I presented at a recent sales conference for a large security / IT solution provider on the evolution of the telco industry and the role security and protection plays in that evolution.  I show below a cut down version of the slides I presented, removing the discussion on specific market opportunities and actions.

In the discussion on telco evolution I focused on 4 area:

• Web evolution: discuss the 3 phases of web evolution and the emerging role of a "trusted agent." Operators know much more about their customers than web service providers.  Critically, ad-sponsored models mean the advertiser is the customer not the user.  However, for telcos the users are the customers, hence telcos have far better fit in being the trusted agent than most web service providers. Yet operators remain dumbfounded on how to adopt this role.  TiVo and Amazon are two examples of trusted agent, e.g. with TiVo I turn on my TV and my favorite shows as well as suggestions of shows I may like are there.  TiVo uses my data to create a vastly better experience than flicking through uninteresting channels.  Operators can do what TiVo does but on a much broader scale.
• Power of devices: we've moved to the PC model for mobile devices, and as STBs include Java so that will be the case for IPTV within a few years.  In mobile we'll likely consolidating onto 5 OS (Operating Systems), significantly reducing the fragmentation that's stifled growth in mobile applications.  However, end devices will need protection.  An operators' security layer must focus on the device, as well as the network and services.
• Customer perceptions:  I've covered this in several previous articles, customers no longer make a distinction between web and voice services they're all just services.  For operators to remain relevant as service providers they must play a role across a broader range of services, and not just act as a pipe-provider also a trusted agent.
  
• Rate of service innovation:  Operators are opening their networks to increase the rate of service innovation, but in doing so its never been easier to get malware onto a phone and in time a STB.  The 'elephant in the room' in opening the network is security.  Operators must take an integrated approach using their SDP (Service Delivery Platform): including network, devices and services - because its about their customers NOT just their network.
  

In summary: customer data, trust, security and protection are critical for operators to get right in this emerging environment.

Operators need an integrated security and protection layer, not point solutions for each service as is the case today.  That is protection from malware across all network services e.g. IP, SMS, MMS, WAP push, widgets, apps, etc.  And protection in the network, in devices and in services.

SDP vendors need an integrated security solution across network, services and end-points, which means a partnership with a leading security/protection technology provider is key.  Its a rapidly growing problem as its a highly profitable and more importantly safe criminal business compared to drugs or prostitution; hence a specialist security/protection partner is essential.

Even though M1 is a small mobile operator, roughly 1M customers, it remains one of the most innovative mobile operators.  M1's business strategy is simple: to constantly deliver value to its customers by rolling out new and innovative applications and services.  In mid-2008, M1 began its search for a next generation service delivery platform (NG SDP) to provide a framework for traditional telecommunication services, next generation of value-added services, and enabling it to remove its old IN that limited its ability to innovate.

M1 selected an open source JAIN SLEE (Java™ APIs for Intelligent Networks Service Logic Execution Environment) solution provided by its long-time IT partner hSenid, called the mChoice SDP.  M1's relationship with hSenid goes back to 2002. For nearly eight years, hSenid has helped M1 implement major projects such as the deployment of MySQL cluster, mChoice Rewards, mChoice Recharge, and mChoice Reporting - a comprehensive business intelligence system to help M1 to make strategic decisions and revenue calculations. These solutions were built on open source, resulting in significant cost savings in terms of licensing and maintenance fees.

The standard application programming interfaces (APIs) help M1 provision, control and bill for all the value-added services they provide, whether the services are developed in-house or created by third-party application.  This is a key point the APIs are not just for third parties, they're for internal consumption as well.  M1 set out with the objective of looking for a SOA (Service Oriented Architecture) based solution, given their enterprise architecture.  I discussed SOA in this article.

For M1 its main benefits in adopting a NG SDP are:

• Opens up service innovation, letting third parties offer services to M1's customers or using M1's network capabilities to their customers, which opens up 1000s of new applications and services;
• Launch new services faster, moving from months to days in launching new services (factor of 10 improvement);
• Protects existing investments while enabling future growth, i.e. reusing amortized equipment, e.g. SMSCs, while putting growth onto lower cost platforms (a 10/100 factor cost reduction for growth); and
• Lower operational overhead by simplify on-boarding, contracts, etc. enabling M1's limited people resources to launch 100s more services each year.

hSenid's whitepaper provides more details on the M1 case study. 

There's an interesting discussion the industry needs to have on whether a SOA or a looser web-centric integration framework is the right long-term approach.  For smaller operators this distinction is mute, but the larger the operator, the closer its cost-basis need to tend towards Google - as in the limit they're both service providers.

Network APIs do not require a developer community.  Its just an API: publish, provide code examples, define the process on how a third party can access the API, and you're done.

Network APIs are not necessary for an operator's App Store.  For example operators have been selling content and apps on their portals for years, its a $71B business.  APIs can make some apps cooler, easier to use, contextually relevant; but the two are not dependent, i.e. an operator can offer APIs without an App Store, and can have an App Store without APIs.

Developers are not a homogeneous group, they have a multitude of needs and business models.  They varying from geeky individuals to global enterprises.  Operators must think about a broader category of "Third Parties" when they examine customers of their APIs.  Examples include:

• Enterprises (e.g. where an enterprise's IT developer may want to use presence for their corporate communications);
• Trusted third parties (e.g. local SIs that can use the APIs for the solutions to their SMB (Small Medium Business) customers);
• Trusted third parties that can help operators work better (e.g. someone helping T-Mobile analyze their customer data to they finally start treating me as a customer not a credit card to be billed monthly);
• Content owners that can use APIs to make their audience relationship stronger (e.g. Real Madrid giving up on email and now using SMS to great effect); and
• Developers / service providers who need a channel to market through the operator or web-based developers / service providers who have their own channel.

Developer communities are necessary for OS platforms, e.g. Java development community or the Apple iPhone developer community.  Operators do not need a developer community, they need an ingestion process to get stuff into their stores, and they need a simple process to get third parties approved to use their APIs - these two processes are different.  It makes a lot of sense for the developer communities (e.g. Java) to also act as warehouse, making it much easier to retailers (e.g. operators, Amazon.com, etc.) and developers to have a single point to remove the critical barrier of approval expenses - we're taking about 1000s of approvals being removed per app.

Widgets are just a bookmark with the logic preloaded, data is loaded at the point of execution.  They run in a browser.  It is not a business model, its not revolutionary, its just making things better given the vagaries of internet connectivity over mobile networks.  Think of it like WAP (but its not crap), it makes it easier for customers to use web services on their phone.  Voice, SMS, WAP, and the web browser are equally useful interfaces for accessing services depending on the device, the application, and the customer.

I show below in a single diagram the two faces of the operator as a network, and as a channel to market. And linking that to APIs, Developer Communities, Developers, Third Parties, App Stores, App Warehouses, and Widgets.

API Management has been touched upon by several articles in this weblog.  To expand on this topic to help us understand its function and strategic importance to operators I've put together a whitepaper with Sonoa Systems, a leading provider of API Management to companies such as MTV Networks, Alcatel Lucent and Guardian Life Insurance.  The API Management whitepaper is available here.  

To set the scene on what is covered in the whitepaper: within and between enterprises APIs have been used for over two decades, from the early days of EDI (Electronic Data Interchange) to today's rich RESTful protocols. The reason API Management arose is that delivering simplicity in APIs to developers involves significant complexity in operations for the provider, some of the issues include:

• Authentication and security from multiple providers;
• Multiple API calls and calls across multiple services;
• Different protocols, API versions, and interaction models;
• Variance in performance between different APIs;
• Composition of off-network APIs such as Facebook and Twitter
• Poor visibility into API performance;
• Limited troubleshooting and debugging capabilities for API calls;
• Limited bandwidth, connectivity issues over the wireless network;
• Scalability of the servers underlying the API endpoint;
• Limited memory, CPU, storage on the device limits the client-side API processing capability.

