsoft Office, you get quite a few things in the bundle, but you might not value all of them. You will pay for the bundle because you think it’s worth it as a whole rather than the sum of it’s parts, even though you are just after the parts.

f) The vendor needs to know the most important piece for me. In other words, they need to know my preference” Peter Cranstone:

“I think to ‘sell’ me the service, the vendor needs to know the most important piece for me. In other words, they need to know my preference”

It’s all about “Me”. Who am I (my preferences), What are my current device capabilities and Where am I.

If I give the vendor access to that information everytime I log on to their web site they can sell me an incredible service. However without “Me” data as Ajit says, it doesn’t go anywhere. It’s simply to hard to continually type in this data on a dynamic basis. It has to be transparent to both the customer and the content/service vendor.

g) Jim O Reilly : Template driven Mobile RSS If you look at it from the mobile 2.0 aspect where you are getting your mobile RSS feed and other server/broadcast/Fixed/ISP content into your mobile client via browser or idle screen (e.g. like Intromobile Dynamic Communications Convergence solutions) then this is combined with the user driven template choices (available in handset or via browser) where customers choose exactly what type of content elements or packages they would like to see (customised by Operator) and in which part of the screen that they prefer then you have the link between what is being served and what you are interested in . Thus linking tradionally Fixed and Mobile content choices . Trust that makes sense.

h) Cheaper calls/product bundles Jag Minhas : But there are certain things that operators *do* know about customers very well – and that is that they like lower prices for the services that they use. e.g. cheaper calling. Give a customer a way to get cheaper calling (or even free calling) and I’m sure every customer would take it. smile

Doing cheaper calling as part of a product bundle might allow operators to get something back in return. A similar concept could apply to Internet access, TV etc.

By the way, have you studied the way that the Sky TV (TV-only) package bundles work? The product range is structured and cleverly optimised to encourage you to spend a lot in order to get at the relatively small bit you really value. I can speak from experience here myself. In fact it’s even worse for me – I pay a lot of money every month to Sky, and I only end up watching BBC News 24 most of the time – which as you know is “Free To Air”. Why am such a mug to do this? Why haven’t I cancelled my Sky subscription?

You know why? I can’t bring myself to doing it because of just in case there comes a day when I wish to watch Discovery ….

i) One device to rule them all (plus cash savings) Colin Campbell

Having now signed up for a no strings attached VoIP service which offers me free calls till end of March I can testify the value proposition for the consumer is raw cash savings. Throw in the fact that it seems to work seamlessly as I drift in and out of the WiFi zone with my favourite ‘cellphone’ (Nokia E61) and it seems there is the potential for major changes in the value chain.

In the last two days I’ve consigned the house fixed line and the Skype application to the archives! (excepting presence and IM from Skype).

Excellent voice quality, seamless user experience, one device, one phone book, free calls. That’s a hell of a proposition.

Ok. so free calls will not last forever, but everyone is entitled to some payment for providing a service. Even SIP VoIP service providers have to eat.

Its only two years since I adopted Skype. This shows to me the pace of change. How may revolutions can a man take in lifetime!

In 20 years in this country (UK) we have gone from a government institution (Post Office) running a bunch of copper cable, and taking 6 weeks to install a new connection, through a blue Mercury button mysteriously appearing on your fixed line phone which offered a marginal discount on long distance calls, to where we are now with a fistfull of service providers, hungry for business, offering me calls across the globe to almost 2 billion other subscribers for next to no cash.

That’s the value proposition. And that’s why this will have a massive impact, and why mobile and fixed line is one business that’s big business for the guys who build that loyal customer base.

And perhaps the most beautiful thing about it all is that its all running over the same copper we had twenty years ago. That’s magic!

(no pavements were harmed in the making of this movie!)

j) Free calling + unified phone book: Jag Minhas

I agree with you 100%. Free calling is something that people value. You don’t need sophisticated customer behaviour modelling to determine this. And quite frankly, you don’t need FMC,

… or VoIP

… or Skype

… or JahaJah

… or Truphone

… or whatever. You just need free (or cheaper) calls.

