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MWC 2012 in Barcelona is not focusing on new revenue

February 29, 2012 Leave a comment

MWC is supposed to show off the best innovations in the telecom industry. The telecom industry is desperately in need of a new business model to substitute falling revenues and pay for exploding data costs.

There were a lot of LTE innovations that were announced. However these will only generate new revenues for the solution providers and not for the telecom industry as a whole.

M2M was another major innovation area. However there was no announcement of any standardization whereby several large operators would push a common standard. Without this standard it will be hard for large scale M2M projects to deliver large profits. If the telecom industry wants to be seen as the leader in the M2M then they should take a leading role in its standardization.

Augmented reality is also pushing strong. However most players are over-the-top companies and not telecom solution providers or telecom operators.

Lots of new phones and tablets but this will also not generate new telecom revenues but will probably push operators into bit pipes sooner.

Cloud computing, big data, collective intelligence, gamification, etc. were under-represented. A lot of slides but few real mind-blowing products.

Operators are probably the once to blame most for this. There is no clear signal from them that they will be investing in revenue generating solutions in 2012-2013. The only thing you can hope for is revenue sharing. Why if you invest in making a stellar product would you want to go to endless RFPs and complex integration solutions if you could launch the product by yourself and become a successful over-the-top-player?

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It will only get worse…

February 27, 2012 Leave a comment

In a recent article on Gigaom, the author is saying that it’s the end of the line for telco. Several arguments are brought to the table to explain that the industry as we know it today has seen its best days. Similar to postal services and railways.

What if the article is true?

What if the complex telecom standards no longer live up to the dotcom flexibility? What if communication is so much more than calls and SMS? How can an industry that seems so alive on the Mobile World Congress be like a dinosaur just before the ice age?

Assuming the industry will only get worse. What are your options?

1) Denial – deny the end of the world is near and focus on daily business. Once the recession is over things will pick up again. Tomorrow an operator will find the solution…

2) Survival – accept the industry is going to get worse so try to focus on those things that still continue: 4G networks for sure but what else:

3) Surrender – move to the winners (Apple, Google, Amazon, etc.). However, what if they are not hiring?

4) Move on – change industry. Where? Hiring freezes are general in most industries. Where do they need SS7 specialists?

Since the list ran out of options, there is only one more thing you can do: revolution.

The current model has failed. Let’s try to focus on the next model.

What if calls and SMS are free? What if monthly mobile subscription charges are €10 max? Where will the money come from in this case?

I have some ideas. They might be good or bad. However for sure there are millions of people that will have ideas. The challenge will be how to test millions of ideas without spending billions on useless ideas.

This challenge sounds very much like the same challenge venture capitalists and business angels have. So why not use their techniques to solve the same problem?

Instead of investing in yet another useless large scale OSS or BSS transformation project, why not set-up a telecom venture capitalist business with this money? There are several companies that use a similar set-up to do product innovation. They allow the crowd to suggest ideas, rank them, complement them, etc. They set-up a team of internals and externals to build prototypes for the best ideas. They allow the crowd and social tools to make publicity and a darwin-like experience to get to a certain level of profits or get killed. External companies could even be willing to participate in some of the ventures.

The best way to motivate is to create a challenge. Every approved idea will get €250K for 6 months. Who can successfully launch a telecom product or service that makes €1M profit within 6 months after idea approval? The team that does, gets €1M investment and stock options. Next challenge €10M in 6 months.

To cater for these telco startups, operators would need to set up separate legal structures, innovation platforms and expert guidance teams. Startups should be owned partially by the operator but also by their founders. Innovation platforms should avoid re-inventing the wheel continuously. Expert guidance teams should help startups with technical, business, legal, marketing, etc. support.

The idea should not be to invent the next SMS but to invent a whole portfolio of profitable new services because the industry should no longer be built around two or three killer apps…

Enough virtualization and IaaS, let’s focus on business users now…

February 24, 2012 Leave a comment

When the first television shows were made they used one camera to record a theatre play. It was only after some time that the real potential of the television became clear.