APIs are also fundamental to telecommunications; there is a very long history. Back in 1878 the world's first commercial telephone exchange was opened in New Haven, USA. The switch exposed an interface that enabled people to make requests to set up telephone calls. Over 130 years later telephony switches are still exposing an API for exactly the same purpose. What has changed is the magnitude of types of requests and the sources of those requests - people, computers, private branch exchanges, credit card machines, and many other clients.

As waves of technology have followed the birth of the Internet 40 years ago, enabling the emergence of the World Wide Web about 20 years ago, driving widespread broadband access over the past 10 years.  We have now reached a point where telecommunications and the web are merging into a powerful pervasive services platform.

Previous work has shown that capability exposure has the potential to raise average ARPU by 12-36%. There are many examples of operators today making money out of capability exposure such as Telenor's Content Provider Access which generates $100M per year. Globe in the Philippines generates 1000 new value added services per year with over 1B transactions; that project had an ROI (Return On Investment) of under 2 months. And Telus was able to launch 40 rather than 4 applications per year to its small medium business segment and lower its cost to launch new services by over 75%.

However, operators' networks remain surprisingly under-utilized by the millions of developers building the web; Apple shows the power of harnessing that community for just one proprietary handset. Critical factors in its success are providing direct access to a large engaged customer base; and of relevance to this discussion a rich, easy to use set of web-centric APIs within a common framework. Developers care about cash and/or fame - customers are necessary for both. Operators must reach a point where web developers consider an operator's STB as easy to reach as an internet site is today for the delivery of their services.

Wholesaling capabilities is a core competence of operators since the emergence of the intelligence layer on top of the telephony switch. As an example, 800 (free phone) numbers are a capability that is applied to many business problems. Operators do not create "airline customer complaint toll-free phone services," they enable businesses do that with the capability they wholesale. This is a critical point: APIs are not limited to consumer applications; rather, enterprises are major adopters of APIs. For example, in an enterprise workflow where a request to made for a new purchase, this triggers a message to the approving manager, who confirms the order is OK, and the order is placed. If the messaging and confirmation are done via an SMS or automated phone it can speed up a business processes from days to minutes - which is a very compelling business case.

As telecom and web merge the operator can wholesale a multitude of capabilities, including messaging, billing, click to call, mobile content, conferencing, location, single sign-on, address book, age verification, identity, profile, presence, call control, mobile lookup, IPTV content, connection status, quality of service, messaging short codes, video streaming, set top box APIs, mobile device APIs, to name just a few. All of these need to be provided under the secure policy control operators provide today for their customers. As these APIs are offered to web developers, most operators are struggling to provide the simplicity and scale necessary to gain adoption while maintaining security and reliability of these services.  The figure below shows the role of API Management.

Operators are sitting on a gold mine of capabilities. A new generation of applications are being built by a rapidly expanding pool of developers. These developers are trained in web applications and services, searching for differentiation, and driving consumer demand for mobile internet service. Success will be driven by the population of innovative apps, which in turn will be driven by the simplicity and consistency of access to the operator's capabilities.  API management plugs a critical gap in an operator's ability to monetize its existing capabilities and more importantly enable a rich, easy to use set of web-centric APIs within a common framework and a consistent security model to engage the millions of web developers building applications today.

I know it is frustrating for many in the telecom industry that have just persuaded their management team to invest in API exposure, that we must now step-up-the-game and invest in API Management.  But we've got to try and increase our rate of innovation towards that of the internet to remain relevant to developers, partners and most importantly our customers.  The API Management whitepaper is available here.  

Previous articles have raised the problem of poor customer service from US mobile operators based on my own experience, with the punative charging regime that severely limits the trust customers place in operators for experimenting with new services.

I was chatting yesterday with Ed Finegold from Validas, who help consumers and companies save on their mobile bills.  As a result, they have a vast repository of information about usage and charging across US operators.  Their stories on the savings they've provided to customers are both heart warming and depressing as it is a sad indication of the lack of customer centricity in the US mobile industry.   As an international example, O2 in the UK makes a point of ensuring its customers are on the best plan given their usage, and has offered business customers free of charge bill optimization services for many years.

Below is just one sample of the punative US charging regime in place on voice calls; overage minutes are billed at an exorbitant rate; nearly 2000% of the standard cost per minute, or 700% of cost per plan minute.  This is nothing less than extortion, no wonder customers rapidly adopt other service providers such as Apple and Google for new services when they're treated like this by the US mobile operators.  And its not just voice, comparing the cost of data between iPhone and Blackberry users shows Blackberry users are also getting stung just based on the device they're using.

Operators must urgently adopt a customer-centric approach, they should be offering services such as Validas to their customers; else risk loosing customers for all value added services in the future.

This article reviews some upcoming themes and the passed year's themes.


What will probably be the main themes of MWC (Mobile World Congress) 2010?

• Unfortunately, LTE (Long Term Evolution) will be a key focus of the show.  I've discussed previously why most operators do not need to jump on this bandwagon immediately.  We do not appear able to change our focus from "feeds and speeds" to also encompass service innovation with the same level of investment (at least of time if not cash); this risks further relegation to dumb pipes.  Being a Utility business is OK if you have a monopoly over supply, operators do not, and therefore their price/earnings multiple will move from 7 to 1 or 2 with the current focus on pipes.  Also there are very few unique 4G services, if any; most also work on today's deployed networks.  Note IPTV does not work economically on LTE, no matter what some suppliers claim.  Please remember to raise these points when some suppliers start rambling on about 4G services, they're just re-branded services that can be provided today.
  
• Android will be on a significant number of smartphones, this is obvious, though the handsets will all look samey and do stuff we've come to expect, e.g. easy access to web based services.  You'll find few operators innovating with services specific to their local market, check out Smartone-Vodafone (respect to Chris Lau and his team) for one of the impressive few.  On a related matter, we keep getting excited about there being over 100k apps in the Apple app store, but there are 180M+ web sites on the internet, so Apple has a long way to go.  But this point does highlight the convergence of both web and application search / social recommendation.  Also we keep focusing on the application part of the App Store, but it's a device store front for the sale of lots of stuff including content, and it's an efficient content delivery channel at 70:30 revenue split.
• Common Micro USB charger standard will be touted, a very small step is dealing with the critical issue of device fragmentation - a serious impediment to our industry, which I'll come back to later when I discuss what I'd like to see at the show.
• Symbian will remain a question mark, its attempts at open source have not yet been successful; will it become just a Nokia OS (Operating System)?  At the show we'll likely see continued questioning about its future, especially given the number of Android based devices at the show.  On a tangential point, what I don't understand is Android means resembling a human; Android's lego-like 'metal mickey' logo looks nothing like a human - perhaps this is what Google wants us all to become....
  
• Service exposure will be a theme and I hope we'll see a move from technology demonstration to commercial reality.  I'm hoping for some significant progress on OneAPI with operators driving it, not just the GSMA.
• OTT (Over The Top) service growth, in particular video, and its attendant backhaul congestion will be theme; LTE will likely be thrown at that problem even though it's a radio interface and the SAE (System Architecture Evolution, LTE's core) will not solve backhaul congestion.  Instead a range of compression, optimization and content delivery solutions that are video aware will be presented as an integrated access network solution.
• In summary, we'll see handsets and pipes, the usual gap in service innovation and only a few bright spots in OneAPI and a few operators doing cool services in their local markets (e.g. Smartone-Vodafone)

What I'd like to see (wish list) at MWC!