And if you can do all this from your mobile phone (which contains all the phone book that you have so carefully pruned over many years) then even better!

k) Who needs a phone book on the phone Shane Williamson

Check out Fring it access directly your Skype & Google talk directories on your mobile.

l) Phone books: by Jag Minhas

You have a point re phone book cf Skype and Google Talk, but the phone book is a long way off from being substituted by Skype/Google/Windows-Live buddy lists, and that is because:

1) E.164 identities (phone numbers) are not closed to any particular community. They are “open” in the sense that you can give anyone your phone number and you know that they can a) call you, b) message you, and c) refer to you using whatever friendly name they wish.

2) You can call or message someone using their phone number even if they are not present.

3) Buddy lists are usually built up over time from a series of person-to-person, relatively “intimate” relationships, either personal or professional relationships. Mobile phone-books often contain entries for “taxi”, “pizza”, “Chinese takeaway” etc.

I touched upon this topic, and the whole issue of presence etc. in a keynote presentation I gave to Mobile Instant Messaging conference in London in November. You can view the slides here: http://www.slideshare.net/route79/mobile-instant-messaging/1

Part two it is

A case for phone book 2.0? Part Two : FMC (Fixed to mobile convergence) cannot live by ‘cost savings’ alone!

Addendum: Mobile Web 2.0/IMS/User Generated Content/Mobile Network Operators training course ..

Here are some addendums to the previous post on Mobile Web 2.0 and IMS

Many thanks to Tony Kypreos – Executive Vice President of T-mobile and course attendee last week (Web 2.0 and User Generated Content training course at Oxford University) for his help and feedback in creating this addendum

All the below in context of IMS/IP/Web 2.0/Mobile Web 2.0

Cross functional appeal for an organization (Marketing/Sales/Customer service/finance/legal)

Cross industry:

Media Companies – impact of User generated content and Long tail

Telco -

Impact on own network,

a) Product development cycles (no longer sequential and silo big scale no iterative, testing and pilots. New services no longer siloed products – mash-up of products to make new services. Fail early and small to learn from customer feedback to succeed big.)

b) Business cases (current approach is not flexible enough to take advantage of fast moving world of User Generated Content),

Legal (much wider reaching and grey areas of collaboration rather than typical vendor buyer),

marketing (understanding of new social trends and competitive threats), service (new ways of servicing more demanding customers)

c) Brands – how can brands develop better interaction and achieve wider reach e.g. via mobile?

d) Consumer trends – how are consumer social trends fuelling the web 2.0 evolution and what are the implications of this to Telco and Media companies?

including Personalisation, Productivity (how web 2.0 is increasing effectiveness (e.g. WebTop applications)), Participation (no longer passive consumers but adding to the community (e.g. myspace))

Mobile Web 2.0/IMS/User Generated Content/Mobile Network Operators training course ..

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Hello all

I seek your thoughts on this concept .

What would you add/remove from a course like this? (mainly pitched to Operators)

As many of you know, last week, I conducted my first ever course at Oxford University on Web 2.0 and User Generated content.

It was good to meet some forumoxford members there but also good to meet BBC, MTV and T-mobile

I am now doing one more course oriented towards Mobile Web 2.0 and IMS i.e. looking at User Generated Content from a telecoms / infrastructure perspective

The course will have a dual perspective. It will approach Web 2.0 from the user perspective and also from the IMS standpoint. It will cover the basics of IMS and will then discuss how IMS would apply in a user generated content / Web 2.0 world

It would cover

• Understanding Web 2.0

• What is Mobile Web 2.0

• Significance of User generated content

• Content types: Movies, music, podcasting etc

• Business models and revenue streams

• Threats and opportunities: legal, social, trust, copyright etc

• The principles of Mobile Web 2.0

• The role of IMS in Mobile Web 2.0

• Seamless / Converged Web 2.0 services in context of IMS

• Threats and strategies for Telecoms operators from Web 2.0 companies

• Services

• IMS, OpenGardens and Web 2.0 – A competitive advantage

• Golden bit pipes

• Is IMS necessary for Web 2.0 services?

