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OpenRate – Charge like Vodafone, American Airlines, Amazon AWS or Salesforce for free…

July 23, 2012 4 comments

Ever wondered how it is that two people make a similar call, fly next to one another on a plane, rent the same type of virtual server or use the same SaaS application but end up paying totally different bills. Big companies have understood since a long time that rating and charging is the key to making more money for the same service. As long as the user can be convinced that they are paying more because of some valid reason (e.g. prepaid contract, same-day return flight, on-demand vs reserved instance, monthly vs yearly subscription, etc.), a similar service can be sold at different prices.

For a long time it was expensive to do advanced rating and charging. Licensing could easily be millions. That day has changed. After a very productive discussion, OpenRate has decided to offer again a free GPL version of their open source rating and mediation solution.

Why is an open source rating and mediation solution so important?

Online charging, rating and mediation used to be something that only the most diehard telecom experts could really grasp. There was no need for it outside of the telecom and some other major industries.

However P2P, Mobile Apps, Cloud Computing, M2M, Social Networks, Online Games, Big Data, etc. have brought us VoIP for P2P, In-App Micro Payments & Subscriptions, mCommerce, IaaS, SaaS, PaaS, sensor network event subscription, social commerce, fire hose subscriptions, virtual goods purchases, data set per-event access fees, etc. All of these technologies are exploring new ways of generating money. Unfortunately none is able to afford a €1-€5/license per user per month for a professional solution. At least not from day one. With OpenRate developers, marketers, product managers, etc. are able to explore new frontiers in monetization without any upfront risk. Subscriptions, one-time-fees, pre-paid, real-time charging, discounts, etc. it is all possible now. OpenRate is a very flexible framework in which developers can use what they need.

So if you are incubating a SaaS offering that wants to push the limits of prepaid and subscriptions, an online game with a catalogue of virtual goods, a social network with a cashflow problem, an M2M platform in need of money, an IaaS seller with a large set of configurable parameters, etc. you should be looking at how rating and charging can make you more money…

Of course if you are new to the rating and charging market and want training, consultancy or need a support contract, be sure to check out the OpenRate Commercial Offering. OpenRate is a freemium company that wants to understand your specific needs in order to offer the best possible solutions, so get in contact with them on the OpenRate Linkedin Community Site.

It would be good to see OpenRate be integrated with other Open Source and Freemium solutions, e.g. open source commerce solutions, like OpenCart, could use an advanced SaaS subscriptions and discount management extension, etc. This is an open invitation for developers to let their imagination flow and share it with the rest of us…

10 ways telecom can make money in the future a.k.a. telecom revenue 2.0

LTE roll-outs are taking place in America and Europe. Over-the-top-players are likely to start offering large-scale and free HD mobile VoIP over the next 6-18 months. Steeply declining ARPU will be the result. The telecom industry needs new revenue: telecom revenue 2.0. How can they do it?

1. Become a Telecom Venture Capitalist

Buying the number 2 o 3 player in a new market or creating a copy-cat solution has not worked. Think about Terra/Lycos/Vivendi portals, Keteque, etc. So the better option is to make sure innovative startups get partly funded by telecom operators. This assures that operators will be able to launch innovative solutions in the future. Just being a VC will not be enough. Also investment in quickly launching the new startup services and incorporating them into the existing product catalog are necessary.

2. SaaSification & Monetization

SaaS monetization is not reselling SaaS and keeping a 30-50% revenue share. SaaS monetization means offering others the development/hosting tools, sales channels, support facilities, etc. to quickly launch new SaaS solutions that are targeted at new niche or long tail segments. SaaSification means that existing license-based on-site applications can be quickly converted into subscription-based SaaS offerings. The operator is a SaaS enabler and brings together SaaS creators with SaaS customers.

3. Enterprise Mobilization, BPaaS and BYOD

There are millions of small, medium and large enterprises that have employees which bring smartphones and tablets to work [a.k.a. BYOD – bring-your-own-device]. Managing these solutions (security, provisioning, etc.) as well as mobilizing applications and internal processes [a.k.a. BPaaS – business processes as a service] will be a big opportunity. Corporate mobile app and mobile SaaS stores will be an important starting point. Solutions to quickly mobilize existing solutions, ideally without programming should come next.

4. M2M Monetization Solutions

At the moment M2M is not having big industry standards yet. Operators are ideally positioned to bring standards to quickly connect millions of devices and sensors to value added services. Most of these solutions will not be SIM-based so a pure-SIM strategy is likely to fail. Operators should think about enabling others to take advantage of the M2M revolution instead of building services themselves. Be the restaurant, tool shop and clothing store and not the gold digger during a gold rush.

5. Big Data and Data Intelligence as a Service

Operators are used to manage peta-bytes of data. However converting this data into information and knowledge is the next step towards monetizing data. At the moment big data solutions focus on storing, manipulating and reporting large volume of data. However the Big Data revolution is only just starting. We need big data apps, big data app stores, “big datafication” tools, etc.

6. All-you-can-eat HD Video-on-Demand

Global content distribution can be better done with the help of operators then without. Exporting Netflix-like business models to Europe, Asia, Africa, Latin-America, etc. is urgently necessary if Hollywood wants to avoid the next generation believing “content = free”. All-you-can-eat movies, series and music for €15/month is what should be aimed for.