• ALU (Alcatel Lucent) and NSN (Nokia Siemens Networks) announce their merger and halving the joint workforce in an attempt to create an oligopoly in telecom supply rather than the emerging duopoly of Ericsson and Huawei.  Duopolies are never good for the customer, and watching ALU and NSN's death march is not fun, just boring.
• GSMA join forces with the Cable Industry's Canoe ventures to achieve a global telecom approach to targeted advertising with a focus on the advertisers needs rather than the many failing / niche self-focused attempts.
• Operators announcing services, e.g. SFR did recently did with HomeScope, its easy to be critical about the service (see Home Camera for a better option, though I'm biased) but SFR are actively innovating on services and we need much much more of it.
• Operators, as an industry, tightly define 2 or 3 handset OS and a few handset display formats they will only ever buy, in a long overdue attempt to constrain the fragmentation that is killing the industry; and as critically they will actively enforce compliance.
• The industry finally owns up that there is no such thing as the mobile internet, it's just the internet which is accessed from different devices, e.g. mobile, PC, eReader, TV, and STB (Set Top Box). Should we be talking about the STB internet?
• Operators sign up to OneAPI and do something about it.  With many incumbents, I hear them worrying about helping competitors in working together on OneAPI.  I can not contain my frustration at such self-defeating thinking.  Risk is minimal, not working together will ensure OneAPI is dead on arrive which will hurt everyone, and further push operators into being dumb pipes.
• Apple gets on board with the industry, in particular OneAPI.
• Operators announce API management solutions across ALL the APIs they can expose including BONDI, OneAPI, web, content and other operator's capabilities.  All under a common policy and security framework: Sonoa Systems, 4DK and ALU's Service Exposure Suite are good examples of technologies that enable operators to deliver on this.
• Enterprise services, CEBP (Communication Enabled Business Processes) becomes as important a theme as consumer content.  Enterprise services remains one area where operator service innovation has remained solid - though the cloud initiatives from IBM, Microsoft, and Google will start to become a significant threat in the coming years.
• An LTE reality check: a honest assessment on the lack of customer acceptable devices (not clunky demo phones), and the reality of migration through HSPA/HSPA+.  So we stop the hype that distracts the industry from the 'bread and butter' work of customer service and service innovation.
• The Java community gets its act together and makes Java certified mean something and is aggressively backed by all operators.
• People leave the show talking about services, not the latest phone or how LTE solves all problems.  People talking about how Dial2do, Home Camera, Fonolo, Voicesage, Fun Mobility, Bubble Motion, Ifbyphone, Affle, etc. make their life better.

Then looking out a little further, into the coming decade a few themes I think will be important:

PayTV Industry Disappears in 2020

OTT (Over The Top) services will continue to flourish, from Amazon on Demand, Sony Store, AppleTV, Netflix and Hulu; customers like them, use them and in some cases pay for them. We've talked about this for years, with services like YouTube, which is fun but is commercially limited by the quality of its content.  Hulu, Netflix, Amazon on Demand, BBC iPlayer, and TiVo all mean customers can now get what they want when they want through an integrated (PC/Console and STB) experience - this is sowing the seeds of change in customers' expectations.

The PayTV industry is currently a $140B business, growing to $222B by 2013. By 2020 that industry will collapse in most developed markets as customers and the 6 major content conglomerates fundamentally change the industry with a direct relationship over the internet. The critical enabler is not technology but a fundamental cultural change in how people consume TV content, the seeds of which are being sown today. From being frustrated that there's nothing to watch on TV today, in 2020 as they turn on the TV their favorite programs, shows, movies, as well as popular and relevant stuff will all be there with none of today's waste. Customers win with lower costs, better entertainment, more time and real choice. Content owners win with greater revenues.

What will this mean to the US Cable Industry in particular?  We're already seeing consolidation between the producers and PayTV providers with Comcast / Universal and Time Warner / Time Warner Cable (TWC).  Will the industry start to consolidate with smaller MSOs (Multi Service Operators) being swallowed into these two conglomerates?  Can the industry continue to throw lots of low quality "channels" at customers for which most would not pay if they had a choice?  For example, my wife hates the fact that we have no choice but to pay ESPN $3.80 for channels she dislikes, as they're in the basic package - Governments can get away with it in how they spend our taxes, but can a competitive commercial business?  The US ecosystem is very much an established old-boys network, which is resistant to change; perhaps the PayTV industry outside the US will change first.  Though we're already seeing cracks here in the US as Fox is advertising that TWC may drop it.  As long as I can access 'Lie to Me' and 'Lost,' I really don't need the Fox channel.  Once a significant minority of customers think like that, things are going to change.

Operator Consolidation to between 6 to 10 Global Consortia by 2018

We'll likely see a hold out for 3 or 4 more years through outsourcing and margin erosion, but size matters in the economics of a commoditizing industry.  If large operator groups get there act together by reducing the regional overlapping roles and force through commonality, we'll start to see a large gap in operator economics which will trigger a consolidation bandwagon, likely beginning in 2015 and in full swing by 2018.  

IPTV becomes Hybrid TV

Hybrid TV is defined by the presence of a hybrid STB that is part IPTV (using a managed IP network) and part broadcast (receiving the broadcast digital content from a non-IP service like Digital Terrestrial, Digital Cable, or Digital Satellite).  There are many examples including Verizon FiOS and BT Vision.  For many IPTV over DSL service providers, to provide a basic competitive product requires they deliver the popular TV channels at the expected quality; which in many cases requires the IPTV provider to use the free to air digital terrestrial service.  Put simply, IPTV by itself is inadequate, interactive services are only nice-to-have.  Customers still prefer to select by means of channels - e.g. BBC1, Sky1, etc.  So through 2010/11 IPTV will become HybridTV; however the long term prognosis of such payTV systems does not look so rosy as described previously.

Clearwire's Long Slow Death

They backed the wrong technology, costs will remain 50-100% higher than the global LTE standard, their capacity per customer compared to fiber is minuscule (<1/100th), wet leaves impact the reception of the service, and it can not adequately support OTT TV (which will become a customer decision criteria).  It would be best for their business to admit the mistake and restart, but with so much money poured into a broken business model it will likely take until 2013/2014 for the business model gap to become apparent to the analysts.

Service Exposure Industry Litmus Test in 2011

If we can not make service exposure work as a business it's a good litmus test for the industry that we're likely well down the road to being a pipe provider.  I think by 2011 we should do the test and then plan accordingly...

Cloud Computing's Impact on Telecom

Cloud computing is a big business, in 2008 it was $16B and it looks well on its way to $43B by 2012.  Its mainly been the focus of web based service providers and early adopter businesses, e.g. cash strapped start-ups; but things are slowly changing, though security and reliability remain the main inhibiting factors.

Over the next couple of years we'll likely see telecom operators taking over content delivery networks as the margins in that business get squeezed and it becomes a value added service on any national / global transport agreement.  For example Deutche Telekom could likely buy Edgecast, Global Crossing or Level 3 could buy/merge with Limelight.  Though not technically cloud computing it demonstrates an important merging of transport and web-centric business services.

Cloud Computing and the Enterprise is a real threat for operators as the likes of IBM, Microsoft and Google build out their services for, in particular, the small and medium sized businesses (SMB).  Also Skype's initiative in targeting SMBs is creating a global VoIP community, if partnered with one or more of the above cloud service provides it could provide very attractive economics, again reducing an operator to nothing but a pipe provider to the cloud.

Motorola and Cisco Merge to Become a Video Powerhouse?

Droid will not be Moto's savior, unless you're a 220lb+ person who may think the phone is not that heavy.  Moto has a strong STB / cable business, yet it continues to struggle in the rest of Telco.  Cisco remains focused on routers and anything that encourages the sale of more routers (e.g. their Telepresence initiative has little to do with video conference, its really just about selling more and bigger routers.)  Cisco also has a strong cable business thanks to the acquisition of Scientific Atlanta; perhaps Cisco and Moto together will have enough momentum to create a globally robust router and CPE business across all segments including Telco.