• IMS, Web 2.0 and third party APIs

• QOS

• DRM

• Privacy

• Security

• Context/Presence

• Consumer vs. Enterprise

Any one interested in details of this course, please email me at ajit.jaokar at futuretext.com.

I may be able to give you an early discount to this course

Image source: http://www.tmcnet.com/voip/0205/IMS-fig1.gif

Mobile web 2.0: Web 2.0 and its impact on the mobility and digital convergence (Part one of three)

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Mobile web 2.0: Web 2.0 and its impact on the mobility and digital convergence (Part one of three)

By Ajit Jaokar (Ajit.jaokar at futuretext.com)

Introduction and Objectives

This is a series of three articles – the first(this one) outlining the significance of web 2.0 technologies , the second article discussing the impact of web 2.0 technologies on mobility and the final article on the impact of web 2.0 technologies on digital convergence.

If you are already familiar with web 2.0, my goal, in a nutshell (no pun intended!) is to extend Tim O Reilly’s seven principles

to mobility and digital convergence.

Thus, I will not attempt to add to the body of knowledge in terms of basic web 2.0 concepts themselves. I would rather prefer to build on some of the excellent work done on the subject from folk such as Tim O Reilly , Richard Mc Manus and others. I will use their work as a background and extrapolate the basic web 2.0 principles to mobility and digital convergence (areas which I am more familiar with).

My approach will be to ask a series of questions based on my understanding of web 2.0 and mobility. I also welcome your questions. In the two following parts of this paper, I will seek to answer them. Also, if you are a company doing some interesting work in this space, please email me on the address above.

A bit about me

I live in London (England) and am the CEO of a publishing company futuretext.

I wrote a book called OpenGardens advocating openness in the mobile data industry. I also chair Oxford university’s next generation mobile applications panel. In 2006, I am commencing a PhD on IMS (IP Multimedia Systems). If you have an interest in IMS, please contact me to keep in touch. My blog is at OpenGardensBlog

Some definitions

A few quick definitions before we start – just to be sure we have the same frame of reference.

Mobile vs. wireless: In Europe, the commonly used phrase for Telecoms data applications is ‘Mobile’. In USA, it is ‘wireless’ or ‘cellular’. In this article, ‘Wireless’ simply implies connection without wires. Mobility or ‘Mobile’ on the other hand describes a whole new class of applications which permit us to interact and transact seamlessly when the user is on the move ‘anywhere, anytime’. Hence, I use the term ‘Mobile’ independent of access technology i.e. 3G, wireless LANs, wimax, wibro, Bluetooth etc.

Mobile Internet: ‘Mobile IP data service’. It is not ‘Internet on the Mobile device’ since mobility also includes other elements such as ‘messaging’ i.e. non-browsing modes of access.

The mobile data industry: The ‘data’ i.e. non-voice side of telecoms. The telecoms operators are an important part of the mobile data industry.

Web 2.0

Within the mobile data industry, ‘openness’ is still an alien concept. I wrote a book called OpenGardens alongwith Tony Fish which advocated openness in the mobile data industry (OpenGardens is the philosophical opposite of ‘walled gardens’).

When I talk to senior telecoms people about ‘OpenGardens’ – they are still hung about ‘on portal’ or ‘off portal’. Further, most cannot see beyond the traditional ‘song and dance’ applications (ringtones/wall papers etc).

In contrast, I find web 2.0 concepts refreshingly intuitive and they formalise many things which we know and use. For example – in OpenGardens, we talked about an application called ‘Splash messaging’ also called air graffiti or spatial messaging.

Contrast this with a very different type of application called ‘splash messaging/air graffiti/spatial messaging’. In its simplest case, it’s the ability to ‘pin’ digital ‘post it notes’ at any physical point. Suppose you were at a holiday destination and you took a picture or a video of that location. You then ‘posted’ that note digitally with your comments and made it accessible to your ‘friends’. Many years later, one of your friends happened to come to that same place and as she walked to the venue, a message would pop up on her device with your notes, picture and comments.