7. NFC, micro-subscriptions, nano-payments, anonymous digital cash, etc.

Payment solutions are hot. Look at Paypal, Square, Dwolla, etc. Operators could play it nice and ask Visa, Mastercard, etc. how they can assist. However going a more disruptive route and helping Square and Dwolla serve a global marketplace are probably more lucrative. Except for NFC solutions also micro-subscriptions (e.g. €0.05/month) or nano-payments (e.g. €0.001/transaction) should be looked at.

Don’t forget that people will still want to buy things in a digital world which they do not want others to know about or from people or companies they do not trust. Anonymous digital cash solutions are needed when physical cash is no longer available. Unless of course you expect people to buy books about getting a divorce with the family’s credit card…

8. Build your own VAS for consumers and enterprises – iVAS.

Conference calls, PBX, etc. were the most advanced communication solutions offered by operators until recently. However creating visual drag-and-drop environments in which non-technical users can combine telecom and web assets to create new value-added-services can result in a new generation of VAS: iVAS. The VAS in which personal solutions are resolved by the people who suffer them. Especially in emerging countries where wide-spread smartphones and LTE are still some years off, iVAS can still have some good 3-5 years ahead. Examples would be personalized numbering schemas for my family & friends, distorting voices when I call somebody, etc. Let consumers and small enterprises be the creators by offering them visual  do-it-yourself tools. Combine solutions like Invox, OpenVBX, Google’s App Inventor, etc.

9. Software-defined networking solutions & Network as a Service

Networks are changing from hardware to software. This means network virtualization, outsourcing of network solutions (e.g. virtualized firewalls), etc. Operators are in a good position to offer a new generation of complex network solutions that can be very easily managed via a browser. Enterprises could substitute expensive on-site hardware for cheap monthly subscriptions of virtualized network solutions.

10. Long-Tail Solutions

Operators could be offering a large catalog of long-tail solutions that are targeted at specific industries or problem domains. Thousands of companies are building multi-device solutions. Mobile &  SmartTV virtualization and automated testing solutions would be of interest to them. Low-latency solutions could be of interest to the financial sector, e.g. automated trading. Call center and customer support services on-demand and via a subscription model. Many possible services in the collective intelligence, crowd-sourcing, gamification, computer vision, natural language processing, etc. domains.

Basically operators should create new departments that are financially and structurally independent from the main business and that look at new disruptive technologies/business ideas and how either directly or via partners new revenue can be generated with them.

What not to do?

Waste any more time. Do not focus on small or late-to-market solutions, e.g. reselling Microsoft 365, RCS like Joyn, etc. Focus on industry-changers, disruptive innovations, etc.

Yes LTE roll-out is important but without any solutions for telecom revenue 2.0, LTE will just kill ARPU. So action is required now. Action needs to be quick [forget about RFQs], agile [forget about standards – the iPhone / AppStore is a proprietary solution], well subsidized [no supplier will invest big R&D budgets to get a 15% revenue share] and independent [of red tape and corporate control so risk taking is rewarded, unless of course you predicted 5 years ago that Facebook and Angry Bird would be changing industries]…

What is your next move? Moving free to telecom or paid to the mobile Internet?

December 12, 2010 2 comments

At the moment teenagers are accustomed to paying for SMS (bulk tariffs) and voice calls (if they use them at all). However since mom and dad pay, they are just worried about staying below their parents ‘ anger limit.

Everything else in the digital world is free to them. Either legally free from the likes of Facebook or Twitter or illegally free from the likes of eMule.

We are at the doorstep of most teenagers switching from SMS enabled phones to smartphones and tablets. This means that there are two possibilities: telecom becomes free or mobile Internet becomes paid.

My guess: telecom becomes free. SMS will be substituted by Twitter and Instant Messaging. A 100-300MB of data traffic can easily pay for thousands of instant messages and social network updates. Likely free mobile apps that optimize data exchanges will be very popular with teens. The net effect will be that teens will no longer see the relationship between sending a message and paying for it. This will prompt them to move massively to the free mobile Internet.

However is there a way to move paid to the mobile Internet?

Not at the current prices. History would repeat itself like in the music industry. A digital technology comes but Hollywood tries to maintain an artificial high price even if distribution prices fall close to zero. CDs cost cents. Digital distribution even less. However you still find CDs that cost more than €15-€25. The result is that teenagers find ways not to pay.

How to do it differently? Move from micropayments (5-15 cents/SMS) to nanopayments (0.01 or 1 cents/event), micro-subscriptions (5-15 cents/month) or freemium. If mobile app designers could have access to a simple interface to charge nanopayments on your phone bill in a uniform matter, then they would not give you an article for free but they would want you to pay 0.05 eurocents for it. You wouldn’t mind such a small fee but lots of nano-cents convert to real money for a successful site. Also micro-subscriptions would allow teenagers to subscribe to a premium service without having any parents worried about phone bills. The last business model (freemium) has been described in another article.

Failure to teach today’s teenagers to pay for the Mobile Internet will mean that free will be tomorrow’s only Digital business model. This is not necessarily bad for site owners that can find ways around it via advertisement or selling customer’s data. However telecom operators will see their only income come from monthly subscription fees that will only go downwards…

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