Copper Retirement and VDSL (Very high speed Digital Subscriber Line) Fails

By 2015 we'll likely see some operators (outside those with national FTTH (Fiber To The Home) plans like Singapore) announce the retirement of their copper plant.  Operators using VDSL will continue to struggle in achieving the promised 50 Mbit/s.  So after three decades of talking about FTTH we'll likely see those telcos finally bite the bullet and make the ultimate commitment, else die as a business, unless they're a laggard state run monopoly in which case they'll act as a tax of business and social prosperity.



The key theme has been as an industry we're being driven by customer behavior, rather than leading it we've become reactive.  This is new, as an industry we've always been way too far ahead of customers, launching services sometimes a decade before customers were ready.  We're never going to regain that position as web and telecom converge, the emerging challenge is defining if telecoms has a role beyond pipe provider.

Some of the trend this year were:

• App Stores.  Let's face it, the ODP (On Device Portal) which has been around for many years is the app store, its just we blew it and let Apple take the lead.
• A focus on widgets, or a hope that a browser can remove device variations.  This works to a limited extent but its not an answer; JIL (Joint Innovation Labs) is going to struggle if it just focuses on widgets.
• Customer service gap.  I've referred to my own experiences in the weblog with telcos' poor customer service and how that limits an operator's role in service innovation as customers simply do not trust them when experimenting with new services.
• Web services and telecom services: customers do not differentiate and as such they increasingly view some telecom value added services as dated and out-of-touch.
• OTT services' relentless growth, the continued explosion in video over the internet, and the failure of mobile TV. 
• Regulation - open access is inevitable for the good of the national economy (competition / innovation) and just as importantly the voting public like it.  Nothing gets the public angry like BT blocking BBC iPlayer - they paid for internet access and now it comes with strings!
• Power is at the edge.  Witness the latest Samsung TVs with internet access built-in, TiVo, iPod Touch (iPhone that costs $300 rather than $2400), games consoles, eReaders, and smartphones which are reaching near 70% of phone sale for some operators.  Power at the edge is empowering the customer to choose their service provider.
• Focus on other ecosystems. Advertiser just want to buy inventory they understand and can measure as part of their existing business; content owners want a direct customer relationship (device store fronts with a 70:30 split is a good deal).  Telco is a small piece of each of those and many other ecosystems, we must understand how fit in to maximize value rather than trying to own customer as in the end we risk owning nothing but a pipe.
• SDP (Service Delivery Platform) became mainstream, so the technology is now in the network, the challenge is changing the culture to harness what it enables.
  
• IMS (IP Multimedia Subsystem) regardless of hype has been internalized by operators and is generally being used for core voice applications where appropriate. See my IMS report for more information. 
  
• O2 Litmus showed operators get it in the importance of direct access to an engaged customer base.  Open Telefonica and Verizon Developer Community show a similar trend.
• CEBP (Communication Enabled Business Processes) started to gain main stream attention.  See Pat Murphy's CEBP report.

We witnessed this year the passing of many telecom-centric start-ups focused on service innovation.  Operators are taking too long to get new apps to their customers, a culture change is required to focus on service innovation, not just network operations.  Given the infrastructure is now being put in place to protect the network (SDP) there should be a far greater willingness to launch many new services.  This is NOT copying the bookmarks of Apple (that drives data traffic which is good), but communications centric services and enabling other ecosystems to deliver their goods and services to their customers with greater value and satisfaction all round. 

Its no longer a technology issue its an industry-wide culture change to accept much more risk to innovate around services and business models (which means failing much more often) to remain relevant to our customers as service providers, else they will choose our future...

Apologies for the gap in publishing, with the birth of my son, Liam, on the 28th Nov, and a rush of end of year projects; I've just not had the time.  But with the holidays coming up, I have a backlog of material to publish :)

Today I had an experience that is critical to a theme of this weblog on how operators can remain relevant as service providers.

I asked Verizon for a cablecard so I could record programs on my DVR (Digital Video Recorder), they were due to come round this morning, they did not.  It appears a dispatcher was required to confirm the appointment, it would have been nice for them to have let me know, but they did not.  As they're my telephone, internet and TV service provider they should have been able to contact me; there are enough presence indicators so show I'm connected to their network; and they could have sent a message to my voicemail, mobile, STB or even email.  So half a day of my life wasted waiting for Verizon, a spoiled Christmas surprise for my wife and not even a Saturday appointment.

Compare this to my experience in getting Amazon on Demand working through my DVR.  I connect to the internet, entered my credentials, and within minutes a vast library of content is available, and a couple of great titles already downloaded; at least the DVR is not completely useless this weekend.  Its just a sad example of why customers are increasingly  turning their backs on operators as their preferred service providers.  Telcos need to utilize their networks much more effectively in the basics of customer relationship management.  The network APIs I've discuss for use by third party developers should be used by their internal systems as well to avoid the poor experience I had today.

Last year I was reading Jack Weatherford's book "Genghis Khan and the Making of the Modern World."  One of Genghis Khan's early critical achievements was stopping the inter-clan wars, so the Mongols focused outside Mongolia, and went on to conquer most of the known world.  Taking each city-state in turn through a simple 3 step plan:

• Shock and awe;
• Containment with the latest siege weapons; and
• Logistical support to outlast the city and cause its fall.

The above summary is a gross simplification as they also innovated in war technology and strategy (feigned retreat).  The simplification is for the purpose of this analogy.

The success of open web-based APIs got me thinking about that early achievement of Genghis Khan.  It has enabled a far richer service environment over the web than any individual service provider could hope to achieve.  One simple example, check out the latest Samsung's InternetTV with a whole range of widgets built into the TV covering YouTube, Flickr, Yahoo! etc.

Telcos are still behaving like the city states.  Thinking they're safe with the wall granted by a state license from the OTT (Over The Top) threat.  But looking to history showed those walls were of little use against the 3 step plan.  So drawing an analogy to today's situation:

• Shock and Awe: The financial analysts and investment bankers (both of whom grossly lack regulation, but that's another story) have partially created the 'shock and awe' in the valuations they assign to telcos versus the cloud/web-based service providers.  As well as the popular prophesy-type messaging on the inevitably of the Telcos' demise, it reminds me what Cisco did in the '90s with its evangelical marketing on the inevitability of IP.  But more importantly, operators themselves are creating a self-fulfilling prophesy: I've presented many service innovations, and talked about some of them in this weblog, yet the common refrain remains "Yes, but..."
• Containment with the latest siege weapons:  Service innovation is the latest weapon of choice from the cloud-based service providers, its success is evidenced by customers increasingly using OTT (Over The Top) services, not just on mobile phones such as iPhone, but on any internet connected device, e.g. Samsung's InternetTV.
• Logistical support:  The vast global data centers of cloud-based service providers; e.g. Google has over 350k servers distributed throughout the world.  It is so vast that it has changed the structure of the internet in the passed 2 years, creating a category of hyper-giants such as Google and Microsoft who are no longer dependent on a global transit backbone and directly connect to IXP (Internet eXchange Points) forming a significant component of the internet backbone.

For operators to avoid the fate of the city states, in becoming vassals of the Mongolian state they must harness the same principles of acting together, open APIs, service innovation, and global logistics.  