The Splash messaging application is a ‘mashup’ of many different feeds (for example a location feed and a mapping feed) and it has other features like user created content. Its characteristics are very similar to a web 2.0 service.

So, coming back to my question, what’s web 2.0 and how does it apply to the mobile data industry?

Background

There appear to be two early origin points for web 2.0

Firstly, a business week article:

It’s A Whole New Web And this time around it will be built by you

and secondly .. a conference ( web 2.0 conference created by a discussion between O’Reilly publications and MediaLive International (a technology conference company – if you want to put a label around it)

Currently, there is a lot of hype around web 2.0. But also a lot of cynicism. Predictably, the VCs are excited

Like the web 1.0 – It even has a ‘bible book’ as we had the cluetrain manifesto for web 1.0

For web 2.0 it is Design Patterns: Elements of Reusable Object-Oriented Software (Addison-Wesley Professional Computing Series) (Hardcover)

And finally .. it has an odd ‘new agey’ feeling to it .. with words like ‘collective intelligence’, feng shui and morality being bandied about in the context of web 2.0 -

Starting with Nicholas Carr’s The amorality of web 2.0

And Kevin Kelly’s we are the web

and finally .. Tim o Reilly’s response to Nicholas Carr’s article at

Some questions to think about

The mobile device has the potential to act as a significant reporter of data rather than a mere consumer of data. The Web 2.0 / mobility interplay needs more thought. Consider principle two from the list of seven principles (harnessing collective intelligence).

Functionally, we must be able to –

a) collect intelligence unique to being ‘mobile’

b) share that knowledge

c) enable others to comment on that knowledge

d) Ensure that the enhanced body of knowledge so created can be shared with the community.

This leads to more questions – What type of information can we collect when we are mobile(location, pictures(MMS)), How can it be shared?, How can it be enhanced?

Some initial questions which come to my mind:

1) If a web 2.0 service is treated as an amalgamation of data and enabling software, which data elements are unique to mobility (for example location feeds)?

2) How are these data elements captured?

3) What are the pitfalls associated with accessing(sharing) these data sources

4) Will the mobile web 2.0 be seamless as we all hope? If not, what are the options and choke points in extending web 2.0 ‘anywhere anytime’?

5) The impact of IMS. As per wikipedia

The aim of IMS is not only to provide new services but all the services, current and future, that the Internet provides. In addition, users have to be able to execute all their services when roaming as well as from their home networks. To achieve these goals, IMS uses open standard IP protocols, defined by the IETF. So, a multimedia session between 2 IMS users, between an IMS user and a user on the Internet, and between 2 users on the Internet is established using exactly the same protocol. Moreover, the interfaces for service developers are also based on IP protocols. This is why IMS truly merges the Internet with the cellular world; it uses cellular technologies to provide ubiquitous access and Internet technologies to provide appealing services.(By the way, IMS is the topic I am looking to commence my PhD in this year.)

6) How does the network effect work within the mobile data industry ?

7) How does network effect work in terms of user contributions(i.e. can small contributions created by users be shared easily across to the larger body of users) ?

8) What are the examples of harnessing collective intelligence / peer production on the mobile data industry ?

9) Contrasting the iPod/itunes models with other models of sharing data in the mobile data industry

10) Which companies are leading the way in this space ?

11) How will search be affected by ‘anywhere/anytime’ ?

12) Airwaves are not free i.e. there is a cost of transmission over the air through a telecoms network. Will that impact the wider deployment of web 2.0?

13) Impact of dual mode phones(WiFi and 3G phones)

14) IP /IMS does not mean ‘open’. Does openness matter ? If information can be accessed via a browser(and initiatives like the t-mobile web-n-walk initiative are already under way http://digital-lifestyles.info/display_page.asp?section=cm&id=2658 ) – what’s the impact of the ‘walled gardens’ ?

15) What type of data can be captured on a mobile device(music, video, images) and how can it be enhanced(tagged, shared etc) ?