Virtualization and IaaS is like a one-camera-theatre-play-broadcast

Yes it is great to be able to put software on virtual hardware and as such save some money in hardware costs. But it will not change anybody’s life because renting a virtual server full-time is more expensive than renting a physical hosting server. Companies that focus too much on virtualization and IaaS are not seeing the full potential of Cloud Computing.

Multi-tenancy – a game changer

Cloud Computing without mult-tenant solutions is like a race car without an engine. Making one solution that fits many and installing it once and managing it in one place is the real game changer.

How much time and money is lost in a per customer install? Ordering and installing hardware (4-6 weeks); paying for base software (OS, Cluster, Database, etc.); installing the total software stack; integration with back-up, fault management, single sign-on, performance management, third-party systems, etc.; upgrading and bug fixing; data migrations; etc.

All this can be drastically reduced if the software is installed once and designed for multiple companies and customers.

Best-In-Class Solutions

Best-In-Class solutions used to be those solutions with most features from market-leading companies like SAP, Oracle, Microsoft, etc. However most of these solutions are unnecessarily complex. There is a simple rule to check if you will be overpaying for unnecessary features: Do my business users need training? The more, the worst.

Apple has demonstrated that simplicity and easy-of-use are real demand creators. The real revolution of Cloud Computing is starting now. The real revolution is that business users can ignore the legacy corporate IT systems and use alternative solutions to get things done faster and more efficiently. The Appstore concept of “There is an app for everything”, will now be translated into “There is a SaaS for everything”.

Project managers will stop asking the IT department to install a shared project management server to synchronize their MS-Projects. Instead they will simply use a SaaS solution for project management. The same will be happening for other disciplines.

IT departments can fight this trend, just like they can try to stop people from bringing smartphones and tablets to work. However smart IT departments see a clear opportunity.  Corporate systems are very expensive and often their implementation fails. This wastes a lot of time and money. By letting business users choose the SaaS solutions they want to use, IT departments will see the risk of project failures due to change management issues almost disappear. Using SaaS solutions however does not mean that IT departments are no longer necessary. Once users are over their honeymoon period they will want these SaaS solutions to use Single Sign-on and be integrated with corporate systems and other SaaS solutions.

The next steps in the Cloud Revolution

The next step in the Cloud revolution will be solutions that make easy integration between on-site systems and between different SaaS solutions possible. Project managers will love to manage projects via a best-in-class project management SaaS. However they will still need to get time reporting info, travel expenses, resource allocation, etc. The reality will be that some of these systems can be offered via other SaaS solutions and some will be local. All of them will need to be integrated if the enterprise wants to get real benefits. History has a tendency to repeat itself. Middleware  and EAIs are not death because of the Cloud. They just will become EAIaaS.

The other Cloud revolution is likely to give business users tools to create their own applications in the Cloud. This does not mean programming tools but instead drag-and-drop wizards and dynamic data storage solutions. There are millions of business critical applications stored in Excel and Access files. It is time that business users get the proper Cloud tools to convert these into social corporate solutions. Google Apps and Force.com are ahead of the rest but they are far from being the winner yet. The war has just started…

BitTorrent Live: Cheap, real-time P2P video streaming that will overload your network

February 21, 2012 Leave a comment

P2P video streaming has finally arrived. It took a little bit longer than expected but expect users to move away from sites like Mega Upload and to move to BitTorrent Live. P2P video streaming allows people to see content in real-time without having to download the content first. Since BitTorrent Live will also be used for official and legitimate content distribution, throttling bandwidth by the operator might be seen as breach on competition laws by the European and American authorities. This will make it difficult for operators to control the flow of data in their fixed and mobile networks.

In a recent article, solutions for both Hollywood and operators were discussed so please have a look there…

2014 RIP Ericsson Nokia Siemens Alcatel Lucent Networks

February 20, 2012 3 comments

Today Friday 13th August 2014, the conglomerate Ericsson Nokia Siemens Alcatel Lucent Networks has filed for bankruptcy protection.