• Act together: this goes beyond GSMA's OneAPI, which is critical.  Cable Labs in the US is a great example of an industry co-coordinating.  Fragmentation is killing the industry, co-ordination is required in committing to common OS(s), committing to devices over multiple years (like Apple's commitment to the iPhone), committing to common cross-carrier services that do not require IMS, committing to acting as a vibrant innovative services industry.  Also as a petty peeve of mine; there are very few 'special requirements' - the number of meetings I have with multinational operators and hear about how one OpCo (Operational Company) has special requirements based on what appears to be no other rational argument than maintaining their job.
• Open APIs: operator must bring together the web, network and device based APIs in a way that's easy to use for developers, content owners, enterprises and their customers.  I've discussed API management in the SDP Asia Summary article and will also be discussing it in more detail in a later article in December.
• Service innovation - just do it, no more "Yes, but..."  We should be honest with ourselves as an industry, we just don't know exactly what is going to be a successful service; so its important to fail and fail often as that is the essence of innovation (as long as you learn a little each time you fail.)
• Global Logistics.  The telecoms industry as whole has a combined computing resource far in excess of the Cloud-based service providers.  Operators need to examine how to create a federation of clouds to share services, capabilities, and application-level connectivity to deliver valuable services to end customers that just work.

The Telecoms industry must meet the 'Genghis Khan' challenge head-on with the same tools and strategies, else become a vassal (pipe provider) of the Cloud-based Service Providers.  Being a pipe provider does not give an operator the same valuation multiple as a utility (generally 7), Telecoms operators do not have a monopoly like water or electricity - hence their multiple will tend to 1!

The Crunchies are to technology what the Oscars are to Hollywood.  The awards celebrate the best tech accomplishments of 2009. Voting is now on for the third Crunchies award ceremony on Friday January 8, 2010 at 7:30 pm the Herbst Theater in San Francisco.

I've reviewed HomeCamera before in this article.  The HomeCamera webcam security software makes it easy for people to use their webcam for internet home surveillance, office surveillance, and more.  Subscribers in over 180 countries around the world use HomeCamera as nanny cams, to watch over their babies, their young children, elderly grandparents, their vacation homes, dogs, cats, fish (and yes, even hamsters and rabbits!). 

Their subscribers use HomeCamera's built-in motion detection for security cameras, to receive image and video intrusion alerts on their email and mobile phones. Features like automatic recording schedules enable users to see what happened in their home throughout the day, even while they're on an out-of-town work trip. Business customers use HomeCamera to watch over their factories, their shops, warehouses, and more. 

You can follow them on their Facebook fan page.  Some of their customer stories are amazing, they're making a difference. VOTE HERE for HomeCamera in the best international start-up category, thanks.

The 4th annual SDP Asia Conference took place in Singapore from 27-28 October 2009.  It was as well attended as ever, with over 70 attendees from around the region.  Some of the operators presenting at the conference included:

• Krishna N Basudevan, GM, Information Technology, Aircel Ltd, India;
• Clark Lam, Director of Service Platforms in Consumer Products, SingTel, Singapore;
• Rahadian Krishna Sundara, Head of Business Research, R&D Center PT Telkom, Indonesia;
• Andrea Demaria, Project Manager Service Layer & Messaging Innovation, Telecom Italia, Italy;
• Alex Ibasco, Group Head, Strategic Business Development, Smart Communications, Philippines; and
• Dr. Jan-Bon Chen, Chunghwa Telecom, Taiwan.

For me the key theme was a shift in the focus of the conference away from 'why an operator should deploy a next generation SDP' to commercial and operational performance improvement.  Operators such as SingTel and Telecom Italia were sharing their deployment experiences from 3 years of operations.  I show below a summary of some of the slides I found interesting at the conference.  In my opening presentation I claimed we've reached the end of the beginning in the SDP story, the focus must change from technology to how the SDP can transform operators so they remain relevant to customers as service providers, not just bit pipe providers.

My presentation at the conference was titled "SDP Evolution: Revolution, Convolution, Amalgamation or Elimination?"  I examined the impact the confluence of several critical technologies / developments have on the SDP such as: cloud computing/managed services; and open initiatives such as Joint Innovation Labs, GSMA's OneAPI, OMTP's BONDI, and OSGi (Open Services Gateway initiative).  Reviewing key trends in operators' requirements and their competitive environment as web and telco converge on the handset.  Presenting a view on the current and likely future evolution of the SDP: will it change, get more complex, will silos finally consolidate, or will it simply go away?  A key message was the importance of API management for operators across the device, network and web.

On Thursday the 29 October I ran a one day workshop at the conference entitled: Application Stores, Developer Communities, Content, Games and Widgets: Strategic Market Review and Operator Opportunity / Risk Analysis.  A sample of the workshop is shown below.

I also presented at a supplier event during the week on why Operators need Developers, presentation is show below.  The week spent in Singapore was a turning point for me in the SDP journey.  SDP is now a core part of an operator's capability set, the challenge now is how to use the capabilities provided to remain relevant to customers as service providers given the Over The Top (OTT) Tsunami that's about to hit the industry.  What we've witnesses to date with Skype, Jahjah, Yahoo! IM, YouTube, and Hulu is only a trickle, the OTT business case now makes business sense.

Cloud Services are already a significant market (estimated at $23B this year), and growing rapidly to $43B by 2012.  We've seen several operators launch cloud computing services, e.g. AT&T, BT, Deutsche Telekom (Zimory exchange), KPN, NTT, Orange, Verizon (CaaS (Computing as a Service) where HP was its main technology partner), and Vodafone.

There is a lot of confusion about cloud computing.  Particularly the distinction between cloud-based services (e.g. SaaS, Software as a Service) and computing infrastructure offered on-demand (IaaS, Infrastructure as a Service).  The diagram below attempts to depict how the virtualization technologies and cloud computing services map.
A generally accepted definition of cloud computing is the provision and management of rapidly scalable, remote, virtual computing resources, charged according to usage, generally using the internet to connect the resources to the user. But in virtualizing resources a user no longer knows what is running where, or the proximity of processors to storage.  This impacts security, bandwidth and control requirements - which is where telcos come in as they can help in solving these issues and offering a complete package on a simple metered basis.

Some example suppliers include:

• Virtualization, Infrastructure management and grid engine technologies: 3Tera, Cassatt, Citrix, Eucalyptus, Hadoop, IBM, Microsoft, Novel, Oracle (Sun), Parallels, Red Hat, Virtual Iron, VMWare
• Multi-tenant, deployment and cluster management technologies: 3Tera, Appistry, Elastra, Enomaly, Ecualyptus, Globus Alliance, Hadoop, Oracle (Sun), Platform Computing, Q-Layer, RightScale
• IaaS providers: Akamai, AT&T, Amazon, Citirx, ElasticHosts, Flexiscale, Globus Alliance, GoGrid, Joyent, Layered Technologies, Microsoft, Rackspace, Soasta, Verizon

However, as customers come to rely upon Cloud Services we've seen a number of failures:

• The recent Microsoft Danger outage: loosing contacts and messages for over 500k customers
• Google: Mail, search, news and apps have all had outages over the past 18 months
• Twitter and eBay PayPal: Both out in August up to half a day
• Rackspace: Down for one day
• Windows Azure: Down over a weekend in March
• Force.com: Down on Jan 6
• Amazon S3: Down last year

To gather opinions in this rapidly emerging space I've put together a short questionnaire.  If you're involved in this area, please complete the Virtualization Technology and Telcos Questionnaire and I'll share the results.

On an earlier Hybrid TV questionnaire the results have been quite surprising, Satellite, Cable and IPTV providers are all moving to Hybrid TV.  When I get a chance I'll put an article together on the results; but its almost like a silent paradigm shift has happened in the PayTV industry without anyone noticing.

Early IPTV deployments showed customers expect firstly a broadcast TV experience. The on-demand experience is secondary. Hence the entry level IPTV bouquet (set of channels) must include the region's 'standard' broadcast quality package.

Hybrid TV is where an IPTV connection and either a digital terrestrial, cable or satellite connection are delivered to the STB (Set Top Box); providing a full broadcast package and a rich on-demand service.

