telco adoption of web 2.0 & open innovation issue 1

1© 2008 Alan Quayle

Alan QuayleBusiness and Service Development

www.alanquayle.comwww.alanquayle.com/blog

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TELCO ADOPTION OF WEB 2.0 PRINCIPLES AND OPEN INNOVATION FOR RAPID

APPLICATION DEVELOPMENT


What’s Changed?

Action PlanDeveloper Needs

Who’s Really Doing What?


What’s Changed?


Re-Launch

An Operators Product Development Process

Opportunity Identified

18-36 months

Market Research

Find Budget

New product development processLaunch

12-18 months


What’s Changed?

Expectations


What customers expect

6-12 months

Weekly

18-36 months

4 months


Where is the Money?

• The collective market capitalization of web-based service providers such as Google, Amazon Web Services, Facebook, My Space, etc. is significant

• Google alone has a larger capitalization than the majority of Tier 1 Communication Service Providers in the world today– Google’s market cap is larger than those of Comcast,

Verizon, Telefonica, China Telecom, China Netcom, NTT DoCoMo, NTT, Hutchison Whampoa and Deutsche Telekom, etc.

– Google is 10 years old (founded in 1998), and none of these service providers existed prior to 1994

• The capital that has flowed to them has been diverted from incumbent communication service providers

http://www.forbes.com/lists/2007/18/biz_07forbes2000_The-Global-2000_MktVal.html

$270Billion


RetailStores

SubsidizedPhones

NetworkControl

EcosystemControl

CustomerRelationship

Brand

BillingRelationship


Who’s Really Doing What?


Operator Activities in Opening the Network

• Telenor Content Provider Access (CPA) – Generate within Norway roughly $100m a year in revenue, that is

6% of Telenor’s total subscription revenues.

• O2 Litmus (www.O2litmus.co.uk) – Recently announced by O2, to be launched in late 2008,

extensively leveraging web 2.0 principles.

• Telecom Italia NexTIM– Telecom Italia’s web 2.0 site exposing new services to its early

adopting ‘360 degree innovators.’ Letting the market decide what services to launch, rather than solely internal product management processes.

• SingTel Partners Program– Leverage external 3rd party developers to tap into their potential

of unlimited innovation to drive new revenues. Promote access tolimited network resources and capabilities; reduce time-to-market for launching new services and provide mechanisms for 3rd parties to be paid.

• ProgrammableWeb– An aggregator of APIs across operators and the internet, including

Orange Partners and BT’s 21C APIs.


Operator Activities in Opening the Network

• Orange Partner– As a simple case study, it took only seven months from Orange’s

first meeting with a developer called mob-it (www.mob-it.com) to launch a public beta of that service integrated into Orange’s picture service Pikeo, using its open APIs.

• Verizon Open Development Initiative – Verizon’s ODI (Open Developers Initiative)– Device centric ODIS (Open Device Interface Specification) defines

what a device must do to interface to the VZ RAN (between the device radio hardware and the access network)

• Sprint’s Business Mobility Framwork– Sprint’s Business Mobility Framework launched in 2004. It

enables third parties to develop services using capabilities of the Sprint network, such as location, presence and messaging. It is based on Parlay X.

• And many more:– AT&T’s devCentral, GSMA 3rd Party Access Initiative, BT, Telus


Developers’ Needs


Background on Research

• Results collated from over one year of market research• From a maintained list of over 1000 web/voice/telco 2.0 application developers

130 developer’s feedback is included in these results covering:– Detailed questionnaires (40+ open-ended questions)– Face-to-face meetings (1-2 hours, structured)– Phone interviews (30min – 1 hour, structured)