How can it be that only 2,5 years ago the conglomerate consisted of three companies that were employing tens of thousands employees each? Bad management was not the reason for the downfall. Each company was professionally managed and was trying to provide solutions its customers asked for. Their major business was delivering LTE (5G) networks to telecom customers all over the world.

The downfall initiated at the end of 2012 when their customers started to massively launch LTE networks. Subscribers in 2013 noticed that with the new LTE network calls and SMS could be substituted by free VoIP and instant messaging. All of a sudden telecom revenues started plummeting. To make things worse HD digital content distribution moved from broadcasting to streaming, putting heavy loads on the new networks and the associated costs onto network operators. By switching off digital broadcasting, spectrum all of a sudden became less expensive, triggering major accounting adjustments.  Several operators went into panic mode and started large-scale consolidations and cost cuts. This triggered a consolidation between the three major telecom solution providers.

Operators never requested their solution providers to help them build new revenue generating solutions until it was too late. Operators were asking for faster, easier to manage and cheaper networks instead. As a clear example of the Innovator’s Dilemma, telecom solution providers focused on what customers requested, not on what customers really needed.

For the telecom industry IP communications, Cloud Computing, Smart Phones, Tablets,  Content Streaming, Social Networks were all disruptive innovations that changed the status quo completely and faster than anybody in the industry expected. Consumers changed their behaviour faster than telecom providers anticipated. Dotcoms, then also called over-the-top-players, were a lot more agile than operators and telecom solution providers.

After the introduction of LTE, also the complexity of the telecom industry changed. For the first time networks no longer had services entangled in obscure protocols. Standardized web technology could be used which massively invited IT players to enter into areas that used to be the exclusive playing field of telecom solution providers. Ericsson Nokia Siemens Alcatel Lucent Networks had a company structure build around complex proprietary-standards and solutions. When these could be substituted by off-the-shelf standard-based solutions, services daily prices got divided by four. This rendered the existing players uncompetitive virtually overnight.

February 2012: This post is fictional but unless telecom solution providers start asking their customers how they will generate new revenues with LTE, nothing will stop it from happening…

Plug-and-play OSS

February 17, 2012 Leave a comment

Every system that is deployement within an operator:

  • Needs to generate alarms for fault management.
  • Generates performance management data for software usage, KPI and SLA management.
  • Can have interfaces for remote configuration.
  • Can be integrated with a central inventory management for simplified asset tracking and audit tracking.
  • Generates logs that can be used for auditing.
  • Can have an external security system that controls access.
  • Can have an external software management system that manages the life-cycle of the software updates.
  • Can have a data export for data analytics.
  • etc.

No wonder OSS architectures are complex if in addition to the main functionality all the above need to be managed for every system. Reality is that each system (fault management, performance management, configuration management, inventory management, etc.) has its own standards and expects others to come and integrate with the system.

Can’t this be done simpler?

What if OSS would offer a plug-and-play mechanism? Each new system that is installed would broadcast its availability. Plug-and-play interfaces would be standardized for FM, PM, CM, IM, etc. A plug-and-play interface is a mechanism by which when you add the software, your architecture gets notified of the new system and automatic negotiations happen:

  • with the fault management system about what type of traps will be launched and what type of actions need to be taken. Via a Cloud solution, software companies could register once the traps that are launched and the fault management system could “automagically” start monitoring the new system.
  • the same is true for the other systems. Performance data configurations are proactively shared with the performance management data. The inventory system receives information about what is happening in the software. The data analytics system receives information about the new system.
  • Deployment of the new system should already have happened via a common software management system that also manages updates, high-availability and rollbacks.

Sure there are no standards for this type of semi-intelligence in OSS. However standards in the Web 2.0 era are made by the first dotcom that comes up with a simple system that just does the job.

Software providers would build plug-and-play in their software, hence deployment of a new solution would no longer be traumatic in the OSS area. The idea would be to have a mechanism like a hardware USB plug-and-play. You plug-in a new solution and automatically it configures itself within your architecture…

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