Examples of Hybrid TV services include:

• BT Vision which uses FreeView (digital terrestrial TV) for the broadcast channels, other operators following this model include Fastweb, Telecom Italia, JazzTel and Telefonica.
• Canal+ Le Cube whose satellite STB also includes an internet connect for video content (though more internet TV that IPTV (no managed IP access) I'll let is pass as Hybrid TV.
• Verizon FiOS which uses MoCA (Multimedia over Coax) for the delivery of VoD and widgets, rather than over the digital cable multiplex.

The purpose of the Hybrid TV questionnaire is to gather requirements, opinions and experiences on Hybrid TV.  Please click here to take the survey, I'll share the findings on my weblog.

I recently commented in an interesting post from Alec Saunders entitled "Steve Ballmer wrong about e-readers."  Reproducing Alec's post here:

"In a vintage Microsoft moment, Steve Ballmer has said that Microsoft doesn't need to build an e-reader, because the PC is already the most popular reading device in the world. "We have a device for reading. It's the most popular device in the world. It's the PC", said Ballmer.

I wish I agreed.

The fact is, I (and many others) have been debating about buying an e-reader device for some time.  The convenience of the form factor is just too appealing.  An instant-on high-contrast device that I can easily hold while lying in bed or sitting on the sofa, and that can hold a significant portion of my library... well, I can only say that such a device would have huge appeal to me.

Don't get me wrong.  I read a lot of material on my PC.  I don't read anything of any length or consequence on the PC, however. I read it on paper.

And more and more, I find myself reading books on my iPhone.  It's instant on, I can easily hold it while lying in bed, and it can hold a significant portion of my library.  If the screen were a little larger - say 8.5 x 11 inches - it would be perfect.

Food for thought Mr. Ballmer.  Sometime in the not too distant future I'm going to buy an e-reader.  It can't be a Microsoft product if Microsoft doesn't make one."

I thought I'd reproduce my comment here:

'Like so many consumer electronics topics today, format-wars, fragmentation and use-case dependent diversity will likely dominate. The e-reader is a great technology, for some it will be the answer they seek; for others books are preferred because they can be SHARED, taken anywhere, squeezed into the airplane seat pocket or a carry-on bag without worry, left on the beach, and even read on the toilet (stepping on a book doesn't break it). E-readers unfortunately lack the ruggedness of a book.

The PC/Mac/tablet can be adequate for reading articles / papers / analysis - especially if any bookmarking/cut&paste is required, or SHARING. Though for some traditional printing on paper is required - could be another e-reader use case here, though I find some PDF documents don't appear that good on e-readers.

The book market in the US is about $25B. Current Kindle sales are shrouded in mystery but estimates of 1.5M units by the end of the year, and 3M total e-reader units shipped are being made by the likes of Forrester. Focusing on the facts, Sony sold 400k units last year. Where available 35% of book sales are for the Kindle version. Global e-book sales are up 300% last quarter compared with last year to $38M (US book sales were $8B).

As the price of the Kindle continues to drop from $299, to $259 (US only), $279 international version. Though there appears to be a hefty 40% premium on book prices for international Kindles because of roaming data charges.  Once it gets to that critical $149 it will then be in the early majority segment. So e-readers are here to stay and will likely become a significant part of book industry, so its unlikely the Publishers will stop this trend, though there remains a lack of inventory at the moment.

The question of format wars will arise. Currently my books are not dependent on Amazon. But with Kindle the content is dependent on Amazon, and critically it can not be shared. Google will soon be a significant player - will Kindle play fair with Google? There remains some significant uncertainty in the e-reader market.

Maybe the opportunity will be not in the e-reader hardware, but in the format wars, and the winner there will be whoever can solve the sharing issue, allow multiple stores, and have PDFs displayed reliably. So I agree Ballmer is wrong that the PC is good enough, but I'm not convinced MS need an e-reader, rather a solution to the above problems that can allow flexibility in whatever e-reader I buy. Though I think Sony may get there first.'

This got me thinking again about the role of store fronts and operator app stores, see this article on The Emerging App Store Ecosystem. In the e-reader market mobile operators are only providing commoditized transport for the Kindle, no other wholesale capabilities, such as billing, DRM, security, authentication,  type of connection, roaming status, device type, etc.  So does every e-reader have to build their own store, or can operators create a store front infrastructure that makes it easy for any e-reader and any publisher to deliver content to their customers?  The US book market alone is $25B, so there must be enough revenue there to justify operator investment, else Microsoft will do it.

The 4th annual SDP Asia event takes place in Singapore from 27-28 October 2009.  Some of the operators presenting will be:

• Krishna N Basudevan, GM, Information Technology, Aircel Ltd, India;
• Clark Lam, Director of Service Platforms in Consumer Products, SingTel, Singapore;
• Rahadian Krishna Sundara, Head of Business Research, R&D Center PT Telkom, Indonesia;
• Alex Ibasco, Group Head, Strategic Business Development, Smart Communications, Philippines; and
• Dr. Jan-Bon Chen, Chunghwa Telecom, Taiwan.

On Thursday the 29 October I'll be running a day-long workshop at the conference entitled: Application Stores, Developer Communities, Content, Games and Widgets: Strategic Market Review and Operator Opportunity / Risk Analysis.

The devices at the end of operators' networks are now at the fore-front of the convergence of web and telco. Once upon a time those devices were controlled by the operator, today those devices are becoming increasingly open; enabling most of an operator's value added services to be bypassed, including voice! The workshop will provide an independent review of the technologies; operator initiatives, e.g. Vodafone, Verizon, China Mobile and Softbank's Joint Innovation Labs;  operator successes / failures; review the bypass threat; and evaluate opportunities created by the convergence of web and telco. The objective is to provide a fact
based and quantified view of the emerging threats/opportunities and provide attendees with an action plan on how to respond.

In the workshop I'll be covering topics such as:

• Emerging app store ecosystem; 
• Simplify explaining what are widgets, data services and APIs;
  
• How JIL (Joint Innovation Labs), W3C (widgets), OpenAPI, BONDI, AJAX, and SDP all fit together;
• Deep dive into OneAPI, BONDI, JIL, Zembly, and OneApp;
• Examining in detail the developer communities and stores of Apple, Nokia Ovi and Android;
• Explain the developers' perspective, and the critical problems an operator must solve to retain value in this emerging market;
• Deep dive into operator initiatives such a:
• Vodafone Betavine;
• Verizon Developer Community;
• Orange Partner;
• Telenor Content Provider Access; and
• Cricket Communication.
• Then focus upon quantifying the opportunities and threats; as well as identifying strategies and action plans both operators and suppliers can adopt in the emerging market.

I'll also be presenting the moderating several sessions.

SDP Evolution: Revolution, Convolution, Amalgamation or Elimination?

• Examining the impact the confluence of several critical technologies/ developments have on the SDP such as: cloud computing/managed services; and open initiatives such as Joint Innovation Labs, GSMA's OneAPI, OMTP's BONDI, and OSGi (Open Services Gateway initiative)
• Reviewing key trends in operators' requirements and their competitive environment as web and telco converge on the handset
• Present a view on the current and likely future evolution of the SDP: will it change, get more complex, will silos finally consolidate, or will it simply go away?

Operators-Developers Dialogue : Creating A Killer Application Development Environment with SDP - Driving The Customer Experience And Adopting Open Innovation Models

• How can operators create an attractive application development environment for third party developers?
• What are the unique enablers they can offer in the short and long term?
• How do they see the collaborative ecosystems being structured? For example, should they partner with other operator and equipment providers' development communities?
• How can SDP provide a unified network service creation and service exposure infrastructure for new and innovative services?
• How do they intend to monetize the applications created by third parties?