• Representative Application Developer mix

CommunityVoice 2.0

Web 2.0

Games / adver-gaming

LBS Content / Search

UGC

Enterprise

eInclusion

Canada

US

UK / IrelandSingapore /

APAC

Rest of Europe

Company Name DescripitionContext Based Business Social Financial

Enter- tainment Voice 2.0 Telco 2.0 Viable Cool

Telco Value

23half MMS visual search X X X 3 5 5AirG Mobile Community (20M+) X X 5 5 3Axis Remote survillance solutions X 4 4 5Blinkx Video sharing site X X 3 5 5Bluefire security mobile security X X 4 4 5Credant mobile security X X 4 4 5Dexterra Enterprise application mobilization X X X 4 4 5Diversinet Mobile security X X 4 4 5GreyStripe Ad supported gaming X X 3 5 5Integra5 Converged services platform X X X X X 5 3 5Kore Wireless M2M solution provider X 5 4 4Krillion Mobile shopping - location based X X 3 5 5Livewire mobile Music centric mobile application developer and infra X X 5 3 5Mint Personal money management X 4 5 4NewBay Mobile UGC sharing X 4 5 4Spinvox Voicemail to text X X X 5 4 4Movial Social communicator tool (mobile/PC) X 3 5 5Trust Digital Mobile security X X 4 4 5U-Locate location application company X X 4 5 4Useful Networks Location application company X X 4 4 5Utterz Voice based social publishing / network X X X 3 5 5Veoh TV 2.0 X 4 5 4Voxmobili Next generation address book X X X 4 4 5Wavemarket LBS, family finder X 4 4 5Way Systems Mobile POS X 4 4 5Evryx SnapNow mobile marketing platform X 3 4 52waytraffic Digital content / games publisher (Sony trying to buy) X 5 4 33Bill Mobile payment services X 3 4 5Adomo Enterprise UC X 4 4 4Agito Enterprise application mobilization X 3 4 5Angel.com Hosted IVR / Voice 2.0 X X 4 4 4Appello Mobile navigation X 3 4 5Bambuser Mobile blog - video based X 3 4 5Bebo Social Network (bought by AOL) X 5 3 4Bluepulse Mobile Community X X 4 4 4BubbleMotion VoiceSMS / BI / Community X X 4 4 4

Web/voice/telco 2.0 list

Very Small

Small

Medium

Large

<5<25

<70

>70


Developer Issues and Requests

Issues with Current Initiatives• No live testing environment for end-to-end

testing• No developer sandbox• Very limited access to key capabilities for

providing interesting applications and services

• Often have a web of stakeholders within the operator which slows/halts the decision-making and/or approval process

• Typically no single point of contact• Inadequate operational support, e.g. VPN

set-up, switch configuration, etc.• Little or no support for billing system

integration• Lack of support for remote monitoring• Lack of flexibility / willingness to try new

business models• Rigid rules & guidelines for contributing an

application• No/limited device independent platform• No/limited embrace of browser based

services

Requests• A live testing environment / access

to test lab• Single point of contact for technical

issues• Consistent operational support, e.g.

network connectivity, SMSC, security

• Willingness to experiment in business models

• Clear path of decision-making up the chain of command

• Real project with full organizational commitment from operators - not a 'fashion accessory.'

• VPN access to on-site systems for remote monitoring

• Delegate testing and approval to third party testing houses.

• ‘Approved developer’ certification for the ability to fast-track approvals, operational requests, etc.


Capabilities Application Developers Seek

• Single sign-on• Address Book API• Age Verification• Billing/Charging• Identity/Authentication• Location• Messaging• Profile API• File Browsing• Browser based API• Presence• SIP/VOIP/Call Control• Mobile Lookup• Connection status• Discoverability• Short codes• Plus lots and lots more……


Potential Telco API capabilities (from App Vendor Survey)

• Authentication & Single Sign-on• Presence (device, application, call state)

and Availability• Device Capabilities / Software• Location (accuracies and freshness),

Proximity, Heading, Speed• Preferences (policies or rules)• Context – a combination of presence,

location, device status, application status, meeting status (calendar), etc.

• Customer data (business intelligence)• Call Control• Messaging • Network address book• Group List Server (buddy lists)• Enterprise Mobilization• VoIP / SIP: tone insertion• Call Flow: ACD, IVR, CRM, Helpdesk• Charging / Billing• Call Log / Call events • Directory • Message Store

• Home Network Enabler• Content Delivery• Policy (Quality of Service)• IPTV enablers• IPTV STB enablers• Content Enablers• Collaboration Enablers• VoIP / SIP call control including invoking

supplementary services• Fulfilment and other BOSS capabilities• Digital Rights Management• Device Management• Local dial in number provisioning • Ringtone purchase integration• Video-ringtone platform• Subscription status• Mobile Video• CDR number frequency search• Calling Name dip

And the list goes on, much further on….. Prioritization is critical

High

Pop

ular

ity


Distribution Discovery

PredictableProcess

Clear Pathto Cash

Developers’ Problems an Operator must Solve


Critical Findings• Operators must:

– Implement processes to ensure ADC (Application Development Community is used by the operator (not repeat the mistakes of the past)

– Reverse developer scepticism by listening, implementing what they need, and show the ADC working

• Application developers will not pay for capabilities exposed

• Customer access is critical

• REST and SOAP/XML is the preferred API

• Full testbed is essential to the ADC

• Copy Apple’s App Store, just copy better


Action Plan


New revenue and increase customer value through Open Innovation

Clear Vision

Open the network to 3rd parties and share in

value createdAgreed Strategy

Short-term OPEX savings, long term revenue growth

Realistic Plan


OrganizationalCommitment

Promote the Winners

Things to do List

Copying is OK

It’s NOT the Technology

It’s your PLAN!


Suggested Reading

Microtrends, Mark Penn

Here Comes Everybody, Clay Shirky

The Gridlock Economy, Michael Heller

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