16) What services can be mixed and what new services can be created ? Any examples of these?(citizen’s reporting, real time traffic monitoring are obvious examples)

and so on …

To understand web 2.0, I am going to mainly use Tim O Reilly’s original article alongwith other references from the web as linked.

The seven core principles of web 2.0 revised

As I understand them, according to the article, a web 2.0 service should have as many of the following seven core characteristics as possible. I have outlined these principles partly as a foundation for subsequent discussions but also for my own clarification. Please refer the original link as above for more details.

1. The Web As Platform

Software as a service is data plus software:

A web 2.0 service is a combination of software and data. The term ‘web as a platform’ is not new. Netscape used this term first but the Netscape application (i.e. browser) was created in context of the existing ecosystem (‘WebTop’ instead of ‘desktop’ mirroring the famous ‘horseless carriage’ analogy). While Netscape was still ‘software’ – in contrast, Google is software plus a database. Individually, the software and the database are of limited value – but together they create a new type of service. In this context, the value of the software lies in being able to manage the (vast amounts of) data. The better it can do it, the more valuable the software becomes.

Harnessing the ‘long tail’: The term ‘long tail’ refers to the vast number of small sites that make up the web as opposed to the few ‘important’ sites. This is illustrated by the ‘double-click vs. adsense/overture’ example. The DoubleClick business model was not based on harnessing the vast number of small sites. In contrast, it relied on serving the needs of a few large sites (generally dictated by the media/advertising industry). In fact, their business model actively discouraged small sites(through mechanisms like formal sales contracts). In contrast, anyone can set up an adsense/overture account easily. This makes it easier for the vast number of sites(long tail) to use the service(ad sense/overture).

In general, Web 2.0 systems are geared to harness the power of a large number of casual users who often contribute data implicitly as opposed to a small number of users who contribute explicitly. Tags are an example of implicit contribution. Thus, the web 2.0 service must be geared to capturing ‘many implicit/metadata contributions from a large number of users’ and not a small number of contributions from a few ‘expert’ users.

2. Harnessing Collective Intelligence

In this context, collective intelligence can mean many things

- Yahoo as an aggregation of links

- Google page mark

- Blogging

- Tagging and collective categorisation for example flickr and del.icio.us

- Ebay buyers and sellers

- Amazon reviews

- Wikipedia

And so on ..

All of the above are metadata/content created by users that collectively adds value to the service(which as we have seen before is a combination of the software and the data).

Harnessing the collective intelligence involves understanding some other aspects like peer production, the wisdom of crowds and the network effect.

Peer production as defined by the professor Yochai Benkler’s seminal paper peer production . A concise definition from wikipedia is a new model of economic production, different from both markets and firms, in which the creative energy of large numbers of people is coordinated (usually with the aid of the internet) into large, meaningful projects, largely without traditional hierarchical organization or financial compensation.

The wisdom of crowds – as discussed in the book wisdom of crowds by James Surowiecki whose central idea is that large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.

And finally, network effects from user contributions. In other words, the ability for users to add value (knowledge) easily and then the ability for their contributions to flow seamlessly across the whole community – thereby enriching the whole body of knowledge. A collective brain/intelligence of the blogosphehe if you will – made possible by RSS. A living, dynamic entity not controlled by a single entity.

3. Data is the Next Intel Inside

We have seen previously that a web 2.0 service combines function(software) and data(which is managed by the software). Web 2.0 services inevitably have a body of data (Amazon reviews, eBay products and sellers, Google links) Thus, it’s very different to a word processor for example – where we are selling only software (and no data).

Data is the key differentiator. In most cases, the company serving the data (for example Google) also ‘owns’ the data (for example information about links). However, that may not always be the case. In case of Google maps , Google does not own the data. Mapping data is often owned by companies such as NavTech and satellite imagery data is owned by companies like Digital Globe. Google maps combine data from these two sources(at least).