Panelists will be:
Varun Arora, CEO Home Camera, Singapore (who is the winner of the InfoVision Award at the Broadband World Forum - a first for a Singaporean company)
Alex Ibasco, Group Head, Strategic Business Development, Smart Communication, Philippines
Peggy Kuo, Executive Director, APAC Consulting Media, Singapore
Emillie Guldner, Business Development & Sales Asia Pacific, Mobile Distillery, Singapore

Examining the Changing Business Drivers for SDP & Ensuring Return on Investment

• When does an SDP deployment make business sense?
• What are the key metrics to track SDP deployment performance?
• What is the key to achieve rapid and low-cost deployment of SDP?
• What can be done to minimize the risks of implementing an SDP?
• How can you optimize the ROI of your SDP implementation?

The above session will be a "fire-side" chat with Clark Lam, Director of Service Platforms in Consumer Products SingTel.  I'm just wondering where Informa's getting the fire from?

SDP Asia provides a unique forum where innovations, hype and emerging business models are adapted into what specifically will work for the diverse Asian markets.

O2 Litmus just announced the winners of its application competition:

• Intelligenti Publishing, who takes home the £10k prize; and

Two apps shortlisted by a judging panel of O2 customers were:

• Percula Software's EventHorizon; and
• Live TalkBack.

Live TalkBack is founded by Matt Millar, who was on my panel session at the Smart Pipes Event in May (Day One weblog entry, Day Two weblog entry).  Live TalkBack is an interesting app, enabling broadcasters and event organizers to interact with their audience in real-time in a modern, graphics rich, web-like experience.  Currently its available across the Apple, Ovi and O2 Litmus stores - again further evidence that O2 Litmus understands what developers need with direct customer access.  The app moves audience interaction beyond the stone age of calling / texting - which is on the decline as people become disenchanted with the premium charges imposed on them which is then used to pay for Simon Cowell's next conspicuous consumption.  And instead enables a graphical, point and click, instantaneous interaction; with vastly more detailled audience analytics.  Broadcasters, event organizers and advertising agencies should give Live TalkBack serious attention.



Intelligenti Publishing provides a platform for authors and publishers to get their content onto the Apple iPhone/iPod Touch platform.


Percula Software's EventHorizon is a cute app for viewing upcoming events.

Patrick Murphy (email Pat) has just released an excellent report on the status of communication enabled business processes (CEBP) that is likely to become a reference text in the emergence of this important category for both operators and application developers.  

The report provides an overview of the CEBP industry relative to Telco APIs and voice centric application providers. After a minimum of 3 to 10 years of work by a wide range of service providers and application vendors the industry is at the end of its initial phase of technology-led innovation, this report provides important guidance on the next phase of business-led innovation. During the technology-led phase there have been successes, failures, consolidations, mergers, and acquisitions. However, IPOs, exits, or standalone profit centers within large companies have been few. Yet, revenue is being generated and hard earned profits ramped up by a few smart and well timed vendors. As with any technology wave, most firms will fail.  The report is pragmatic, it aims to help the reader improve their odds for Crossing the Chasm. Put simply the industry has reached the end of the beginning of CEBP innovation and Geoffrey Moore's Chasm is in front.
 
A review is provided of the emergence of CEBP, and some needed clarity on the relationship between CEBP and Unified Communications (UC).   Some vendors have attempted to muddy the water in claiming CEBP is enabled by their UC solutions, as they try to persuade enterprises / operators to buy / resell their UC platforms.  Relevant network API providers are reviewed, e.g. Orange, BT Ribbit, Voxeo, Broadsoft and ProgrammableWeb.com.  Several CEBP application vendors are case studied including Jott, Varolii, and eSTARA.  The conclusions provide both clear guidance on how to navigate the business-led innovation phase, as well as some all important market size estimates of CEBP, which is currently at $3-4B.
 

I recently completed a report for Mind Commerce entitled: "IMS (IP Multimedia Subsystem) Status Report: Emerging from the Trough of Disillusionment?" This report provides a valuable independent IMS status report that can help all in the industry have a clear view on its current status and the likely paths operators will take in the evolution of their networks.  Its available from Mind Commerce.

A previous weblog entry asked for responses to a small IMS survey. This weblog article presents some of the results.  The respondents came from across the world, across operators and suppliers, and across all functions.  Though there is a bias towards suppliers, Europe and the technology office.

The figure below shows the response to the question, "If you're an Operator what is your IMS status?"  Most of the operators are either "watching and waiting," or in lab trial; none were deploying.  In the IMS Status Report 8% of those operators surveyed were deploying IMS.

The figure below shows the response to the question, "What do you see as the main barriers to IMS deployment?"  Clearly business case dominates, as was the finding in IMS Status Report. With complexity, lack of devices and cheaper alternatives following in importance.
The figure below shows the response to the question, "What do you think will be the initial problem IMS solves when deployed?"  Converged voice / multimedia platform is the clear leader.  In the IMS Status Report multimedia was less of a focus, given the poor performance of video communication services; however, the online survey had a greater percentage of suppliers; while the IMS Status Report focused on operators.
The figure below shows the response to the question, "Do you think any of the following will be a driver for IMS within the next 4 years?"  LTE takes the lead, again the greater vendor component to the survey has a significant shift in the results.  For most GSM-based mobile / converged operators LTE is unlikely to be such a driver.
The final figure below shows the response to the question, "Do you think any of the following present a viable alternative to IMS for the next 4 years?"  This result was more consistent with the IMS Status Report with a broad range of technology alternatives either delaying, or providing a stepping stone towards an IMS core. 

Its interesting to compare and contrast the results of the online survey to that of the IMS Status Report. Its clear there remains a significant gap between operators' and suppliers' views on this topic. The IMS Status Report. provides an independent and quantified view of what is happening in the industry on IMS (IP Multimedia Subsystem), through the presentation of results from an industry-wide survey that encompasses 137 interviews, 101 of them being operators.  Its available from Mind Commerce.

The Broadband World Forum is the main telecommunication industry's event for broadband, drawing thousands of attendees from more than 100 operator companies and all the top broadband vendors.  Keynotes at the event came from industry leaders such as Hans Vestberg, CEO Ericsson, Jean-Phillip Vanot, SVP of Innovation and Marketing for Orange, and Mika Vehviläinen, COO of NSN.  The plenary sessions packed out and main theater at CNIT in Paris, and at the same time the exhibition floor was packed.

One of the highlights at the event for me was HomeCamera, who I reviewed on this weblog as a start-up to watch, won the InfoVision Award.  Its great to see innovative services being recognized by the IEC at the same level as the big names such as Huawei and NSN.  This was a key theme of the conference, across all the keynotes was the importance of enabling open innovation from third parties to maintain an operator's relevance as a service provider to customers, not just a pipe provider. 

Following this theme I ran a session "Stimulating Service Innovation through the Application Developer Community: Open Innovation".  On the panel were:

• Varun Arora, CEO HomeCamera;
• Christophe Francois, VP Mobile Multimedia Products and Services, Orange Partner;
• Sean O'Sullivan, CTO Dial2do;
• James Steadman, Senior Director, Product Management Oracle; and
• Ian Valentine, CEO, Miniweb.

The panel covered the ecosystem of operator, middleware and developers, so we could achieve an adequate breadth of views.   The panel is also a mix of voice 2.0, web 2.0 and TV 2.0 developers.  There is much to be gained by mobile and broadband operators looking at how the TV guys package their content, and for the TV guys to see the challenges operators face in creating development communities and application stores.  The session was purely discussion, no slideware.  An interactive session with the audience.  I only asked the opening question, the audience and the panel did the rest.

To set the scene I reviewed some of the challenges operators face given their decade long search to work with developers.  I reviewed the critical result of a developer survey I ran earlier this year were 50% of developers who had engaged with operators have given up, its described in the slides I gave at the Cable Labs conference.  Another example is Fonolo, at the 4GWE conference the CEO made a statement I hear too often; "We tried working with operators, it was too hard, we gave up and now go direct."  BTW, Fonolo, is one of Time Magazine's Top 50 websites, I reviewed Fonolo as a start-up to watch last year.  I tried (and failed) to help Fonolo get into operators; the general reaction from operators was "Cool, I love it.  But I'm not sure because...."  I was hoping for the reaction, "Cool, I love it.  Let's get it in the App Store and see what customers think."  Its not just processes, a cultural change is required in being open to innovation; rather than risk avoidance.

I opened with the question, "If you could have one wish to make working with an operator easier, what would that wish be?"  Some of the issues raised included:

• Fair revenue share, with 70/30 being one limit, but operators taking increaing share for additional services such as marketing;
• Speed: short time to get to market, Apple claims the fastest time from code for customer, Microsoft claims 10 days, Verizon Developer Community aims for 14 days;
• Simplicity in the processes for getting in front of the customer.  Most operators hide their customers away from developers, leading to developer frustration.  An operator's core value is delivering a large engaged audience to developers; and
  
• Let customers decide, operators have proven poor in consumer service selection, let's face it they're mostly grey-haired or balding 40/50s males; its not an ideal demographic for 'picking' services.

From that, the discussion moved onto the challenges of:

• Visibility, given Facebook's >350k apps and iPhone's >65k apps; what can operators do to help developers promote their apps;
• Marketing, the importance of the operator to actively market applications;
• Device fragmentation, a critical technology issue for operators to mitigate;
• Value and relevance of customer info, such as phone activity, SMS history, in network / out network, etc; and
  
• Similarities between TV and Mobile industries in the emerging app ecosystem with many insights on packaging provided by the TV industry from Ian Valentine of Miniweb.
  

In the time available we were only another to scratch the surface of the topic, we did not have a chance to cover:

• Charging for APIs (Application Program Interface);
• Charging for testing;
• Enterprise stores;
• Operator in competition with developers, as some operators plan to build their own apps/widgets;
• Store within a store concept, e.g. an Orange store in Nokia Ovi store; and
• Operator collaboration to avoid re-certification, e.g. say Telenor approves an app, why is that not good enough for other operators.

After the session the organizers came in and asked us to move onto the next sessions as the discussion was continuing long passed the end of the panel session.

In a later article I'll review some of the sessions I attended in the Conference agenda which included more than 250 speakers in over 50 breakout sessions, keynote addresses, plenary panels, and workshops.  Sessions such as 'Demystifying SaaS/ Cloud Computing: The Myths versus the Facts' with presenters from Amazon, Salesforce.com, Amdocs, BT, and IDC proved very interesting.

I recently completed a report for Mind Commerce entitled: "IMS (IP Multimedia Subsystem) Status Report: Emerging from the Trough of Disillusionment?"  This report provides a valuable independent IMS status report that can help all in the industry have a clear view on its current status and the likely paths operators will take in the evolution of their networks.  Its available from Mind Commerce.  I'd like to thank everyone who generously gave their time in helping me create this report.

Report Structure
This report provides an independent and quantified view of what is happening in the industry on IMS (IP Multimedia Subsystem), through the presentation of results from an industry-wide survey that encompasses 137 interviews, 101 of them being operators.  The report also includes operator and supplier case studies, presenting as factually as possible the current state of the art; without the hype and marketing spin that has frustrated many people on this topic.  These two objectives are reflected in the two main sections of this report: market survey results and case studies which include Verizon, China Mobile, and Vodafone Spain.

Key Findings

• IMS remains niche, with only 8% of those operators surveyed deploying IMS.  Note, none of those operators have completed the conversion of their network, all considered it a 5-7 year process.  
• Another 12% are in an extended field trial, which is characterized by services being launched on the IMS core, with in some cases paying customers; but a decision has not yet been made to commit to service migration onto the IMS core.  
• IMS does not appear to be entering a period of rapid adoption, rather a linear growth in initial adoption over the next 5 years, with by 2014 about 32% of operators commencing an IMS deployment.  
• Regionally, NAR (North America Region) provides the bulk of the growth in years 2010 and 2011, while EMEA (Europe Middle East and Africa) and APAC (Asia Pacific) regions provide the bulk of growth in later years.  
• Lack of business case, lack of standards compliance and BOSS (Business and Operational Support System) integration were the top three barriers to adoption as identified by operators.  

Target Audience

• Mobile (CDMA and GSM), fixed, broadband and cable operators: providing an independent status report to cut through the marketing hype to aid in the definition of a realistic network evolution plan.
• Network equipment providers: giving the market analysis necessary to determine where and when to make product investments, better meet operator requirements, better aid operators in their network evolution, and guidance on where to focus sales resources over the next 5 years.
• Related network component suppliers, e.g. business and operational support system software suppliers, service broker / service middleware providers, SDP providers, customer premise equipment suppliers, mobile handset and software suppliers: providing the market analysis necessary to determine where and when to make product investments and where for focus sales resources.
• Application developers: whether to invest in building IMS applications, and where to focus.
• Investors: where the investment opportunities reside in the emerging IMS landscape.

Companies interviewed for this report include: AT&T, Belgacom, Bermuda Telecom, Bharti Airtel, BSkyB, BT, Cable One, Charter, City Telecom, Cox, Deutsche Telekom, Etisalat (and operating companies), Hong Kong CSL, Indosat, KPN (and operating companies), Kuwait Telecom, Maxis, Mobilcom, O2, Optus, Orange / France Telecom (and operating companies), Qtel, Rogers, SingTel, Sprint, Swisscom, T-Com, T-Mobile (and operating companies), Telecom Italia, Telecom New Zealand, Telefonica (and operating companies), Telenor (and operating companies), Telstra, Telus, Three (and operating companies), TWC, Verizon, Vodafone (and operating companies), 4dk, Alcatel Lucent, AppTrigger, Argela, Camiant, Cisco, Comneon, Comptel, Converged Network Systems, Dialogic, Ecrio, Espial, Genband, HP, hSeind, HTK, Huawei, IBM, Intellinet, jNetx, Motorola, NeuStar, Nokia Siemens Networks, Oracle, OpenCloud, Sigma Systems, Tekelec, Telcordia, TM Forum, Veraz, Wipro.

IPTV has been a long time in coming.  Back in 1991/1992 at BT Labs I helped build one of the first VoD systems over DSL with Gavin Young's team.  Nearly 20 years later, most of the major telcos have rolled out IPTV, e.g. China Telecom, Deutsche Telekom, and AT&T.  Global IPTV customer numbers are at around 35M, and expected to grow to 90-100M by 2013.

This growth, is in the face of wholesale market consolidation.  Operators are consolidating as small operators are increasingly uneconomic, no longer less profitable.  Vendor solutions are consolidating.  Industry segments are consolidating with the convergence of cable, broadband, mobile and IPTV.  And vendors in this space are consolidating with the following being acquired over the passed few years: Orca, Myrio, Kesenna, Thales, Tanberg, Scientific Atlanta, C-Cor, nCube, plus more on the way...

Yet we're on the verge of an explosion in IPTV service innovation, mostly originating from the web, with:

• WebTV - watching all the free stuff from the web on TV.
• Interactive / targeted advertising
• Personalization
• Social TV: viewing, recommending, chat
• Search & recommendations
• App stores
• BYOB (Bring Your Own set top Box) - using the Wii, xbox, or PS3
  

Given all the consolidation in the telco IPTV space, were is the innovation going to come from?  Does the telco IPTV industry risk loosing out to the innovation engine of the web?

If you're in anyway involved in IPTV, I'd be grateful if you'd take the time to complete this IPTV Survey; if you enter your email at the end I'll send through a copy of the results.  Thanks in anticipation of your help.