Taking the ‘chain of data’ further, sites like housing maps are a mashup between Google maps and craigslist. The more difficult it is to create the data, the more valuable it is(for example satellite images are valuable). In cases where data which is relatively easy to create, the company providing the most useful service and hitting critical mass will be valuable.

4. End of the Software Release Cycle

Web 2.0 services do not have a software release cycle. While Google reindexes its link indices every day, Microsoft releases a major software release every few years. That’s because there is no ‘data’ in windows 95, windows XP etc. It’s pure software. Not so with Google. Google is data plus software. It has to reindex its ‘data’ every day else it loses its value. Thus, operations are critical to a web 2.0 company. There is no ‘release’ as such. The flip side of this coin is – there are widespread beta releases and users are treated as co-developers.

5. Lightweight Programming Models

Distributed applications have always been complex to design. However, distributed applications are central to the web. Web services were deemed to be the mechanism to create distributed applications easily. But web services, in their full incarnation using the SOAP stack, are relatively complex. RSS is a simpler(and quicker) way to achieve much of the functionality of web services.

Simpler technologies like RSS and AJAX are the driving force behind web 2.0 services as opposed to the full fledged webservices stack using mechanisms like SOAP. These technologies are designed to syndicate rather than orchestrate(one of the goals of web services). They are thus opposite to the traditional corporate mindset of controlling access to data. They are also designed for reuse. Reuse in the sense of reusing the service and not the data(i.e. they make it easier to remix the service).

Finally, innovation becomes a case of mixing (cobbling together) services existing services – something which we talked about in OpenGardens in the mobile context.

6. Software Above the Level of a Single Device

The sixth principle i.e. ‘Software above the level of a single device’ – is an obvious staring point when we think of the impact of web 2.0 on mobility and telecoms. At one level, the whole of the ‘new’ web should be transparent and accessible across any device. Indeed a browser is the least common denominator in all mobile data devices – and that’s a sobering thought. But there is more to the sixth principle than merely access via the browser.

iTunes leverages data(music) through the service and provides some data management/metadata functions. The mobile device has the potential to act as a significant reporter of data rather than a mere consumer of data. This data, like all web 2.0 services, may be implicit or explicit. This point will be a significant area for discussion in the next two articles.

7. Rich User Experiences

While mechanisms like RSS are being used to syndicate the content of web sites out to a much wider audience, the user experience at the client itself is undergoing a dramatic improvement. The collection of technologies driving this enhanced user experience is Ajax popularised by Jesse James Garrett in the AJAX essay

AJAX is being used in services like gmail, Google maps and Flickr and it already provides the technology to create a seamless user experience combing many discrete services. The impact of RSS and AJAX is to create a service spanning content from many sites. To the user, this is a single, transparent experience. Effectively, content is being freed from its original container. Instead of the user going to the content(as in a user navigating to a web site), the content is going to the user(through RSS). Technologies like AJAX are making it easier for users to create the glue which binds the various content sources(RSS) together.

Conclusion to part One

This article laid the groundwork for the next two articles. It was an introduction to web 2.0 and a series of initial questions which came to my mind when discussing the interplay between web 2.0 and mobility. My objectives, as I have stated, are to extend Tim’s seven principles to mobility and digital convergence. I welcome your comments and questions and I shall answer them in the next two sections of this article.

Many thanks.

Ajit Jaokar

www.opengardensblog.futuretext.com

Ajit.jaokar at futuretext.com

References

http://www.roughtype.com/archives/2005/10/the_amorality_o.php

http://webservices.sys-con.com/read/161874_p.htm

http://www.wired.com/news/technology/0,1282,69114,00.html

http://web2.wsj2.com/web2ishere.htm

http://web2.wsj2.com/the_best_web_20_software_of_2005.htm

http://radar.oreilly.com/archives/2005/10/the_amorality_of_web_20.html

http://digital-web.com/articles/web_2_for_designers/

http://www.adambosworth.net/archives/000031.html

Image source: http://en.wikipedia.org/wiki/Image:Web20_en.png

Permanent link: http://opengardensblog.futuretext.com/archives/2005/12/mobile_web_20_w.html